Question One

The following trial balance relates to Succeed Limited as at 30 June 2020

	K	K
88,000 K1 ordinary shares issued		88,000
44,000 8% K1 preference shares		44,000
Share premium account		11,000
Revaluation reserve - PPE		33,000
Sales		220,000
Purchases	135,300
Opening inventory	87,279
Trade receivables and prepayments	29,920
Trade payables and accruals		15,094
Bank balance	4,726
10% Loan stock		17,600
General reserve		30,800
Bad debts	374
Wages and salaries	31,020
Installment tax paid	3,850
Insurance	1,551
Dividend paid - Preference	3,520
Dividend paid - Ordinary	2,420
Postage and telephone	682
Light and heat	1,338
Loan stock interest ( year to 31 December 2019)	880
Directors fees	2,750
General expenses	3,419
Vehicles (cost K21,340)	7,480
Office furniture and equipment (cost K49,104)	30,184
Land and buildings at valuation	145,420
Retained earnings at 1 July 2019		32,618
	492,111	492,111

The following information is also available:

1. Closing Inventory was given as K92, 237

2. The land and buildings are to be revalued at K165,000

3. Office furniture and equipment is to be depreciated at 15% on cost, and vehicles at 20% on cost

4. A bill for K348 in respect of electricity consumed up to 30 June 2020 has not been entered in the ledger,

5. The amount for insurance includes a premium of K330 paid in December 2019 to cover the company against fire loss for the year 31 December 2019 to 31 December 2020.

6. Provisions are to be made for:

Directors fees K5,500

Audit fees K1,320

7. The total tax expense for the year is estimated at K8,250.

8.K13, 200 should be transferred to the general reserve.

Required

Prepare a statement of profit or loss for the year ended 30 June 2020 and a statement of financial position as at the same date