CRANBERRY PLC.

The following trial balance was extracted from the nominal ledger of Cranberry plc on
31 December 20X8:
£ £
Revenue 2,180,000
Inventories at 1 January 20X8 91,000
Purchases 935,000
Distribution costs 395,000
Administrative expenses 543,000
Loan interest paid 24,000
Land and buildings cost 450,000
Plant and equipment cost 460,000
Land and buildings accumulated depreciation at
1 January 20X8 208,000
Plant and equipment accumulated depreciation at
1 January 20X8 246,000
Trade receivables 340,000
Bank 64,000
Ordinary share capital (£1 shares) 180,000
Share premium 60,000
Bank loan 400,000
Retained earnings 9,000
Trade payables 54,000
Dividends paid 35,000
3,337,000 3,337,000
The following additional information is relevant.
(1) Cranberry plc paid an annual insurance premium of £24,000 for the year 1 June 20X8 to
31 May 20X9. This payment is included in administrative expenses.
(2) During the year the company made a 1 for 10 bonus issue of its ordinary shares from the
share premium. No entries have been made in respect of this.
(3) The income tax charge for the period has been estimated at £28,000.
(4) Freehold land and buildings include £150,000 for the land. Buildings are depreciated on
a straight-line basis over 10 years. Plant is depreciated on a straight-line basis at a rate of
15%
Depreciation is apportioned as follows:
Cost of sales 70%
Distribution costs 10%
Administrative expenses 20%
(5) The bank loan received on 1 July 20X8 is repayable in full in eight years. Interest is
charged at a fixed rate of 6% per annum.
(6) Closing inventories at cost amounted to £105,000.
(7) Cranberry plc is currently defending an action by a former employee in respect of unfair
dismissal. The legal advisors believe that this action will be successful. The employee is
seeking £10,000 in compensation. Provisions are charged to administrative expenses.
(8) A cheque which was sent to a supplier has been recorded in the accounting records as
£32,200. When the electronic banking report was downloaded, it was discovered that the
correct amount is £33,200.
(9) A customer of Cranberry plc is in financial difficulties. Management believe that there is
a low prospect that any of the £12,000 debt will be paid by the customer and the amount
requires to be written off as irrecoverable. Irrecoverable debts are charged to
administrative expenses.
Requirement
Prepare the statement of profit or loss for Cranberry plc for the year ended 31 December
20X8 and the statement of financial position at that date.
Statement of profit or loss for the year ended 31 December 20X8
£
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Profit / (loss) from operations
Finance costs
Profit / (loss) before tax
Income tax expense
Profit / (loss) for year
Statement of financial position at 31 December 20X8
£
ASSETS
Non-current assets
Land and buildings
Plant and equipment
Current assets
Inventories
Trade receivables
Prepayments
Cash and cash equivalents
Total assets

EQUITY AND LIABILITIES

Equity
Ordinary share capital
Share premium
Retained earnings
Non-current liabilities
Borrowings
Current liabilities
Trade payables
Provisions
Income tax payable
 Total equity and liabilities

Show your working on every information given above.