On 1 January 19X1, J. Wall used his savings of £25000 to open a shop. He transferred his £25000 to a business bank account and on 2 January bought equipment for the shop for £4000 and a van for £10 000. He did not maintain proper accounts but he provides you with the following information relating to his situation on 31 December 19X1:
(a) He has a stock of goods which cost £4000
(b) Customers owed him £3000
(c) The balance on the business bank account was £15 000
(d) He owed suppliers £5000 for goods purchased.
(e) He owed £500 rent to his landlord.
(f) His rates which are £200 a month have been paid up to 31 March 19X2.
(g) It was agreed that the shop equipment should be valued at £3500 and the van at £7500.
(h) Mr Wall had withdrawn £4500 for his own use during the year
Required:
(i) Show the calculation of profit for 19X1.
(ii) Produce the accounting equation as at 31 December 19X1.