Problem - The following trial balance has been extracted from the books of account of Pisa Limited as at 31 December 2015:
|
Dr |
Cr |
|
€'000 |
€'000 |
| Administrative costs |
2,370 |
|
| Bank |
|
130 |
| Called up share capital: |
|
|
| Ordinary shares of €1 each |
|
800 |
| 10 % cumulative preference shares |
|
200 |
| Dividends received |
|
120 |
| Distribution costs |
900 |
|
| Investments at costs |
700 |
|
| Motor Vehicles: |
|
|
| At cost |
100 |
|
| Accumulated depreciation (at 1 January 2015) |
|
40 |
| Interim dividend paid (10c per ordinary share) |
80 |
|
| Equipment: |
|
|
| At cost |
7,000 |
|
| Accumulated depreciation (at 1 january 2015) |
|
4,000 |
| Preference dividend paid |
10 |
|
| Revenue reserves at 1 January 2015 |
|
3,000 |
| Purchases |
8,000 |
|
| Sales |
|
13,200 |
| Share premium account |
|
380 |
| Stock |
2,000 |
|
| Creditors |
|
2,080 |
| Debtors |
2,790 |
|
|
23,950 |
23,950 |
Additional information:
1) Stock at 31 December 2015: €2,400,000.
2) Depreciation is charged on motor vehicle at a rate of 20% on cost. The equipment relates entirely to distribution activities and depreciation is charged on it at a rate of 50% on the reduced balance.
3) The amount due for corporation tax at the year end and based on the profits for 2015 was estimated to be €530,000.
4) The directors propose to pay a final ordinary dividend of 20c per ordinary share.
Required: Prepare Pisa's profit and loss account for the year to 31 December 2015 and a balance sheet as at that date.