Reference no: EM131537661

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.