Salamanca Ltd’s trial balance as at 31 May 2014 was as follows:
| Dr | Cr | |
| £ | £ | |
| Advertising | 3,400 | |
| Loan repayable 2025 | 40,000 | |
| Bank balance | 20,000 | |
| Sales delivery expenses | 1,890 | |
| Directors’ salaries | 77,300 | |
| Non-current assets: depreciated value as at 1 June 2013 | 248,720 | |
| Loan interest paid (finance costs) | 1,900 | |
| Dividends paid | 5,000 | |
| Office expenses | 10,930 | |
| Office salaries | 26,200 | |
| Opening inventory at 1 June 2013 | 23,500 | |
| Retained earnings as at 1 June 2013 | 209,000 | |
| Purchases | 117,620 | |
| Revenue | 345,000 | |
| Sales employees’ salaries | 36,640 | |
| Share capital (25p nominal shares) | 100,000 | |
| Share premium | 140,000 | |
| Trade payables | 86,200 | |
| Trade receivables | \underline{347,100} | \underline{\qquad} |
| \underline{920,200} | \underline{920,200} | |
Notes:
1 Closing inventory at 31 May 2014 was £27,900.
2 Depreciation for the year totalled £8,350.
3 There were neither accruals nor prepayments at the year-end.
4 Tax on profits amounting to £16,000 was to be accounted for.
Prepare the company’s income statement for the year ended 31 May 2014 and its
statement of financial position as at that date.
