J Horner is the proprietor of a shop selling paintings and ornaments. For the purposes of his financial statements he wishes the business to be divided into two departments:

The following balances have been extracted from his nominal ledger at 31 August 20X7:

Stocks at 31 August 20X7 were valued at:

Department A £1,410

Department B £912

The proportion of the total floor area occupied by each department was:

Department A two-fifths

Department B three-fifths

Prepare J Horner’s trading and profit and loss account for the year ended 31 August 20X7, apportioning the costs, where necessary, to show the Department profit or loss. The apportionment should be made by using the methods as shown:

Area – Fire insurance, Lighting and heating, Repairs, Telephone, Cleaning; Turnover – General office salaries, Accountancy, General office expenses.

Transcribed Image Text:

Department A Paintings Department B Ornaments