8.4 The following trial balance was extracted from the books of Juva, a sole trader, as at 31 December 20X1.

£

£

Capital account at 1 January 20X1 45,200 Purchases 194,100 Sales 261,450 Wages and salaries 16,720 Rent and property charges 12,930 Debtors 36,400 Sundry expenses 2,500 Drawings 9,500 Provision for doubtful debts 1,590 Cash at bank 16,500 Creditors 24,350 Stock (as at 1.1.XI)

41,060 Vehicle at cost 7,200 Accumulated depreciation 4,320 336,910 336,910 The following additional information is available:

1. The closing stock has been valued at £49,670.

2. The rent is £6,400 per annum payable half-yearly in advance on 31 March and 30 September.

3. Depreciation on the vehicle is to be provided using the straight-line method at the rate of 20 per cent per annum.

4. The provision for doubtful debts of £1,590 was the general provision as at 1.1.XI. At 31.12.XI Juva decides that £900 of the debts outstanding should be written off as irrecoverable. He also wishes to adjust the provision to 5 per cent of the outstanding debts.

5. Wages of £1,500 are outstanding at 31.12.XI.
Prepare the profit and loss account of Juva for the year ended 31 December 20X1 and his balance sheet as at that date.