Rowlock Ltd was incorporated on 1 October 2008 to acquire Rowlock’s mail order business, with effect from 1 June 2008.
The purchase consideration was agreed at £35,000 to be satisfied by the issue on 1 December 2008 to Rowlock or his nominee of 20,000 ordinary shares of £1 each, fully paid, and £15,000 7 per cent debentures.
The entries relating to the transfer were not made in the books which were carried on without a break until 31 May 2009.
On 31 May 2009 the trial balance extracted from the books is:

You also ascertain the following:
1. Stock on 31. May 2009 amounted to £4,946.
2. The average monthly sales for June, July and August were one- -half of those for the remaining months of the year. The gross profit margin was constant throughout the year. —
3. Wrapping, postage and packing expenses varied in direct proportion to sales, whilst office:
expenses were constant each month.
4. Formation expenses are to be written off.
You are required to prepare the trading and profit and loss account for the year - ending 31 May ~ 2009 apportioned between the periods before and after incorporation, and the balance sheet as at that date.

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Sales Purchases Wrapping Postage Warehouse rent and rates Packing expenses Office expenses Stock on 31 May 2008 Director's salary Debenture interest (gross) Fixed assets Current assets (other than stock) Current liabilities Formation expenses Capital account - Wysocka, 31 May 2008 Drawings account - Wysocka, 31 May 2008 52,185 38,829 840 441 921 1,890 627 5,261 1,000 525 25,000 9,745 4,162 218 29,450 500 85,797 85,797