The following trial balance has been extracted from the ledger of Bella Moon, a sole trader.

Trial Balance as at 31 May 20x6

Dr

Cr

$

$

Sales

138,078

Purchases

82,350

Carriage

5,144

Drawings

7,800

Rent, rates and insurance

6,622

Postage and stationery

3,001

Advertising

1,330

Salaries and wages

26,420

Bad debts

877

Provision for bad debts

130

Debtors

12,120

Creditors

6,471

Cash in hand

177

Cash at bank

1,002

Stock as at 1 June 20x5

11,927

Equipment

At cost

58,000

Accumulated depreciation

19,000

Capital

53,091

216,770

216,770

The following additional information as at 31 May 20x6 is available:

(a)Rent is accrued by $210

(b)Rates have been prepaid by $880

(c)$2,211 of carriage represents carriage inwards on purchase

(d)Equipment is to be depreciated at 15% per annum using the straight line method

(e)The provision for bad debts to be increased by $40

(f)Stock at the close of business has been valued at $13,551

Required:

i)Prepare Profit and Loss Account of Craz Ltd for the year ended 31 December 2011.Detailed workings and calculation of closing stock must be shown.

ii)Prepare Balance Sheet as at 31 December 2011.