The following list of balances was extracted from the records of the Terra Nova Company for the year ended 30 June 1984:

Land and buildings, at cost Plant and machinery, at cost Accumulated depreciation, plant and machinery Sales for the year Sales returns Stock of goods for resale I. 7.83 Purchases Purchase returns Wages expense Insurance expense General expenses Trade debtors Balance at bank Owners' capital introduced Retained profits 1.7.83 Trade creditors

£

40000 30000 5000 261500 700 40000 129100 3300 38500 6000 28500 45000 7000 40000 25 LOO 29800 Further examination of the records revealed that adjusting entries were required for the following items:

(i) Stock of goods for resale 30.6.84 £36750;

(ii) Wages due but not yet paid £1 560;

(iii) Included in the insurance payments made during the year was an amount of

£1800 relating to insurance on property for the twelve months ended 31 March 1985.

(iv) Depreciation of £2500 is to be charged on plant and machinery.

(v) A payment to a supplier, amounting to £1230 was wrongly included In general expenses .

(vi) A debtors account for £700 has been identified as a bad debt and is to be written off in the current year. In addition a provision for doubtful debts is to be opened amounting to I per cent of all debtors' balances at the end of the year.

Required

(a) Prepare a work sheet in a form similar to that illustrated in Table 6.8 and enter the account balances in the initial trial balance columns.

(b) Prepare journal entries to record the adjusting entries and enter the amounts in the work sheet.

(c) Complete the work sheet and prepare a Trading and Profit and Loss Account for the year ended 30 June 1984 and a Balance Sheet at that date.