Mortlake Ltd owned a building that had cost £42,000 just before the end of the current accounting year on 31 December, and a vehicle bought for

£13,000 at the same time. A new access road was announced on the balance sheet date, perhaps making the building worth about £50,000 on the open market. Stock existing at the balance sheet date had been bought for £7,000, but had deteriorated in storage and was now valued at £6,000. Debtors and creditors at the balance sheet date were £4,000 and £5,000 respectively.

You are required to prepare the balance sheet, including the equity figure as the amount needed to make the balance sheet balance. For each item where there is a choice of valuation, you should briefly note down why you have chosen the valuation you have.