QUESTION 2 The following is the Trial Balance of Lauterbrunnen Plc as at 31 March 2021. 000 000 500 200 10 25 40 30 5 3 6 4 20 21 5 20 60 Sales Purchases Return inwards Inventory at 1 April 2020 Distribution expenses Administration expenses Bad debts Discount received Debenture interest Preference dividend paid Preliminary expenses Trade payable VAT Bank Trade receivable Allowance for Doubtful Debts at 1 April 2020 80,000 10% Preference Shares of 1 each 100,000 Ordinary Shares of 1 each 12% Debentures General Reserve Share Premium Retained profit at 1 April 2020 Investment Fixtures (at cost) Vehicles (at cost) Premises (at cost) Accumulated depreciation at 1 April 2020 Fixtures Vehicles 2 80 500 50 2 25 2 50 100 300 400 20 60 1,270 1,270 CONFIDENTIAL K17TF Notes on 31 March 2021: Inventory at 31 March 2021 is 18,000. (1) (2) A dividend of 10% is due from the investments. (3) (4) (5) Administration expenses prepaid is 4,000. Distribution expenses accrued is 7,000. Provide for depreciation for the year as follows: Vehicles: 20% on the reduced balance Fixtures: 15% of cost (6) (7) (8) (9) The allowance for doubtful debts at 31 March 2021 is to be adjusted to 10% of trade receivable. Provide for Corporation Tax is at 25% of net profit. Transfer 30,000 to the General Reserve Write off the Preliminary Expenses by transfer from the Share Premium Account. Premises were professionally revalued at 450,000 with the surplus on revaluation being transferred directly to a Reserve Account. (10) REQUIRED: (a) A statement of profit or loss for the year ended 31 March 2021. [11] (b) A statement of financial position as at 31 March 2021. [12] (c) Explain how a proposed final dividend should be treated in the accounts. [2] (25 marks)