This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
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The question asks to prepare a Trading Profit and Loss account and a Balance Sheet. The "Required" section specifies the year ended 31st October 2025, but the provided data for Bizna Distributor Company is for the year ended 31st December 2009. I will use the data provided for Bizna Distributor Company and prepare the accounts for the year ended 31st December 2009. Part (i): Prepare Trading Profit and Loss account for the year ended 31st December 2009 Step 1: Calculate the Cost of Goods Sold (COGS). Cost of Goods Sold = Opening Stock + Purchases - Closing Stock Cost of Goods Sold = shs 285,000 + shs 1,830,000 - shs 315,000 Cost of Goods Sold = shs 1,800,000 Step 2: Calculate the Net Profit. Net Profit = Gross Profit - Expenses Net Profit = shs 600,000 - shs 360,000 Net Profit = shs 240,000 Bizna Distributor Company Trading and Profit and Loss Account For the year ended 31st December 2009 | Particulars | shs | shs | | :-------------------------- | :---------- | :---------- | | Sales | | 2,400,000 | | Less: Cost of Goods Sold | | | | Opening Stock | 285,000 | | | Add: Purchases | 1,830,000 | | | Cost of Goods Available for Sale | 2,115,000 | | | Less: Closing Stock | (315,000) | | | Cost of Goods Sold | | (1,800,000) | | Gross Profit | | 600,000 | | | | | | Less: Expenses | | (360,000) | | Net Profit | | 240,000 | Part (ii): Prepare Balance sheet as at 31st December 2009 Step 1: Calculate Total Current Assets. Total Current Assets = Closing Stock + Debtors + Bank Total Current Assets = shs 315,000 + shs 900,000 + shs 35,000 Total Current Assets = shs 1,250,000 Step 2: Calculate Total Assets. Total Assets = Fixed Assets + Total Current Assets Total Assets = shs 400,000 + shs 1,250,000 Total Assets = shs 1,650,000 Step 3: Calculate Capital (Equity). Capital = Total Assets - Current Liabilities Capital = shs 1,650,000 - shs 438,000 Capital = shs 1,212,000 Bizna Distributor Company Balance Sheet As at 31st December 2009 | Assets | shs | shs | | :-------------------------- | :---------- | :---------- | | Non-Current Assets | | | | Fixed Assets | | 400,000 | | | | | | Current Assets | | | | Closing Stock | 315,000 | | | Debtors | 900,000 | | | Bank | 35,000 | | | Total Current Assets | | 1,250,000 | | Total Assets | | 1,650,000 | | | | | | Equity and Liabilities | | | | Capital | | 1,212,000 | | | |