Prepare an income statement for the period ended 31 December 2020 and a balance sheet as at 31 December 2020 for Locke Ltd.
Extracted text: 26. The following is the trial balance of Locke Ltd at 31 December 2020. Account name Dr Cr Sales 9,441,000 1,233,000 Other operating income Purchases 4,950,000 1,290,000 2,940,000 870,000 108,000 135,000 660,000 72,000 2,400,000 Inventory as at 1 January 2020 Administrative expenses Distribution costs Insurance expenses Heating and lighting expenses Salary expenses Rental expenses Plant and equipment Accumulated depreciation on plant and equipment as at 1 January 2020 Motor vans 480,000 150,000 Accumulated depreciation on motor vans as at 1 January 2020 Non-current investments Receivables Allowance for receivables as at 31 December 2021 30,000 66,000 960,000 60,000 Cash 1,100,000 88,000 Tax for the year Payables 8% debentures Ordinary shares (£1) Share premium Interim dividend paid Retained earnings as at 1 January 2020 Total 945,000 1,290,000 600,000 660,000 30,000 1,080,000 15,819,000 15,819,000 The following information is relevant: 1. Closing inventory at 31 December 2020 is £1,170,000. 2. Locke Ltd depreciates non-current assets as follows: Plant and equipment at 10% per annum on a straight line basis per annum Motor vans at 20% per annum on a reducing balance basis per annum 3. No heating and lighting bills for the month of December 2020 have been recorded in the accounting records. The heating and lighting invoice for 1 December 2020 to 28 February 2021 is expected to be £10,800.
Extracted text: 4. Locke Ltd allocates expenses as follows: Depreciation on motor vans is allocated to distribution costs. Depreciation on plant and equipment is allocated to administrative expenses. Heating and lighting and salary expenses are allocated 25 per cent to distribution costs and 75 per cent to administrative expenses. All other expenses are included in administrative expenses. 5. A full year's debenture interest is to be accrued. Required: Prepare an income statement for the period ended 31 December 2020 and a balance sheet as at 31 December 2020 for Locke Ltd.