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I see that you've uploaded a trial balance sheet for Endpages Bookshop, and you're requesting a Trading and Profit and Loss Account. Let's walk through the process of preparing this account.

### Step 1: Trading Account
The **Trading Account** determines the **Gross Profit** for the period. To calculate this, we follow the formula:
\[ \text{Gross Profit} = \text{Sales} - \text{Cost of Goods Sold (COGS)} \]

Where:
- **Sales** = £151,500 (as given in the trial balance)
- **COGS** = Opening Stock + Purchases + Direct Expenses - Closing Stock

From the trial balance:
- **Opening Stock** (1st Jan 2002) = £46,000
- **Purchases** = £103,500
- **Returns Outwards** (Purchases returned) = £3,500
- **Closing Stock** (31st Dec 2002) = £41,000

#### Calculation of COGS:
\[
\text{COGS} = \text{Opening Stock} + (\text{Purchases} - \text{Returns Outwards}) - \text{Closing Stock}
\]
\[
\text{COGS} = 46,000 + (103,500 - 3,500) - 41,000 = 46,000 + 100,000 - 41,000 = 105,000
\]

#### Gross Profit:
\[
\text{Gross Profit} = 151,500 - 105,000 = 46,500
\]

### Step 2: Profit and Loss Account
Now, let's calculate the **Net Profit** by considering all the indirect expenses and incomes.

#### **Expenses:**
- **Salaries and wages** = £18,700
- **Office expenses** = £2,500
- **Insurance** = £1,100
- **Electricity** = £600
- **Stationery** = £2,400
- **Advertising** = £3,500
- **Telephone** = £800
- **Rates** = £3,000
- **Discount allowed** = £100
- **Depreciation on fixtures and fittings** (this is not explicitly provided, so we may assume none unless stated otherwise)
- **Drawings** (not considered as it does not affect profit)

#### **Income:**
- **Discount received** = £200
- **Rent received** = £2,000

#### **Net Profit Calculation**:
\[
\text{Net Profit} = \text{Gross Profit} + \text{Other Income} - \text{Expenses}
\]
\[
\text{Net Profit} = 46,500 + (200 + 2,000) - (18,700 + 2,500 + 1,100 + 600 + 2,400 + 3,500 + 800 + 3,000 + 100)
\]
\[
\text{Net Profit} = 46,500 + 2,200 - 32,700 = 48,700 - 32,700 = 16,000
\]

### Step 3: Balance Sheet
The balance sheet should include assets, liabilities, and capital.

#### **Assets**:
- **Closing Stock** = £41,000
- **Debtors** = £4,800
- **Cash in hand** = £200
- **Cash in bank** = £12,000
- **Premises** = £80,000
- **Fixtures and fittings** = £5,000

#### **Liabilities**:
- **Creditors** = £7,500

#### **Capital Section**:
- **Capital** = £11,000
- **Add: Net Profit** = £16,000
- **Less: Drawings** = £14,000
\[
\text{Adjusted Capital} = 11,000 + 16,000 - 14,000 = 13,000
\]

#### **Balance Sheet Equation**:
Total Assets should equal Liabilities + Capital.

#### **Assets Calculation**:
\[
\text{Assets} = 41,000 + 4,800 + 200 + 12,000 + 80,000 + 5,000 = 143,000
\]

#### **Liabilities and Capital Calculation**:
\[
\text{Liabilities} + \text{Capital} = 7,500 + 13,000 = 20,500
\]

This is the general outline for constructing the **Trading and Profit and Loss Account** and **Balance Sheet**.

Do you want further details, or do you have any questions about this process? 

Here are some related questions you might want to consider:
1. How do returns inwards and outwards affect the final accounts?
2. Why is it important to distinguish between capital and revenue expenditures?
3. What is the significance of depreciation in the financial statements?
4. How would the balance sheet change if more liabilities were added?
5. How do accruals and prepayments impact the final accounts?

**Tip**: Always double-check the accuracy of opening and closing stocks, as they can significantly affect your Gross Profit calculation.

Learn how to prepare a Trading and Profit and Loss Account for Endpages Bookshop for the year ended 31 December 2002. This detailed guide covers key accounting concepts, including calculating gross profit, net profit, and preparing a balance sheet. Suitable for students in higher education studying accounting and finance.

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