trial balance
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Free InquiryBright Light Plc has the following trial balance as at 31 December 2015:
Bright Light Plc |
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Trial Balance as at 31 December 2015 |
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£ |
Debit |
Credit |
Sales |
550,000 |
|
Cost of Goods Sold |
250,000 |
|
Loans |
180,000 |
|
Preference share capital (£170,000 authorised) |
120,000 |
|
£1 Ordinary share capital (£700,000 authorised) |
600,000 |
|
Share premium account |
100,000 |
|
Non-current assets |
957,100 |
|
General expenses |
92,600 |
|
Other operating expenses |
15,900 |
|
Trade receivables |
44,600 |
|
Cash |
28,300 |
|
Trade payables |
6,500 |
|
Retained Earnings as at 1 January 2015 |
18,000 |
|
General Reserve as at 1 January 2015 |
12,000 |
|
Inventories as at 31 December 2015 |
198,000 |
|
1,586,500 |
1,586,500 |
The following additional information is given to prepare the adjustments:
Notes |
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1. A dividend is proposed of 12% on ordinary shares |
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2. A dividend of 7% for preference shares is proposed |
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3. A transfer of £4,800 to the general reserve needs to be recorded |
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4. There is no provision for audit fee yet, which will be £12,800 |
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5. The interest for the year is 8%, which has not been paid and needs to be recorded |
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6. Corporation tax of £31,260 is to be provided on the profit of the year |
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7. An additional £8,000 is owing for general expenses |
Required:
a. Prepare the Income Statement (Statement of Profit & Loss) for Bright Light Plc for the year ended 31 December 2015
b. Prepare the Statement of Financial Position (Balance Sheet) as at that date.
c. Explain the relationship between the Income Statement, the Statement of Financial Position and the Statement of Cash Flows.
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