The following balances have been extracted from the books of Jim Ltd as at 31 March 2008:

Additional information:
1 Stock at 31 March 2008 was valued at £14 000.
2 Furniture and fittings and the vehicles are depreciated at a rate of 15 per cent and 25 per cent, respectively on cost.
3 Corporation tax owing at 31 March 2008 is estimated to be £25 000.
4 A dividend of 40p per share is proposed.
5 The company’s authorized share capital is £100 000 of £1 ordinary shares.
Required:

(a) Prepare Jim Ltd’s trading and profit and loss account for the year to 31 March 2008 and a balance sheet as at that date.

(b) Why would the business not necessarily be worth its balance sheet value as at 31 March 2008?

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Advertising Bank Creditors Debtors Furniture and fittings: At cost Accumulated depreciation (at 1.4.07) Directors' fees Profit and loss account (at 1.4.07) Purchases Rent and rates Sales Share capital (issued and fully paid) Stock (at 1.4.07) Telephone and stationery Travelling expenses Vehicles: At cost Accumulated depreciation (at 1.4.07) Wages and salaries Dr Cr 000 000 3 11 12 118 20 9 6 00 8 124 10 21 270 652 70 40 10 24 379 379