Question 7.4 Tulie Ross has been in business for several years without keeping complete accounting Eccords. The following information relates to the year ended 31 December 1997: f Summarised bank account for the year ended 31 December 1997 as extracted from bank statements: E Cash banko Sale of machinery Bank loan Opening halsnes 52 000 4300 12 000 Rent and rates Bank loan reid Telephone and clectricity Piant and machinery Nowca Paid to supplies Drawings Closing halovce 3 500 4.200 3.600 2.400 15 000 10.000 22 000 5 200 2100 68 300 6800 Com 54 890 שר: י fix) Trade debtors al 31 December 1996 were [4 600 and a year later L6 000. Trade creditors at 31 December 1996 were El 800 and a vear later [2.400. The gross profit for the year was 60% of sales. The selling price of stock in trade at 31 December 1997 was £12 000. A car which had a book value of ES 500 at 31 December 1996 was sold for £4 600 on 1 January 1997. The proceds were paid into the business bank account. The rate of depreciation on cars is 25% per annum on a straight line basis All takings from customers were bankce with the exception of £800, which was used to pay a supplier's invoice, and Ll 200 which was used to pay for motor running experises. £500 was owing by the business for rent and rates on 31 December 1996, and £600 was owing on 31 December 1997. Julie had paid L80 from her private funds for business stationery during the year. Plant and machinery at 31 December 1996 had cest £18 000, accumulated depreciation at that date being £4 000. Machinery costing £6 500 on 10 June 1996 was sold on 10 March 1997. Depreciation is provided on machinery at 20% on the reducing balance basis. A full year's depreciation is provided in the year of purchase, but no provision is made in the year of sale. To assist in the purchase of additional fixed usinsJulie borrowed money from her bank on 1 July 1997. The loan was repayable in quarterly instalments of £1 800 over a two year period conimencing 30 September 1997. Each instalrent contained an cqual amount of interest. A provision was to be made at 5% for doubtful debts at 31 December 1997; the provision at 31 December 1996 was £250. hement of financial position as at 30 sept 1991 CODE E w 역 1,190 350 ang 1371) REQUIRED (a) Prepare Julie's trading and profit and loss account for the year ended 31 December 1997. (24 marks)​