1. Verona Technologies Limited commenced in business on the 1 January 2015. On that date 120,000 ordinary shares with a face (par) value of €1 each were issued at par and the proceeds lodged to the company bank account.
During the year ended 31 December 2015 the following transactions occurred:
Purchase of equipment by cheque €100,000.
Purchases of stock on credit €220,000.
Sales on credit €580,000.
Payments to creditors for stock €155,000.
Wages and salaries paid €140,000.
Rent paid €45,000.
Insurance paid €17,000.
Dividends paid €40,000.
Remuneration paid to directors €30,000.
Cash received from debtors €310,000.
Amount borrowed from bank €200,000.
Loan repayments €40,000 (including interest of €16,000).
Notes: (1) All money received is lodged.
(2) All payments are made by cheque.
(3) Closing stock was valued at €70,000.
(4) Depreciation is calculated at a rate of 20% per annum on cost.
(5) Corporation tax for the year is, estimated to be €20,000.
Required:
(a) Profit and Loss Account for the year ended 31 December 2015.
(b) Balance Sheet as at 31 December 2015.