Isadorah Boom provides the following information:

Additional information at 31 August 20*8

■ Stock was valued at £6,543.
■ Wages owing amounted to £380.
■ Rent paid in advance £500.
■ Provision for doubtful debts is to be maintained at 5% of debtors outstanding at the year-end.
■ Depreciation is to be provided on fixed assets at the following rates:
– Machinery at 10% per annum using the straight line method
– Equipment at 50% per annum using the reducing balance method.

Required

a) Prepare a trading and profit and loss account for the year ended 31 August 20*8.
b) Prepare a balance sheet at 31 August 20*8.

Transcribed Image Text:

Stock 1 September 20*7 Purchases Trial balance at 31 August 20*8 Dr Cr Sales Returns inwards Returns outwards Carriage inwards Carriage outwards Bad debts Bad debts recovered Wages Rent payable Light and heat expenses Telephone General expenses Provision for doubtful debts Discount received Machinery at cost Equipment at cost Trade debtors Trade creditors Drawings Bank overdraft Cash in hand Provision for depreciation Machinery Equipment Capital £ 6,483 48,972 127 348 812 711 18,461 6,500 3,481 1,856 15,860 60,000 36,000 6,400 13,500 136 219,647 £ 97,481 197 137 276 432 2,968 2,487 36,000 31,500 48,169 219,647