Sylvester runs a consultancy business, employing two members of staff as consultants and a secretarial assistant. Because he has done an accountancy course, he is able to prepare his own accounting records and statements. He consults an accountant periodically for tax advice. Sylvester’s accounting yearend date is 31 January.

In the year to 31 January 20X8 Sylvester has built up the following income and expenditure balances on his accounts:

£

Staff consultants’ salaries 47 090 Secretarial assistant’s salary 14 441 Premises expenses — office rental 125750 Premises expenses — other 4419 Consultancy fees 239 000 Telephone — office 4 200 Mobile phone 2419 Entertainment 3 007 Membership subscriptions let36 Administration costs 3 422 Sundry expenses 1 620 Electricity 5 187 CHAPTER 8 ADJUSTMENTS TO THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET: PART 1 | 173 Note the following additional information:

1. Sylvester pays the two assistant consultants a basic salary plus a bonus based upon performance. The bonus for each consultant for the year ended 31 January 20X8 will be the higher of 10% of total consultancy fees billed in the year and £24 500. The bonus element of salaries must be accrued for at the year-end.

2. £366 of the membership subscriptions relate to the period after 31 January 20X8.

3. — Office telephone charges include bills for the 10 months to 30 November 20X7. Phone charges for the business vary very little from month to month and the charges for December and January should be in line with previous months.

4. Sylvester rings his accountant for an estimate of costs in relation to tax advice for the year. The accountant suggests that an accrual of £400 will probably be appropriate.

Prepare Sylvester's profit and loss account for the year ending 31 January 20X8.