The following information is relevant:

1. A revaluation of the land on 31 December 2014 by Lara Ltd, an estate agent, resulted in an increase of 600,000. The directors have decided to reflect this valuation in the accounts for the year to 31 December 2014.

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2. The company policy is to depreciate its fixed assets using the straight line method at the following annual rates:

Delivery trucks	20 %
Furniture	10 %
Buildings	2%

The company computes depreciation based on the number of months the asset has been held for during the accounting period.

Changes in ownership of the companys depreciable assets are as follows:

1. Delivery trucks, which were acquired on 30 April 2012 for 200,000 were sold for 70,000 on 30 June 2014. NBV of disposed truck was 113.33. The proceeds from this sale have been credited to a disposal account, but no other entries have been made with regard to this transaction. The company did not acquire any new trucks during the year to 31 December 2014.

2. 100,000 of furniture is fully depreciated on 31 December 2014 and has been disposed of with no proceeds on disposal. The company did not acquire any new furniture during the year to 31 December 2014.

3. The company purchased a new building on 1 March 2014 for 300,000.Cash is paid from a separate bank account and no entries have been made in the companys records with respect to the cash paid or the building purchased.

3. The company has been investing in a project to develop supply chain processes for supply and inventory control. Until 31 December 2013, the company has been capitalising development costs as per the limits allowed by accounting standards. Because the supply chain project no longer meets the capitalisation criteria in the year to 31 December 2014, the company decided to write off all development costs.

4. The cost of inventory on 31 December 2014 was 2,000,000. Included in this amount are some manual coffee makers, costing 300,000, that have been less popular. It has been decided to sell these coffee makers at 60% of their cost.

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5. One of the companys customers, owing 20,000, was declared bankrupt during the year. The company didnt plan to take further actions to collect its debt and has decided to write it off and maintain the provision for doubtful debts at 5% of the remaining trade receivables.

6. The company pays quarterly insurance premiums in advance to HJ insurance company. The last quarterly payment of 210,000 was paid on 1 December 2014.

7. The debenture loan bears a 10% annual interest. Three-months interest was due on 31 December 2014. The same amount was due on 31 December 2013.

8. An interim dividend of 15p per share was paid on 1 July 2014.

9. The company issued 200,000 additional ordinary shares on 15 October 2014. Shares were issued at a premium of 40p per share. The proceeds were paid into a separate bank account and no entries have been made in the companys accounting records with respect to the receipt of cash or issuance of shares.

Required:

1. Prepare the income statement of Dardania Plc for the year ended 31 December 2014 and the statement of financial position at that date in a form suitable for presentation to the directors of the company. (14 marks for IS and 11 for BS)

Dardania plc, a distributor of imported kitchen appliances, has prepared its draft trial balance to 31 December 2014, which is shown below: Trial Balance at 31 December 2014 000 000 2,180 1,200 720 450 225 3,700 962 123 1,800 990 90 70 550 Land at valuation Delivery trucks Accumulated depreciation- Delivery trucks at 1 January 2014 Furniture Accumulated depreciation- Furniture at 1 January 2014 Buildings Accumulated depreciation- Buildings at 1 January 2014 Development costs at 1 January 2014 Inventory at 1 January 2014 Trade receivables Provision for doubtful debts at 1 January 2014 Prepaid insurance at 1 January 2014 Bank balance Trade and other payables Accrued interest at 1 January 2014 10% Debenture 2017 Share capital (1 ordinary shares) Share premium Revaluation reserve Retained earnings at 1 January 2014 Sales Purchases Wages and salaries Distribution costs Insurance expense Interest paid Disposal Interim dividend paid 430 20 800 1,700 883 448 1,300 9,570 4,210 810 320 460 100 70 255 17,218 17,218 The following information is relevant: (1) A revaluation of the land on 31 December 2014 by Lara Ltd, an estate agent, resulted in an increase of 600,000. The directors have decided to reflect this valuation in the accounts for the year to 31 December 2014. Dardania plc, a distributor of imported kitchen appliances, has prepared its draft trial balance to 31 December 2014, which is shown below: Trial Balance at 31 December 2014 000 000 2,180 1,200 720 450 225 3,700 962 123 1,800 990 90 70 550 Land at valuation Delivery trucks Accumulated depreciation- Delivery trucks at 1 January 2014 Furniture Accumulated depreciation- Furniture at 1 January 2014 Buildings Accumulated depreciation- Buildings at 1 January 2014 Development costs at 1 January 2014 Inventory at 1 January 2014 Trade receivables Provision for doubtful debts at 1 January 2014 Prepaid insurance at 1 January 2014 Bank balance Trade and other payables Accrued interest at 1 January 2014 10% Debenture 2017 Share capital (1 ordinary shares) Share premium Revaluation reserve Retained earnings at 1 January 2014 Sales Purchases Wages and salaries Distribution costs Insurance expense Interest paid Disposal Interim dividend paid 430 20 800 1,700 883 448 1,300 9,570 4,210 810 320 460 100 70 255 17,218 17,218 The following information is relevant: (1) A revaluation of the land on 31 December 2014 by Lara Ltd, an estate agent, resulted in an increase of 600,000. The directors have decided to reflect this valuation in the accounts for the year to 31 December 2014