David Courtman is a business consultant. On 31 May 20-8 the following balances remain in his ledger;

£

£

Freehold premises 65,950 Office equipment 14,600 Petty cash 324 Rates 7,216 Loan - City Bank 25,000 General expenses 5,924 Insurance 1,896 Printing and stationery 1,250 Loan interest 2,748 Bank 2,728 Vehicles 12,550 Wages 26,462 Rent received 6,800 Drawings 10,050 Bad debts 1,220 Clients’ unpaid accounts Commissions received for 4,590 professional services 56,782 Capital at 1 June 20-7 63,470 154,780 154,780 On 31 May 20-8 the following information is also available:

(i) David Courtman insured his premises against fire for the first time on 1 February 20-8 with an annual premium of £1,896

(ii) There was an outstanding bill of £260 for printing and a stock of stationery valued at £378

(iii) Rates of £3,936 were paid on 1 April for the year ending 31 March 20-9

(iv) Rent received in advance from the sub-tenant was £650 You are required to:

(a) Prepare a profit and loss account for the year ended 31 May 20-8.

(b) Prepare a balance sheet as at 31 May 20-8.