Reference no: EM131796891
The following trial balance was taken from the books of Rainbow plc as at 31 December 2011:
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£m
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£m
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Retained profit at 1 January 2011
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30
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Sales
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1,200
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Purchases
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500
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Inventories at 1 January 2011
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400
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Rent and rates
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90
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Salaries and wages
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80
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Other expenses
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50
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Freehold land at cost
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900
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Plant and machinery at cost
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350
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Motor vehicles at cost
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90
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Accumulated depreciation:
Plant and machinery
Motor vehicles
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140
50
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Trade receivables
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120
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Other receivables
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80
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Cash
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150
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Trade payables
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50
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Other payables
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30
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10% Debentures
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500
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Debenture interest paid
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25
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Ordinary share capital of £1 each
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700
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Share premium
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140
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Interim dividends paid
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5
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2,840
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2,840
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The following additional information became available to you:
1. Inventories as at 31 December 2011 are valued at £300m.
2. Annual rent and rates is £120m.
3. Salaries and wages include £15m advance payments.
4. The annual depreciation on plant and machinery, and motor vehicles has not been charged. The company depreciates plant and machinery at 20% using the straight-line method and motor vehicles at 25% using the reducing-balance method.
5. A trade debtor owing £20m to the company has been declared bankrupt.
6. A provision of doubtful debts has to be made at 15% of the remaining trade receivables.
7. The remaining debenture interest has not been paid yet.
8. The freehold land was re-valued at £1,050m. The directors decided to reflect this in the accounts.
9. Taxation for the year is estimated to be £60m and has not been paid yet.
10. No final dividends have been declared.
Required: Prepare a Statement of Comprehensive Income for the year ended 31 December 2011 and a Statement of Financial Position as at that date in a form suitable for publication, so far as the information given allows.
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