David Nicholson is the owner of a textile business. He has completed his trading and profit and loss account for the year ended 31 December 20-2.

The following balances remain in his ledger:

You are required to:

(a) Prepare a balance sheet as at 31 December 20-2 clearly showing all the items under the appropriate headings.

(b) David Nicholson had taken drawings in four equal instalments, by cheque, at the end of each quarter.
You are required to write up the drawings account and the capital account, including all relevant dates and transfers, and balance the accounts for the year ended 31 December 20-2.

Transcribed Image Text:

Net profit Capital at 1 January 20-2 Drawings Debtors 18,500 25,750 5,000 3,475 Creditors 1,025 Motor vehicles 16,500 Office equipment 5,650 Furniture and fittings 3,800 Bank 5,380 Cash 520 Stock at 31 December 20-2 4,950