QUESTION 1 The following balances were obtained from the books of Endo Corp. as at December 31, 2023: $ $ Goodwill 200,000 Premises 400,000 10% Debenture (2028) 160,000 Retained Earnings 55,500 Receivables 170,000 Payables 55,000 General Reserve 80,000 Management expenses 65,000 Ordinary share capital @ $0.50 300,000 10% Preference shares @ $1 150,000 Motor vehicles 160,000 Provision for depreciation on vehicle 20,000 10% Secured Loan (repayable Dec 2025) 100,000 Sales 1,650,000 Cost of sales 1,150,000 Fixtures & Fittings 80,000 Provision for depreciation on F&F 20,000 Stock at Dec 31, 2023 145,100 Loan interest paid 4,000 Insurance 12,000 Directors' fees 40,000 Debenture Interest 14,000 Interim Ord. Dividends 5,000 Cash & Bank 90,600 Wages & salaries 125,000 Additional Information: 2,625,600 2,625,600 i. Provide for depreciation as follows: Fixtures and fittings 10% straight line, motor vehicles 10% reducing balance. Depreciation charges should be apportioned equally between administrative expenses and selling and distribution costs. ii. The insurance paid covers the period April 1, 2023 to March 31, 2024. iii. One employee was owed 20,000 and another employee was overpaid 5,000. iv. The preference share dividends are to be accounted for in full. v. The following appropriation of the expenses must be made: Admin Wages & salaries 75% Insurance 1/3 Management fees 60% Directors' fees 100% Selling & Dist 25% 2/3 40% vi. It is estimated that goodwill is impaired by 20% vii. Corporation tax is estimated at 25% of profit before tax. viii. Transfer 15,000 to general reserves. ix. During the year, the firm issued 200,000 ordinary shares at 70c each (par value is 50c per share).