This question also relates to extended trial balances (see Exhibit 28.2). From the following trial balance of John Brown, store owner, prepare a statement of profit or loss for the year ending 31 December 2017, and a statement of financial position as at that date, taking into consideration the adjustments shown below:

(1) Closing inventory at 31 December 2017 £120,000.
(2) Accrued wages £5,000.
(3) Rates prepaid £500.
(4) The allowance for doubtful debts to be increased to 10 per cent of accounts receivable.
(5) Telephone account outstanding £220.
(6) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost.

Data From Exhibit 28.2

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Trial Balance as at 31 December 2017 Dr Cr f Sales Purchases Sales returns 400,000 350,000 5,000 Purchases returns 6,200 Opening inventory at 1 January 2017 100,000 Allowance 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 Accounts receivable and accounts payable 9,800 7,000 Bad debts 200 Capital 179,000 Bank balance 3,000 Drawings 18,000 593,000 593,000