B Butler is a general dealer who started business on 1 January Year 2. Equipment costing £35,000 was acquired on that date and depreciation is calculated at 10% per annum on cost

3. B Butler is a general dealer who started business on 1 January Year 2.Equipment costing £35,000 was acquired on that date and depreciation iscalculated at 10% per annum on cost.A vehicle was acquired on 1 January Year 2 at a cost of £15,000 and an additionalvehicle was purchased on 1 July Year 4 at a cost of £10,000. Depreciation ischarged at 20% per annum on the written down value.Depreciation on all assets is chargeable from date of purchase.On 1 January Year 5 he had the following assets and liabilities.Assets and liabilities £Equipment ?Vehicles ?Stock 14,920Bank Overdraft 10,350Debtors 11,350Creditors 2,610Lighting and Heating due 300Below is a summary of the entries made in the cash book for the year ended31 December Year 5.Receipts £Cash Sales 28,240Received from Debtors 18,830PaymentsWages 10,940Rent and Rates 8,200New Equipment purchased 1 July 2,000Cash Purchases 4,200Paid to Creditors 19,220Drawings 15,000Vehicle Running Expenses 4,860Heating and Lighting 1,330
The following additional information was provided on 31 December Year 5:1 The stock of goods for resale was valued at £11,000.2 Debtors and Creditors were £7,800 and £5,600 respectively.3 Discounts received and allowed during the year amounted to £250 and£400 respectively.4 Bad debts written off during the year amounted to £1,800. Butlerdecides to create a provision for doubtful debts of 5% per annum.5 Amounts owingRent and Rates £90Heating and Lighting £1206 Vehicle running expenses prepaid £190.(a) You are required to calculate:(i) Butler’s opening capital on 1 January Year 5;(ii) Total Sales for year ended 31 December Year 5;(iii) Total Purchases for year ended 31 December Year 5.(b) Using the above information prepare the Trading and Profit and Loss Accountsfor the year ended 31 December Year 5 and the Balance Sheet at that date.

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