1 Mr Chai has been trading for some years as a wine merchant. The following list of balances has…

1 Mr Chai has been trading for some years as a
wine merchant. The following list of

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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)