The trial balance of Sally Glen’s business as at 31 December year 8 is as follows:

Adjustments 

a Closing inventory as at 31 December year 8 amounted to

£19,000.

b Depreciation is to be provided on shop premises on a straightline basis at 2 per cent per annum.

c Depreciation is to be provided on the delivery van at 25 per cent per annum on a diminishing balance basis.

Prepare an income statement for the year ended 31 December year 8, and a statement of financial position as at that date.

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3 3 Bank 23,000 Capital as at 31 December year 7 370,000 General expenses 8,000 Inventory at 31 December year 7 18,000 Provision for depreciation on premises as at 31 December year 7 21,000 Provision for depreciation on delivery van as at 31 December year 7 14,000 Payables 20,000 Purchases 242,000 Receivables 60,000 Rent, rates and insurance 23,000 Sales revenue 365,000 Shop premises at cost 350,000 Delivery van at cost 32,000 Wages 34,000 790,000 790,000