13.5 Mr Inc trades as a sole trader and asks you to prepare accounts covering the previous year’s period. He does not keep books of account but, by questioning him, you obtain the follow¬ ing information about his current situation, with information for the start of the year also being provided.

31 Dec. 20X2 1 Jan. 20X2

£

£

Premises 120,000 100,000 Creditors 50,000 40,000 Plant and machinery 50,000 35,000 Cash 5,000 5,000 Vehicles 20,000 15,000 Stock (raw materials and finished goods)

40,000 35,000 Debtors 15,000 10,000 You find that he introduced £25,000 of his own capital into the business during the year, and made drawings of £20,000. He also took finished goods from the business valued at £2,500 for his own use. The figures provided are net of depreciation which can be ignored in this exercise.
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