Study the following accounts of two companies and then answer the questions which follow. Both companies are stores selling textile goods.

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Trading and Profit and Loss Accounts R Ltd T Ltd Sales 250,000 160,000 Less Cost of goods sold Opening stock 90,000 30,000 Add Purchases 210,000 120,000 300,000 150,000 Less Closing stock 110,000 190,000 50,000 100,000 Gross profit Less Expenses 60,000 60,000 Wages and salaries 14,000 10,000 Directors' remuneration 10,000 10,000 Other expenses 11,000 35,000 8,000 28,000 Net profit 25,000 32,000 Add Balance from last year 15,000 8,000 40,000 40,000 Less Appropriations General reserve 2,000 2,000 Dividend Balance carried to next year 25,000 27,000 20,000 22,000 13,000 18,000 Balance Sheets