Below is the trial balance on 31 December 2008 of a sole trader’s business, prior to adjustment, and the adjustments which must be made at balance sheet day:

Additional information:
a Stock on 31 December 2008, valued at £2,000.
b Depreciation is to be provided for as follows:
Motor vehicles — 25 percent of cost (straight line method)
Fixtures and fittings — 10 percent of reduced balance.
c General expenses owing at 31 December 2008, £50.
d Rates prepaid at 31 December 2008, £20.
e Wages and salaries accrued at 31 December 2008, £100.
Required 1 Prepare the profit and loss account for the year ended 31 December 2008.
2 Prepare the balance sheet at that date.

Transcribed Image Text:

Fixtures and fittings (cost) Provision for depreciation of fixtures and fittings Stock Purchases Discounts allowed Rent and rates Cash Sales Returns inwards Dr Cr 1,500 800 1,800 7,500 350 670 120 12,940 200 Returns outwards 90 Trade debtors and trade creditors 4,300 3,300 Wages and salaries 3,250 General expenses 330 Motor vehicles (cost) 3,000 Provision for depreciation of motor vehicles 2,250 Discounts received 200 Bank 940 Capital 2,500 23,020 23,020