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Sparky plc The following balances have been extracted from the books of Sparky plc at 30 September 2015 Em 890 250 115 280 790 130 37 38 1,320 2,690 620 915 4,100 210 3,634 845 11,780 1,300 240 1,410 1,300 Administrative expenses Bank Deferred taxation Directors' remuneration Distribution expenses Dividends paid Dividends received Interest paid Investments Machinery-cost Machinery Opening inventories Premises-cos Premises-accumulated Depreciation Purchases Retained earnings Revenue Share capital 25p ordinary shares Trade payables Trade receivables 6% Debenture 2018 You are also provided with the following information: - accumulated depreciation 678 m. 1. Closing inventories were estimated at 2. Dividends paid are in respect of the year ended 30 September 2014 3. Depreciation is to be charged on the following bases: Premises Machinery: 2% 25% straight line reducing balance 4. Corporation tax is estimated as 980 m for the year (a) Prepare Sparky plc's income statement for the year ended 31 March 2015 and its statement of financial position as at that date. These should be in a suitable form for publication insofar as this is possible from the above information. 14 marks (b) Using relevant ratios, comment on the solvency of Sparky plc. (c) The directors of Sparky plc are considering revaluing the premises. Explain the advantages of revaluing non-current assets. 3 marks Sparky plc The following balances have been extracted from the books of Sparky plc at 30 September 2015 Em 890 250 115 280 790 130 37 38 1,320 2,690 620 915 4,100 210 3,634 845 11,780 1,300 240 1,410 1,300 Administrative expenses Bank Deferred taxation Directors' remuneration Distribution expenses Dividends paid Dividends received Interest paid Investments Machinery-cost Machinery Opening inventories Premises-cos Premises-accumulated Depreciation Purchases Retained earnings Revenue Share capital 25p ordinary shares Trade payables Trade receivables 6% Debenture 2018 You are also provided with the following information: - accumulated depreciation 678 m. 1. Closing inventories were estimated at 2. Dividends paid are in respect of the year ended 30 September 2014 3. Depreciation is to be charged on the following bases: Premises Machinery: 2% 25% straight line reducing balance 4. Corporation tax is estimated as 980 m for the year (a) Prepare Sparky plc's income statement for the year ended 31 March 2015 and its statement of financial position as at that date. These should be in a suitable form for publication insofar as this is possible from the above information. 14 marks (b) Using relevant ratios, comment on the solvency of Sparky plc. (c) The directors of Sparky plc are considering revaluing the premises. Explain the advantages of revaluing non-current assets. 3 marks