Stars Ltd’s account balances at 31 December 20x5 are as follows:

Required 1 Prepare a profit and loss statement for the year ending 31 December 20x5.
2 Prepare a classified balance sheet as at 31 December 20x5.

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Bank overdraft 1,620 Cash on hand 400 Debtors 4,000. Creditors 5,000 Cash sales 54,000 Cash purchases 42,000 Credit purchases 9,000 Credit sales 26,000 Sales returns 950 Purchase returns 1,100 Stock (1/1/20x5) 6,500 Stock (31/12/209) 5,400 Electricity 350 Office equipment 6,900 Office furniture 1,200 Motor vehicles 28,000 Bank loan 17,000 Rent expense 9,800 Advertising 3,000 Wages 5,600 Office expenses 1,300 Carriage inwards 850 Carriage outwards 1,280 Discount received 380 Discount allowed 1,000 Sundry expenses 870 Stationery 450 Capital 18,350 Drawings 1,250 Commission received 1,250