TRIAL BALANCE AS AT 31/12/2018 Revenue 1,864,200 Inventory as at 1st January 2018 108,800 Production costs 725,250 Purchases 393,000 Wages & salaries 375,000 Rent 35,250 Heat & light 26,400 Administration costs 62,850 Selling & distribution costs 58,050 Debenture interest 5,250 Ordinary share capital 150,000 Share premium 22,500 10% Debentures (repayable 2019) 105,000 Discount received 26,850 Trade receivables 506,100 Trade payables 443,550 Allowance for doubtful debts at 1st January 2018. 18,000 Bank & cash 102,180 Premises (Land and Buildings) 280,000 Motor vehicles at cost 48,000 Accumulated depreciation at Ist January 2018: Buildings 78,750 Van 17,280 2,726,130 2,726,130 ADDITIONAL INFORMATION Closing inventory at 31st December 2018 is valued at cost of 131,000. (a) The land component of premises is worth 110,000. Depreciation on buildings is charged at 4% straight-line and should be charged to administration cost.. (b) Depreciation on vans is charged at 20% on a reducing balance basis and should be charged to distribution cost. (c) AML believes that balances owed by three customers, totalling 41,100, should be considered a bad debt. AML estimates a further 4% of the outstanding balances may not be recovered. Movements in allowance for doubtful debts are treated as selling costs. (d) Wages and salaries can be allocated as follows across the following areas: - Production staff 60% - Administrative staff 20% - Selling & distribution staff 20% (e) Both rent' and 'heat & light' can be allocated as follows, based on floor area: - Production 75% - Administration 25% (f) Corporation tax for the year ended 31/12/2018 is estimated to be 19,500. Requirement (i) Show all workings required (15 Marks) (ii) Prepare a statement of profit or loss account for AM L for the year ended 31/12/2018 in a format suitable for publication (11 Marks) (iii) Prepare a statement of financial position (balance sheet) for AML as at 31/12/2018 in a format suitable for publication (14 Marks)