Gce Model Questions Vol1 2025 Financial Accounting Question 31

Company XYZ's trial balance at 31 December 2025 (figures in £ 000) shows: Sales 500, Purchases 300, Opening Stock 80, Closing Stock 70, Sundry Expenses 50, Salaries 60, Bad Debts written off 5, Allowance for Doubtful Debts (credit) 10, Building cost 200, Accumulated Depreciation - Building 40, Machinery cost 120, Accumulated Depreciation - Machinery 30. The building has a useful life of 40 years with no residual value, and the machinery has a useful life of 10 years with a residual value of £ 20 000. A provision for inventory obsolescence of 3 % of closing stock is required. Opening retained earnings are £ 30 000 and the company declares a dividend of £ 15 000. Calculate the profit for the year after all adjustments and state the retained earnings at year‑end.