Gce Model Questions Vol1 2022 Financial Accounting Question 12

The following trial‑balance figures (in £) are extracted from the books of a trading company: sales £(500{,}000), purchases £(300{,}000), opening stock £(40{,}000), closing stock £(55{,}000), purchase returns £(20{,}000), carriage inwards £(5{,}000), carriage outwards £(7{,}000), wages £(30{,}000), salaries £(45{,}000), depreciation (building) £(12{,}000), depreciation (machinery) £(8{,}000), trade receivables £(150{,}000) (existing provision for doubtful debts £(4{,}000)), trade payables £(80{,}000), other expenses £(10{,}000) and interest income £(2{,}000). The company wishes to prepare a profit and loss account. Assuming the new provision for doubtful debts should be 6 % of trade receivables, calculate the net profit for the year.