Statement of profit or loss for Wolverhampton plc

Wolverhampton plc is a manufacturing company. The following balances have been extracted from its books and records as at 30 June 2021: £ £ Revenue 912,000 Inventories on 01 July 2020 45,000 Purchases 300,000 Distribution costs 132,000 Administrative expenses 204,000 Dividends paid 74,400 Land (£150,000) & buildings (£750,000) at cost 900,000 Accumulated depreciation 57,600 Plant and machinery cost 390,000 Accumulated depreciation 96,000 Motor vehicles cost 150,000 Accumulated depreciation 54,000 Trade receivables 414,000 Trade payables 228,000 Prepayments 210,000 Accruals 102,000 Bank balance 132,000 Overdraft 66,000 Bank loan 145,800 Share capital – ordinary shares of £1 each 468,000 Retained earnings 792,000 Share premium account 30,000 2,951,400 2,951,400 The following information has not yet been taken account of: i. A further adjustment is required in respect of receivables as an amount due from Smith ltd of £4,000 needs to be written off. ii. The company has a policy of including a general provision for doubtful debts of 10% of year-end accounts receivable. iii. Administrative expenses include £3,550 a prepayment and a total of £3,700 accrued expenses. iv. The company has the following depreciation policy: Buildings 10% straight line Plant and machinery 20% reducing balance Motor vehicles 25% reducing balance Depreciation costs should be allocated as follows: Depreciation on buildings Cost of sales 50% Administration 50% Depreciation on plant and machinery Cost of sales 100% Depreciation on delivery motor vehicles: Distribution cost 100% v. The net realisable value of inventory at 30 June 2021 was £5,500 less than its cost of £50,750. vi. Income tax of £8,500 has been estimated and is to be recognised in the financial statements for the year ended 30 June 2021. Required: a) Prepare a statement of profit or loss for Wolverhampton plc for the year ended 30 June 2021. [15 marks] b) Prepare a statement of financial position for Wolverhampton plc as at 30 June 2021. [10 marks]