Dorothy has been trading as the ‘Smash Hit’ music shop for several years but has never kept full accounting records. A summary of the business bank account for the year ended 31 October 19_6 is given below.

(1) All takings were banked, with the exception of £830 which had been used to purchase new furniture for Dorothy’s house.
(2) Closing debtors were equivalent to one week’s sales. One quarter of this total is considered ‘doubtful’ and should be provided for. Assume that the shop was open for fifty weeks in the year.
(3) Closing stock valued at selling price was £10 395. Average mark-up on cost price was 75%.
(4) Shop fixtures are to be depreciated by the ‘straight line’ method over a five-year period. By 31 October 19_6, the fixtures had been owned for exactly two years.

Required: '
Prepare appropriate financial statements for Dorothy’s business for the year ended 31 October 19_6.

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Opening balance 700 Paid to suppliers 23 600 Cash banked (see note 1) Closing balance 42 900 Rent and rates 1 500 1 400 Light and heat 2 200 Advertising 950 Wages of assistants Drawings Sundry expenses 5 530 10 300 920 45 000 45 000 Details of assets and liabilities (other than the bank balance) at the start and end of the financial year are as follows: 1 November 19_5 31 October 19_6 Debtors Creditors Advertising prepaid Advertising accrued Stocks at cost Shop fixtures 218 3 750 - (see note 2) 4 950 600 6 120 250 - (see note 3) 10 620 (see note 4)