The trial balance of Russells as at 31 December 2012 is shown in Table 4.10.

*No depreciation is to be charged on freehold premises.
*All depreciation is to be provided on the straight-line basis. Plant and equipment is to be depreciated at 30% per annum and fixtures and fittings at 20% per annum.
*Aprovision for doubtful debts of 4% of trade receivables is to be established.
*Inventories held at 31 December 2012 were valued at €8,200.
*Electricity owing at the year-end amounted to €1,200.
*Wages due to staff at 31 December 2012 amounted to €4,800.

REQUIRED:
Prepare the income statement for Russells for the year ended 31 December 2012 and a statement of financial position as at that date.

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Table 4.10 Debit Credit E Sales 220,360 Freehold premises 67,500 Plant and equipment 39,000 Fixtures and fittings 15,000 Trade receivables 11,750 Bank balance 4,200 Trade payables 15,100 Inventories at 1 January 2012 7,800 Purchases 92,000 Motor expenses 4,450 Electricity 8,000 Wages 43,600 Bad debts 110 Other business expenses 3,050 Drawings 24,000 Capital as at 1 January 2012 85,000 320,460 320,460