Question 1 The following information is the preliminary trial balance of Kingsla Motors PLC for year ending of 31" of December 2020: Debits (1) Credits (L) Sales 150,000,000 Property 45,000,000 Goodwill 15,000,000 Intangible Assets (e.g. Patents, Trademarks)) 25,000,000 Advertising 6,000,000 Purchases 60,000,000 Land 15,000,000 Pre-paid Advertising 2,000,000 Cash and Cash Equivalents 25,000,000 Inventories (at the 1st of January 2020) 32,000,000 Accrued Bank Interest 100,000 Staff Wages 20,000,000 Management Salaries 4,000,000 Trade Receivable 5,000,000 Fixture and Fittings - Historic Cost 28,000,000 Fixture and Fittings - Accumulated Depreciation 14,000,000 Pension Liability 10,000,000 Tools and Equipment - Historic Cost 120,000,000 Tools and Equipment. Accumulated Depreciation 80,000,000 Share Capital (100) 50,000,000 Rent Received (additional warehouse space) 2,000,000 Bank Interest Expense 10,000,000 Retained Earnings 58,000,000 General and Administrative Expenses 9,000,000 Share Premium 20,000,000 Trade Payables 4,900,000 Assembly Line Machine - Historic Cost 100,000,000 Assembly Line Machine - Accumulated Depreciation 67,000,000 Asset Revaluation 5,000,000 Bank Loan 60,000,000 521,000,000 521,000,000 4QQMN501 Adjustments 1) Closing inventories was 20,000,000 on the 31st of December 2020. 2) Corporation tax is 19% for the year, half due now in cash and half due in April 2021 3) Property was revalued from 45,000,000 to 50,000,000. 4) A court case of a present obligation is being settled (within a year) and therefore regarded as being probable, with Kingsla Motors PLC needing to pay a competitor for copyright infringements at a reliably estimated amount of 35,000,000. 5) Depreciation (all based on reducing balance): a) Tools and Equipment - 15% 6) Amortisation/Impairment: a) 4,000,000 of inventories need to be written off as they've been deemed obsolete (not yet included in stock figure) 7) 4,000,000 of intangibles assets were purchased using cash. 8) Dividends were distributed to shareholders during the financial year to a value of 5,000,000 in cash. 9) A1 for 2 bonus issue was given to shareholders. The bonus issue was conducted before the rights issue. 10) A rights issue of 5 for 2 basis, at 300 per share, with 75% of shares bought by shareholders. REQUIRED Please prepare a balance sheet and income statement for 31st December 2020 using the trial balance presented on the previous page, ensuring that you make all the requested adjustments. Total marks for Question 1 (40 marks) See Next Page