Pollt Ltd has a year-end of 31 December. At 30 November 2012 the balances stated on the right appear in its ledger. Following transactions took place in December 2012:

(i) Sales of £85,000 plus VAT are made on credit.
(ii) A motor car costing £8,000 plus VAT is bought and paid for by cheque.
(iii) Materials are purchased on credit for £27,000 plus VAT.
(iv) Materials costing £3,000 plus VAT are returned to the supplier and a refund given by cheque.

(v) Administration expenses of £2,400 plus VAT are incurred and paid for by cheque.
(vi) A VAT refund of £1,567 for the quarter ended 31 Oct. 2012 is received by cheque from HMRC.
(vii) Customers pay the balance outstanding at 30.11.2012 by cheque, deducting £2,000 cash discount.
(viii) Suppliers are paid £42,000 by cheque.

VAT is 17.5% in all cases.

Required:

(a) Prepare the VAT account for December 2012, showing the closing balance.

(b) Calculate the bank balance at 31 December 2012.

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VAT owing to Customs and Excise Bank overdraft Trade receivables £3,250 £6,250 £127,000