W Sims is self-employed as a painter and decorator. On 31 May 20-7 the following trial balance was extracted from his books;

£

£

Income from decorating Commissions received 29,000 from builders 950 Cost of paint and wallpapers 4,750 Equipment 1,675 Vehicles 4,700 Rent and rates 2,250 Wages 6,900 Drawings 7,000 Stationery 1,750 Vehicle expenses 2,700 Insurance 650 Sundry expenses 1,800 Customer’s unpaid account 790 Trade creditors 840 Telephone 190 Cash at bank and in hand 126 Capital 1 June 20-6 4,491 35,281 35,281 Notes:

(i) There were no opening or closing stocks of paint and wallpapers

(ii) Vehicle expenses includes £100 road tax for the year ending 31 May 20-8

(iii) There is an unpaid telephone bill of £36 on 31 May 20-7

(iv) Rates prepaid at 31 May 20-7 are £90

(v) On 31 May 20-7 there was an unused stock of stationery amounting to £300 You are required to:

(a) Prepare a profit and loss account for the year ended 31 May 20-7.

(b) Prepare a balance sheet as at 31 May 20-7.