4.3 The following is the balance sheet of Stondon, a trader, at 31 December 20X3:

Stondon Balance sheet as at 31 December 20X3 £ £ £
Fixed assets Furniture and fittings 800 Current assets Stock 5,384 Trade debtors 4,162 Bank 888 10,434 Less: Current liabilities Trade creditors −3,294 Working capital 7,140 7,940 Financed by Capital 7,940 In January 20X3 Stondon sold certain private investments for £4,200; he purchased a motor van for business use for £3,000 and paid the balance of the proceeds into his business bank account.
At 31 December 20X3, trade debtors amounted to £4,124, stock was valued at £6,891 and trade creditors amounted to £3,586. Stondon’s business bank account was overdrawn by £782. His drawings during 20X3 were £12,840.
The total of running expenses charged to the profit and loss account for 20X3 amounted to £14,420. This total included £500 for depreciation of the motor van.
Stondon’s gross profit is at the rate of 25 per cent of selling price for all goods sold during 20X3.

(a) Prepare Stondon’s balance sheet at 31 December 20X3.

(b) Calculate Stondon’s net profit for 20X3 on the basis of changes in capital.

(c) Reconstruct the trading and profit and loss account of Stondon’s business for the year 20X3.