Question 1.

The following is the trial balance of Billy Travers, a sole-trader, as at 31st December 2017

Dr Cr

Premises: 1.560,000

Plant and Machinery 450,000

Sales 8,595,000

Purchases 5,250,000

Inventory as at 1/1/2017 360,000

wages and salary 558,000

Rent and Rates 114,000

light and heat 255,000

Sales return 199,500

Purchase returns 225,000

Advertising 270,000

Interest expenses 54,000

Insurance 45,000

Trade receivables 840,000

Trade payables 555,000

Bank 210,000

Drawings 120,000

10%bank loan (2022) 540,000

Capital 1/1/2017 370,500

Totals 10,285,500 10,285,500

Notes: Inventory on the 31st December 2017 was valued at 400,000

Requirements:

a) Prepare the statement pf Profit and Loss for the year ended 31st December 2017

b) Prepare the statement of financial position as at the 21st December 2017