Self-test Washer Trading Ltd was formed with an authorised share capital of 500,000 £1 ordinary shares.

The following is the list of balances of Washer Trading Ltd at 31 December 2010.

Trade creditors 195,000 Trade debtors 260,000 Bank overdraft 78,000 Bank interest 5,200 Office expenses 122,200 Selling expenses 26,000 Share premium account 156,000 Land and buildings at cost 520,000 Office fittings at cost 390,000 Accumulated depreciation at 1 January 2010 78,000 Motor vehicles at cost 520,000 Accumulated depreciation at 1 January 2010 156,000 Opening stock at 1 January 2010 325,000 Purchases 481,000 Sales 975,000 Issued share capital 416,000 Revaluation reserve 91,000 Provision for doubtful debts at 1 January 2010 18,200 Profit and loss account at 1 January 2010 486,200 The following additional information must be taken into account in preparing the financial accounts:

(i) Stock at 31 December 2010 was valued at £216,000.

(ii) Rent is payable annually in advance. Payment of £36,000 was made on 1 September 2010 for the year to 31 August 2011.

(iii) Depreciation is to be charged as follows:

(a) Office fittings: 20 per cent straight line.

(b) Motor vehicles: 30 per cent reducing balance.

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

(v) During the year computer consultants were engaged. Their bill has not yet been paid, nor provided for in the accounts. The amount due is £28,000.

(vi) It is expected that the audit fees for 2010 will be £14,000.

Prepare the trading and profit and loss account for the year ended 31 December and the balance sheet at that date.