Austin Allegro is a sole trader buying and selling used cars. He has not kept Sc a complete set of records and has asked you to prepare appropriate financial statements for the year ended 31st December 19_4.

(b) The Life Insurance maturity came from a policy he had taken out on his wife ten years previously — he had paid all premiums privately. It was paid in by mistake — there is no intention to use it as extra capital.

(c) Depreciation had been charged at 10% on all fixed assets and had been reflected in the accounts.

(d) Discounts received from stock creditors amounted to £500 and discounts allowed to debtors amounted to £625. ,

(e) Towards the end of December there had been a slump in the market for used cars and it was felt that the net realizable value of his stock at 31 December 19_4 was £13,250.
Using the above information you are required to prepare a Profit and Loss Account for the year ended 31st December 19_4 together with a Balance Sheet as at that date.

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Below is a summary of his bank account for the year: Cash sales paid in Receipts from Debtors Life Insurance Maturity Additional Capital Investment 9 800 23 890 2 145 2.000 Balance / at 1/1/19_4 Payments to Trade Creditors Purchase of fixed assets Sundry Expenses paid Rent paid Wages paid by cheque Insurance paid on firm Drawings (for living) Balance / at 31/12/19_4 200 13 590 3.940 640 1.500 8 740 748 8 470 7 37 835 The following additional information is also available: (a) Valuations of assets and liabilities: Creditors for stock Creditors for sundry expenses Fixed Assets Prepaid Rent Rent payable 31/12/_3 31/12/_4 1 750 200 1450 335 5 960 (Net) 8 910 (Net) 250 - 375 Wages payable Debtors 370 4 010 240 5275 Stocks of used vehicles 19 040 24 035 37 835