1
Mr Chai has been trading for some years as a wine merchant. The following list of
balances has been extracted from his ledger as at 30 April 2007, the end of his most recent
financial year.
The following additional information as at 30 April 2007 is available:
(a) Stock at the close of business was valued at £17,750.
(b) Insurances have been prepaid by £1,120.
(c) Heating and lighting is accrued by £1,360.
(d) Rates have been prepaid by £5,435.
(e) The provision for doubtful debts is to be adjusted so that it is 3% of trade debtors.
Required:
Prepare Mr Chai’s trading and profit and loss account for the year ending 30 April 2007 and a balance
sheet as at that date.
(Association of Accounting Technicians)