Question: Prepare a Trading and Profit & Loss Account for the year ending 31st December, 1960 and a Balance Sheet as at that date from the following Trial Balance and supplementary information:
(a) After a little further work, the errors necessitating the Suspense Account were found. They were:
1. The balance of £800 for Fixtures and Fittings had been omitted from the Trial Balance.
2. An addition in the Purchases Book was £3,000 too little.
3. A mis-posting to General Expenses Account.
(b) Provide for Depreciation at the following rates:
Premises 2% p.a.
Fixtures & Fittings 5 % p.a.
Motor Vehicle 20% p.a.
(c) The provision for Bad Debts is to be reduced to 5% of Sundry Debtors.
(d) Allow for the prepayments:
Rates £30
Insurance £62.
(e) No Motor Expenses appear in the Trial Balance. It appears that purchases of petrol have been included with general purchases. The total amount is £120. Other Motor Expenses have been paid by A. Johnson, who estimates the amount as £50.
(f) During the year Johnson has taken goods for personal consumption. The cost of those goods was £160.
(g) The closing stock was valued at £2,800.