Theodore has run a management consultancy for a few years. His trial balance at 31 December 20X2 was...

Theodore has run a management consultancy for a few years. His trial balance at 31 December 20X2 was as follows:

	Dr	Cr
	£	£
Cash at bank		33,400
Freehold property	180,000
Capital at 1.1.X2		73,000
Long-term loan		100,000
Creditors		5,000
Debtors	38,000
Fees earned		225,000
Interest paid	9,000
Drawings	32,000
Heating and lighting	9,600
Other office expenses	22,800
Wages and salaries	145,000
	434,400	436,400

The following information is available:

1. Theodore owes a further £1,000 in interest at 31 December 20X2.

2. Office expenses include a payment for rates of £4,500 covering the period from 1 October 20X2 to 31 March 20X3.

3. Office expenses amounting to £3,000 have been incurred but not entered in the books at 31 December 20X2.

Prepare Theodore’s profit and loss account for the year ended 31 December 20X2 and his balance sheet as at that date.