8.5 Nora Ferber’s trial balance at 30 June 20X3 was as follows:

.£

£

Motor vehicles, at cost 90,000 Debtors 80,500 Stock 120,000 Drawings 107,000 Cost of goods sold 490,000 Wages 47,500 Rates 30,000 Sundry expenses 10,000 Rent 45,000 Capital account 1 July 20X2 97,500 Provision against doubtful debts 5,000 Motor vehicle, accumulated depreciation, 1 July 20X2 15,000 Creditors 70,000 Bank overdraft 22,500 Sales 810,000 1,020,000 1,020,000 The following information is relevant:

1. Rent expense for the year ended 30 June 20X3 was £60,000.

2. Rates expense for the year ended 30 June 20X3 was £24,000.

3. The depreciation charge for the year is to be 20 per cent of the reducing balance.

4. Bad debts of £1,500 are to be written off and the provision against doubtful debts is to be adjusted to 10 per cent of debtors.

5. Wages payable at 30 June 20X3 amounted to £1,260.

6. The stock figure of £120,000 is made up as follows:

Units Cost Net realisable value

£

£

Type A 40,000 60,000 Type B 50,000 42,000 Type C 30,000 44,000 120,000 146,000 Required:

Prepare Nora Ferber’s profit and loss account for the year ended 30 June 20X3 and her balance sheet as at that date.