income statement

Trial Balance for the year ending 31 December 2015

£

Land and Buildings

95,000

Trade receivables

75,000

Purchases of inventory

150,000

Retained Earnings at 31 December 2014

130,000

Inventories at 31 December 2014

15,000

Furniture and fixtures

30,000

Sales revenue

266,000

Distribution cost

40,000

Administrative expenses

50,000

Trade payable

54,000

Motor vehicles (net book value)

40,000

Cash and Bank

55,000

Equity share capital

80,000

Loan

20,000

Total

1,100,000

Notes:

1. Inventories at 31 December were £25,000

2. Dividend proposed for 2015 was £7,000 and not yet paid

3. An accrual for distribution cost of £3,000 was required at 31 December 2015

4. A prepayment of £5,000 was wrongfully booked on administrative expenses

5. Tax was estimated at £19,000 to be payable on the profit of 2015

6. Annual depreciation charges on land & Buildings and Motor Vehicles are included in the administrative

expenses and distribution costs, and in the accumulated depreciation used to calculate the net book values of £95,000 and £40,000 respectively, shown in the trial balance.

7. The furniture and fixtures balance of £30,000 relates to the purchases of assets during 2015. The depreciation cost are not included in the trial balance yet. They are require to be calculated on a straight line basis for the full year of 2015, based on a useful life of eight years and an estimated residual value of £6,000

8. Interest is 10% on the loan and not paid yet