A Paolo trades in promotional goods. His customers order items like mouse mats, biros, playing cards, golf balls and so on, printed with their own logo. Paolo keeps a stock of blank goods. When he receives an order from a customer he sends the plain items of stock to a local printer who adds the customer's logo and address details. The business is run from a shed in Paolo's back garden at home. The shed is supplied with electricity; the cost of the electricity is billed together with Paolo's domestic supply. He estimates that one-sixth of the bill is attributable to electricity used in the shed. His electricity bills for the year to 31 March 20X6 total £3072.

Apart from the electricity, Paolo's records show the following items of sales and expenses for the year:

£

Discounts allowed to customers 88 Travelling expenses 3914 Sales 118 242 Opening stock at 1 April 20X5 5918 Cost of printing 17291 Telephone 1 671 Mobile phone call charges 419 Purchases 43 947 Discounts received from suppliers 133 Accountancy and tax advice 800 Office sundry expenses 977 Marketing 2 663 Interest received 204 Purchases returns 1 774 Closing stock at 31 March 20X6 4261 Prepare Paolo's profit and loss account for the year ending 31 March 20X6.