In each of the following situations identify whether the item should be included in the balance sheet of Transom Trading at 31 December 1991, and if so at what amount and under which heading. Transom Trading is a retailer of motor spares and accessories. In all cases reasons for your decision must be given.

(a) A freehold shop bought in August 1991 for £~8000.

(b) A mortgage of £30 000 taken out to buy the shop in August 1991.

(c) Goods on the shelves at the end of the day on 31 December 1991.

These goods had a resale value of£ 12 000 and had been purchased by Transom Trading for £8000

(d) Delivery van, costing £6000, which Transom Trading ordered on 20 December 1991 but which was finally delivered and paid for on 2 January 1992.

(e) Shop fittings which were worth £3000 and had been bought at an auction by Transom Trading for only £1500 prior to opening the shop in August 1991.

(f) A Ford Fiesta costing £3500 which the owner of Transom Trading had bought in November 1991 for his wife to usc. He had found that the Ford Granada Estate which he had bought second-hand in September for £4000 was being used exclusively for collecting and delivering goods for Transom Trading and not as a family car as originally intended.

(g) One cash register which was rented from Equipment Supplies at an annual rental of £200.

(h) One cash register which Transom Trading had bought in November 1991 for £600.

(i) A bank overdraft which amounted to £6500 on 31 December 1991.

(j) A supply of seat belts which the owner of Transom Trading had bought for £600 in September from a market trader in good faith and which were subsequently found to be defective.