1 The balance on trade receivables at the year end is £110,000.

2 Two of the balances in the sales ledger have to be written off. One is £4,500 the other is £5,500.

3 The company is to provide 5 per cent for a provision for doubtful debts and

5 per cent for a provision for discounts.

YEAR 2

The sales in the year were £10,000 lower than the cash received in the year (consider the impact of this on the closing balance).

1 One of the debts that had been written off last year (£5,500) is now recoverable.

2 At the end of this year the auditor has identified £500 of the sales ledger balances as bad debts. These should be written off.

3 The provision for discounts should be increased to 10 per cent.

4 The provision for bad debts should be adjusted to 2 per cent.

Required

Show the transactions in the sales ledger and the general ledger accounts and the extract entries from the statement of comprehensive income and statement of financial position for the two years.