Financial Accounting: Mid-Term Assignment

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Balance of accounts of PRESTON PLASTIC MANUFACTURING COMPANY at December 31, 2011 are as follows:

| | |(in £’000) | |Cash[1] | 30,600 |  | |Investment | 59,000 |  | |Debtors | 79,800 |  | |Prepayment | 1,200 |  | |Stock | 137,200 |  | |Machinery | 47,600 |  | |Vehicles | 38,700 |  | |Plant and Building | 342,000 |  | |Accumulated Depreciation[2] | (46,000) |  | |Trade Creditors |  | 66,000 | |Long-term Loans from banks |  | 124,400 | |Equity |  | 329,300 |

[1], [2] Important Notice: With all information given in the question, we assume that the balance of account Cash and Accumulated Depreciation at 31.Dec.2011 is unadjusted, which means all cash transactions during 2011 & assets depreciation for the year 2011 have not been recorded respectively. Our doing follows this assumption and thus, has 02 important adjustments: Cash & Accumulated Depreciation balance, at the end of 2011.

A) MAKE NECESSARY ADJUSTMENT:
(in £’000)

|Adjustment of Accounts | Debit | Credit | |1. Depreciation Expenses (10%) for 2011 |  |  | |Depreciation Expenses | 42,830 |  | |Accumulated Depreciation |  | 42,830 | |2. Rental Allocation for 2011 (Oct-Dec '11) |  |  | |Rental Expense | 100 |  | |Prepayment |  | 100 | |3. Loan Interest (10%pa) |  |  | |Interest...
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