L Mann started business with £5,000 in the bank on 1 April. The business transactions during the month were as follows:

(i) Took £300 out of the bank for petty cash

(ii) Bought a second-hand van and paid by cheque £3,500

(iii) Bought goods on credit from A Supplier for £2,500

(iv) Sold goods for cash for £300

(v) Sold goods on credit for £1,000 to B Safe

(vi) Returned faulty goods to A Supplier £500

(vii) Paid sundry expenses of £50 in cash

(viii) Paid the rent of £500 by cheque

(ix) Withdrew cash drawings of £500

Stock at cost at 30 April was £1,250.

Required:

(a) Prepare the ledger accounts recording the transactions.

(b) Prepare the trial balance at 30 April.

(c) Prepare a trading, profit and loss account for April.

(d) Prepare a balance sheet as at 30 April.

(e) Calculate the percentages of:

(i) Gross profit to sales.

(ii) Net profit to opening capital.

(f) Comment on:

(i) The relationship between drawings and net profit and why it is important that Mann keeps an eye on it.

(ii) Working capital.