SGC Ltd is a trading company. The following balances were extracted from the books on 30 April 2010. $ Inventory (stock) at 1 May 2009 48500 Raw materials (Purchases) 178000 Raw materials (Purchase) returns 9000 Carriage inwards 16500 Revenue (Sales) 370000 Office expenses 19750 Office salaries 59 300 Property (Land and buildings) at cost 250000 Computer equipment (cost) 80 000 Office fixtures and fittings (cost) 40000 Provision for depreciation of computer equipment 28000 Provision for depreciation of office fixtures and fittings 15000 Other operating (Sundry) expenses 9800 Advertising and marketing costs 24000 Finance costs (Debenture interest) paid 3000 Authorised and issued share capital 100000 $0.50 ordinary shares 50000 200000 $1.00 8% preference shares 200 000 Non-current liabilities (12% debentures repayable 31 December 2020) 50000 General reserve 40000 Profit and loss account 1 May 2009 1300 Trade receivables (debtors) 42000 Provision for doubtful debts 1500 Trade payables (creditors) 35500 Cash (Bank) 3450 Dr Additional information: 1 Inventory (stock) at 30 April 2010 was $57000. 2 At 30 April 2010 Office expenses, $450, were prepaid. Office salaries, $1800, were accrued. 3 Depreciation is to be charged on: computer equipment at 25% per annum using the diminishing (reducing) balance method; office fixtures and fittings using the straight-line method at 20% on cost. 4 The provision for doubtful debts is to be maintained at 5% of trade receivables (debtors). 5 On 30 April 2010 the directors of SGC Ltd Transferred $20000 to the general reserve. Paid the full dividend on the preference shares. Paid an ordinary share dividend of $0.10 per share.

1. (a)Prepare the income statement (trading and profit and loss account and the appropriation account) of SGC Ltd for the year ended 30 April 2010.[22]
2. (b)Prepare the balance sheet of SGC Ltd at 30 April 2010.[18]