Mr Chai has been trading for some years as a wine merchant. The following list of balances has been extracted from his ledger as at 30 April 2014, the end of his most recent financial year.

The following additional information as at 30 April 2014 is available:

(a) Inventory at the close of business was valued at £17,750.

(b) Insurances have been prepaid by £1,120.

(c) Heating and lighting is accrued by £1,360.

(d) Rates have been prepaid by £5,435.

(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.

Required:
Prepare Mr Chai's statement of profit or loss for the year ending 30 April 2014 and a statement of financial position as at that date.

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Capital Sales Trade accounts payable Returns out Allowance for doubtful debts Discounts allowed Discounts received 83,887 259,870 19,840 13,407 512 2,306 1,750 Purchases Returns inwards Carriage outwards Drawings Carriage inwards Rent, rates and insurance Heating and lighting Postage, stationery and telephone Advertising Salaries and wages Bad debts Cash in hand Cash at bank 135,680 5,624 4,562 18,440 11,830 25,973 11,010 2,410 5,980 38,521 2,008 534 4,440 Inventory as at 1 May 2013 15,654 Trade accounts receivable 24,500 Fixtures and fittings - at cost 120,740 Provision for depreciation on fixtures and fittings - as at 30 April 2014 63,020 Depreciation 12,074