2. K.K. Menasha is in business as a trader. A trial balance taken out as on 31st January, 2006, was as follows:

GH GH

Purchases 84,000

Sales 100,480

Return inwards& outwards 272 696

Salaries & wages 8,200

Rent & rates 1,720

Sundry Expenses 1,500

Bad Debts 268

Provision for bad debts-1st Feb. 2005 560

Stock on hand-1st Feb. 2005 27,260

Insurance. 800

Fixtures & Fittings:

-1st February, 2005 2,800

-Additions on 30th September, 2005 480

Motor Vehicle:

-1st February, 2005 1,840

-Sales of vehicle (NBV 1/2/05, 160) 240

Sundry Debtors & Creditors 9,220 7,704

Cash at Bank & in hand 7,640

Capital Account 41,520

Drawings Account 5,200 _______

151,200 151,200

You are required to prepare Statement of Profit or Loss for the year ended 31st January 2006, and draw up a Statement of Position as at that date.

The following information is to be taken into account.

1.Outstanding amounts not entered in the books were: Rent 72, sundry expenses 180.

2.Prepayments were: Rates 120, Insurance 20

3.Stock on hand on 31st January 2006 was valued at 30,900.

4.Provision for doubtful debts is to be 680

Depreciation is to be charged as follows: Fixtures and Fittings, 10% p.a; Motor Vehicles 25% p.a.