8.2 Simon is a surveyor who purchases old properties in poor condition. He incurs expenditure on improving these properties, which he then resells. His balance sheet at 31 December 20X2 was as follows:

£

Properties on hand

(including expenses on purchase):

1 30,250 2 29,350 Bank balance 19,400 79,000 Capital 79,000 During 20X3 he bought three more properties:
Legal expenses Cost of Cost borne by Simon improvements £ £ £
3 36,250 1,000 260 4 24,000 750 1,000 5 25,000 800 520 He also sold the following three properties:
Legal expenses Sale price incurred by Simon £ £
1 34,000 400 3 42,500 500 4 31,250 350 General expenses incurred and paid during 20X3 amounted to £2,500.

(a) Simon’s bank account for 20X3.

(b) A profit and loss account for the year 20X3 covering Simon’s property deals and a balance sheet at 31 December 20X3.
Notes 1 Cash due from the sale of property 4 was not received until 5 January 19X4.
2 There were no other transactions during the year and all receipts and payments were by cheque.