1
Bill Smithson runs a second-hand furniture business from a shop which he rents. He does
not keep complete accounting records, but is able to provide you with the following information
about his financial position at 1 April 2008: Stock of furniture £3,210; Trade debtors £2,643; Trade
creditors £1,598; Motor vehicle £5,100; Shop fittings £4,200; Motor vehicle expenses owing £432.
He has also provided the following summary of his bank account for the year ended 31 March
2009:
All cash and cheques received were paid into the bank account immediately.
You find that the following must also be taken into account:
l Depreciation is to be written-off the motor vehicle at 20% and off the shop fittings at 10%, calculated
on the book values at 1 April 2008 plus additions during the year.
l At 31 March 2009 motor vehicle expenses owing were £291 and insurance paid in advance was
£177.
l Included in the amount paid for shop fittings were:
a table bought for £300, which Smithson resold during the year at cost,
some wooden shelving (cost £250), which Smithson used in building an extension to his house.
Other balances at 31 March 2009 were:
£
Trade debtors 4,012
Trade creditors 2,445
Stock of furniture 4,063
Required:
(a) For the year ended 31 March 2009
(i
) calculate Smithson’s sales and purchases,
(ii
) prepare his trading and profit and loss account.
(b) Prepare Smithson’s balance sheet as at 31 March 2009.
(Midland Examining Group: GCSE)