The following balances were extracted from the books of Modern Hotels on 31st Dec. 2007:

Prepare final accounts taking the following points into consideration 1. Stock on 31st Dec.07 was valued at 15,000 2. Outstanding wages 500. 3. Provision for Doubtful debts is to be maintained at 5% on Debtors. 4. Prepaid insurance was 100. 5. Provide Depreciation on Plant and machinery @ 10% and on Furniture (@5%.

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Capital 85,000 Printing and Stationery 800 Drawings 5000 Sundry Creditors 9000 Plant and Machinery 40,000 Sales 1,20,000 Accumulated Depreciation 9000 Postage and Telegram 800 Stock (1.1.07) 15,000 Bad Debts 400 Purchases 82,000 Provision for Doubtful Debts 800 Sundry Debtors 20,600 Discount Received 400 Furniture 5000 Rent Revenue 1200 Freight Inward 2000 Insurance 700 Carriage Outward 500 Salaries 20,000 Rent, Rates and Taxes 4600 Wages 1300 Cash in hand 6200 Cash at Bank 25,500 Reserve Fund 5000