T. Smith started in business on 1 August 2023, with £60,000 capital in cash. During the first year he kept very few records of his transactions.

The assets and liabilities of the business at 31 July 2024 were:

During the year, Smith withdrew £25,000 cash for his personal use, but he also paid £8,000 received from the sale of his private car into the business bank account.
Required:
From the above information, prepare a balance sheet showing the financial position of the business at 31 July 2024 and indicating the net profit for the year.

Transcribed Image Text:

Freehold premises Mortgage loan on the premises Inventory Trade receivables Cash and bank balances Trade payables 160,000 120,000 50,000 4,000 8,300 14,000