1
This question also relates to extended trial balances (see Exhibit 26.2)
From the following trial balance of John Brown, store owner, prepare a trading account and profit
and loss account for the year ending 31 December 2007, and a balance sheet as at that date, taking
into consideration the adjustments shown below:
(i) Closing stock at 31 December 2007 £120,000.
(ii) Accrued wages £5,000.
(iii) Rates prepaid £500.
(iv) The provision for doubtful debts to be increased to 10 per cent of debtors.
(v) Telephone account outstanding £220.
(vi) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost.