The year-end Trial Balance of a retail trader is shown. You are informed as follows:

(i) Cost of goods in hand on 30 .6. 2010 was £72,000.

(ii) Non-current assets are to be depreciated using the straight-line method, time apportioning for the months of use. Vehicles acquired on 1 October 2009 are expected to have a 20% scrap value after five years of use. Furniture, acquired on 1 July 2009, is expected to be used for ten years with negligible scrap value.

(iii) A debt of £5,000 is to be written off and an allowance for doubtful debt set up at 5% of remaining receivables.

(iv) Rent has been agreed at £3,000 per month. A third of the premises is used as the owner’s residence.

(v) £12,000 salary remains unpaid as at year-end.

(vi) Loan obtained from Lucy Brown on 1 August 2009 carries interest at 12% per annum and is repayable by 31 July 2014.

Required:

Prepare the Statement of income for the year ended 30 June 2010 and the Statement of financial position as at that date.

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Trial Balance as at 30.6.2010 Motor vehicles Furniture Purchases Sales Salaries Rent Interest paid to Brown Receivables/payables Inventory - 1 July 2009 Stationery Carriage inwards Postage Capital account Business rates Telephone Loan from Brown Cash book £'000 £¹000 50 40 348 78 40 3 45 42 12 14 7 - 12 9 - 67 767 590 I 27 I I 90 60 - 767