LIMITED COMPANY ACCOUNTS

The following trial balance for Imperial Toys Ltd has been prepared

T. B. of Imperial. Toys Ltd at 31/12/20

DR. CR.
£’000 £’000
Retained Earnings 11,727
Sales 25,147
Purchases 8,021
Selling Expenses 894
Other Expenses 1,953
Rent 895
Heat & Light 1,208
Audit 26
Wages 6,060
Buildings 1,650
Machinery 8,985
Buildings – Acc Dep’n 533
Machinery – Acc Dep’n 4,655
Intangible Assets 4,079
Interest Received 150
Interest Paid 23
Profit on Disposal 12
Stock (opening) 4,366
Debtors 2,884
Bank 7,118
Creditors 3,695
Dividends 1,527
Equity 2,159
Share Premium 500
Loan 1,111
49,689 49,689

Additional information:
1. Closing stock has been counted and had a cost is £4,882,000. However £15,000 of this
stock is damaged and will have to be disposed of, with no scrap value.
2. Land & Buildings are to be depreciated by £33,000, with Machinery depreciated by 30% on
the reducing balance basis.
3. Bad debts are to be £182,000.
4. Of the Rent, a payment of £420,000 was made on November 1 2020 for the six months
ending April 30. A Heat & Light invoice of £2,600,000 was paid in 2021 relating to the 6
months ending 31 March 2021.
5. £200,000 out of this year’s profits will be transferred to a general reserve.
6. Tax for the year is to be £804,000.
Remember when preparing the accounts, the trial balance is a summary of all the transactions that
have already happened. The late adjustments have not been recorded in the accounts yet.
Each of the late adjustments have to be entered in the accounts twice, because of the double-
entry principle of bookkeeping
 Income Statement of Imperial Toys y/end 31/12/20
£'000 £'000
Sales
Less: Cost of sales
Opening stock
Purchases

Closing stock

Gross Profit
Profit on Disposal

Less: Expenses
Selling Expenses
Other
Rent
Heat & Light
Audit
Wages
Depreciation - L & B
Depreciation - Machinery
Bad Debts

Operating Profit
Interest Received
Interest Payable
Profit Before Tax
Taxation
Profit After Tax
 Statement of Financial Position of Imperial Toys Ltd as at 31/12/20
COST ACC. DEP. NBV
£'000 £'000 £'000
ASSETS
Non-Current Assets
Intangible Assets
Buildings
Machinery

Current Assets
Stock
Debtors
Prepayments
Bank

Total Assets
LIABILITIES
Current liabilities
Accruals
Creditors
Taxation

Non-current liabilities
Loan
Total Liabilities
Net Assets

Capital & Reserves

Share Capital
Share Premium
General Reserve
Retained Earnings