S Craven started business on 1 October 19XS5 selling machines of one standard type on hire purchase terms. During the year to 30 September 19X6 he purchased machines at a uniform price of £60 and sold 1,900 machines at a total price under hire purchase agreements of £100 per machine, payable by an initial deposit of £30 and 10 quarterly instalments of £7.

The following trial balance was extracted from Craven’s books as at 30 September 19X6.

The personal accounts of customers are memorandum records (i.e. they are not part of the double entry system).
Craven prepares his annual accounts on the basis of taking credit for profit (including interest) in proportion to cash collected from customers.
Prepare Craven’s hire purchase trading account and a profit and loss account for the year ended 30 September 19X6 and a balance sheet as at that date.
Ignore depreciation of fixed assets.

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Capital 76,000 Drawings 4,000 Fixed assets 10,000 Purchases 120,000 Cash collected from customers 83,600 Rent, rates and insurance 4,500 Wages 8,600 General expenses 10,270 Balance at bank Sundry trade creditors 10,630 8,400 168,000 168,000