Self-test Andrew List of balances at 31 December 2009 Motor vehicles at cost 5,600 Fixtures and fittings at cost 4,200 Land and buildings at cost 5,600 Loan 1,680 Advertising 280 Administration expenses 1,316 Loan interest 56 Bank overdraft 840 Debtors 3,150 Creditors 2,086 Profit and loss account at 1 Jan 2009 5,250 Provision for doubtful debts at 1 Jan 2009 210 Capital account – Andrew 5,446 Sales 10,850 Purchases 5,180 Opening stock at 1 Jan 09 3,500 Motor vehicles (acc depreciation at 1 Jan 2009) 1,680 Fixtures and fittings (acc depreciation at 1 Jan 2009) 840 You are required to prepare the trial balance at 31 December 2009. Thereafter, the following additional information must be brought into account. It is important that you show all your workings.

(i) Stock at 31 December 2009 is valued at £4,300.

(ii) Administration expenses include £144 which is an advance payment for rent for the 12 months from 1 September 2009.

(iii) Depreciation is to be calculated as follows:

(a) Fixtures and fittings: 25 per cent using the straight line method.

(b) Motor vehicles: 20 per cent using the reducing balance method.

(iv) Provision for doubtful debts should be made equal to 10 per cent of outstanding debtors.

(v) During the year the company engaged office cleaners at a cost of £140. No payment has been made and therefore the full amount has to be provided for in administrative expenses.

(vi) There is a charge of £100 for accounting fees for the year. This amount is unpaid and must be accrued as an additional administrative expense.

You are required to prepare a profit and loss account and balance sheet for Andrew for the year ended 31 December 2009.