ASSIGNMENT TWO, QUESTION FIVE. From the following trial balance of John Brown, store owner, prepare a trading account and profit and loss account for the year ended 31 December 2017, and a balance sheet as at that date, taking into consideration the adjustments shown below: Trial Balance as at 31 December 2017 Dr Cr GHC GHC Sales 400,000 Purchases 350,000 Sales returns 5,000 Purchases returns 6,200 Opening stock at 1 January 20X7 100,000 Provision for doubtful debts 800 Wages and salaries 30,000 Rates 6,000 Telephone 1,000 Shop fittings at cost 40,000 Van at cost 30,000 Debtors and creditors 9,800 7,000 Bad debts 200 Capital 179,000 Bank balance 3,000 Drawings 18,000 593,000 593,000 i. Closing stock at 31 Dec. 2017 GHC120,000. ii. Accrued wages GHC5,000. iii. Rates prepaid GHC500. iv. The provision for doubtful debts to be increased to 10 per cent of debtors. v. Telephone account outstanding GHC220. vi. Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost. QUESTION SIX Mr Christian has been trading for some years as a wine merchant. The following list of balances has been extracted from his ledger as at 30 April 2017, the end of his most recent financial year. GHC Capital 83,887 Sales 259,870 Trade creditors 19,840 Returns out 13,407 Provision for doubtful debts 512 Discounts allowed 2,306 Discounts received 1,750 Purchases 135,680 Returns inwards 5,624 Carriage outwards 4,562 Drawings 18,440 Carriage inwards 11,830 Rent, rates and insurance 25,973 Heating and lighting 11,010 Postage, stationery and telephone 2,410 Advertising 5,980 Salaries and wages 38,521 Bad debts 2,008 Cash in hand 534 Cash at bank 4,440 Stock as at 1 May 2016 15,654 Trade debtors 24,500 Fixtures and fittings at cost 120,740 Provision for depreciation on fixtures and fittings as at 30 April 2017 63,020 Depreciation 12,074 The following additional information as at 30 April 2017 is available: (a) Stock at the close of business was valued at GHC17,750. (b) Insurances have been prepaid by GHC1,120. (c) Heating and lighting is accrued by GHC1,360. (d) Rates have been prepaid by GHC5,435. (e) The provision for doubtful debts is to be adjusted so that it is 3% of trade debtors. Required: Prepare Mr Christians trading and profit and loss account for the year ended 30 April 2017 and a balance sheet as at that date.