Practice questions:
During 1998 Country Furniture had sales which were three times the amount of its purchases and trading expenses which were 25 per cent of the figure for purchases. The business has £4,000 in the bank at 31 December 1998, the year end. and this is half the amount it has incurred in trading expenses. Premises were purchased for £75.000 and one-third of this was funded by a bank loan.
Draw up a trial balance for Country Furniture as at 31 December 1998 and show the figure for capital.
Stock at the beginning of the year was the equivalent of 2 months sales.