The above information has been taken from the company’s books as at 31 December 20X7, but the following has not been allowed for:

(a) Inventory at the end of the year is A25,000.

(b) Audit fees owing amounted to A500.

(c) Machinery and vehicles are to be depreciated by 10% and 20% respectively.
Satisfy yourself that total sources equal total applications before making necessary adjustments for (a)–(c). Then draw up the balance sheet and income statement.

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2.4 Kings Happy Co. Sales 147,500 Land and buildings 60,000 Plant and machinery 40,000 Purchases 50,000 Wages and salaries 41,000 Salesmen's commission 6,000 Vehicles 30,000 Share capital 150,000 Inventory at start of year 20,000 Debtors 20,000 Rent, insurances, sundry expenses 8,500 Cash discounts allowed 1,500 Shares in listed company 40,000 Cash at bank and in hand 25,500 Creditors 37,000 Retained profits 6,000 Dividends received from listed investment 2,000