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The following balances were extracted from the books of Kenricks Garage at 31 December 2020:
| | Debit | Credit |
| | $ | $ |
| Purchases and sales | 1,250,500 | 2,870,000 |
| Capital | | 450,000 |
| Inventory at January 1, 2020 | 235,000 | |
| Returns | 42,200 | 22,500 |
| Wages | 340,500 | |
| Rent | 80,000 | |
| Rates | 15,500 | |
| Motor vehicle | 800,000 | |
| Provision for depreciation motor vehicle | | 120,000 |
| Equipment | 950,000 | |
| Provision for depreciation equipment | | 95,000 |
| Fixtures & fittings | 150,000 | |
| Provision for depreciation fixtures & fittings | | 5,000 |
| Drawings | 8,000 | |
| Long-term loan | | 600,000 |
| Trade receivables & payables | 35,000 | 94,000 |
| Provision for bad debts | | 1,500 |
| Commission received | | 6,000 |
| Carriage outwards | 12,000 | |
| Carriage inwards | 2,500 | |
| Rent received (from G. Lascelles) | | 30,000 |
| Bank | 347,300 | |
| Cash | 25,500 | |
| | 4,294,000 | 4,294,000 |
Additional information:
a) Inventory as at December 31, 2020 was $35,300
b) Depreciate Equipment at 10% and motor vehicle at 15% on their balances and fixtures & Fittings at 10% on the cost.
c) Wages was owed for $12,000.
d) Rates prepaid were $3,000.
e) Commission received was owed $4,000.
f) On August 1, 2020, Kenrick sublet a section of the premises to G. Lascelles at $15,000 per month.
g) The provision for bad debts is to be revised to 10 % of trade receivables.
Required:
1. Prepare the Income Statement for the year ended 31 December 2020 and,
2. Prepare a Statement of Financial Position as at 31 December 2020.
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