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The following trial balance was extracted from the books of Mawingu, a sole trader, as at 31^st March 2021

Particulars	Sh. 000	Sh. 000
Capital account		4,200
Premises at cost	3,000
Purchases	11,400
Sales		19,902
Trade receivables	2,100
Plant and machinery at cost	4,500
Salaries and wages	2,724
Postage and stationery	105
Carriage inwards	105
Carriage outwards	60
Opening inventory	1,800
General reserve		1,200
Cash at bank	318
Cash in hand	84
Bad debts	57
Allowances for bad and doubtful debts		21
Office general expenses	90
	26,343	26,343

Additional Information:

1. Closing stock was valued at Sh. 2,160,000
2. Mawingu is entitled to a salary of Sh. 720,000 per annum
3. Allowance for doubtful debts is to be adjusted to 3% of trade receivables
4. It was discovered that inventory as at 31^st March 2021 had been overstated by Sh. 50,000. No entry was made to rectify the overstatement.
5. Interest on capital is to be allowed at 10% per annum
6. 10% of the profit is to be transferred to general reserve.
7. Depreciation is to be provided as follows:

Asset	Rate per Annum
Premises	2% on straight line method
Plant and Machinery	10% on straight line method

Required:

1. Income statement for the year ended 31^st March 2021 (12 Marks)
2. Statement of financial position for the year ended 31^st March 2021 (8 Marks)

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