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Question 11 (25 marks)

Jamaica Productions Ltd has an authorized share capital of 18,000,000 $1 ordinary shares of which 12,000,000 have been issued as fully paid. The following information was extracted from the companys records for the financial year ended December 31, 2016:

Details/Accounts	$	$
Discounts allowed		30,000
General administrative expenses		108,000
Auditors fees		30,000
Directors remuneration		240,000
Returns outward		300,000
Returns inward		216,000
Purchases		5,160,000
Motor vehicle operating expenses		132,000
Wages and salaries: Administration	240,000
Distribution	480,000	720,000
Stock, January 1, 2016		960,000
Sales		9,000,000
Carriage inwards		162,000
Premises at cost		3,000,000
Retained earnings January 1, 2016		3,120,000

Notes:

(i) Stock on December 31, 2016 was counted and valued at $1,080,000.

(ii) Expenses paid in advance: motor vehicle operating expenses $36,000.

(iii) Amounts owing as at December 31, 2016 were: General administrative expenses $13,200; and salaries and wages (administrative staff) $36,000.

(iv) The company depreciated premises at 5% per annum straight line method. Total depreciation to December 31, 2016 was $480,000.

(v) On January 1, 2016 the companys assets included, motor vehicles at cost $480,552; Total depreciation to date $192,000. Depreciation is provided at 20% per annum reducing balance method. The above figures include a motor vehicle which costs $96,000 and had been in company ownership for exactly three years. It was sold for $30,000 on January 1, 2016.

(vi) The motor vehicles are used by staff as follows: Administrative staff 120,000 miles per annum; Distribution staff 360,000 per annum.

(vii) The liability for corporation tax for the financial year ended December 31, 2016 amounted to $760,000.

(viii) The ordinary share dividends for the year were: Interim 5% already paid; Final 6% proposed.

(ix) The Directors decided to transfer $400,000 to General Reserves.

Required:

(a) The Trading and Profit and Loss Account for the year ended December 31, 2016. (12 marks)

(b) The Appropriation Account for the year ended December 31, 2016. (7 marks)

(c) List the items which the company would be required to include in its published accounts under the Companies Act. (6 marks)