Gladys Jones provides the following information:

Additional information at 31 August 20*8
■ Stock was valued at £16,984.
■ Insurance paid in advance £180.
■ Telephone bill outstanding £351.
■ Provision for doubtful debts to be maintained at 2% of debtors outstanding at the year-end.
■ Depreciation is to be provided on fixed assets at the following rates:
– Premises 2% per annum straight line
– Office equipment 10% per annum straight line
– Vehicles 40% per annum reducing balance.

Required

a) Prepare a trading and profit and loss account for the year ended 31 August 20*8.
b) Prepare a balance sheet at 31 August 20*8.

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Trial balance as at 31 August 20*8 Dr Stock 1 September 20*7 Purchases Sales Returns inwards Returns outwards Carriage inwards Insurance Wages Motor expenses Light and heat expenses Telephone General expenses Provision for doubtful debts Discount allowed Premises at cost Office equipment at cost Vehicles at cost Provision for depreciation Premises Office equipment Vehicles Trade debtors Bank Cash Capital Drawings Trade creditors £ 18,461 115,268 816 348 2,400 105,892 8,420 2,436 1,348 7,421 436 120,000 15,000 50,000 Cr £ 296,431 203 280 52,800 6,000 39,200 15,200 6,132 228 104,958 42,750 12,684 512,556 512,556