28 Alan Ltd has the following Trial Balance as at 31 March 2020: Dr Cr Sales 436,000 Sales returns 1,360 Purchases 234,600 Rent 18,900 Office expenses 22,400 Inventory 1 April 2019 35,800 Machinery at cost 80,000 Building at cost 120,000 Equipment at cost Trade receivables 50,000 41,500 Distribution expenses Administrative expenses Short term investment Trade payables 33,600 21,400 27,810 35,650 Acc. Depreciation on Equipment 1 April 2019 Acc. Depreciation on Machinery 1 April 2019 Acc. Depreciation on Building 1 April 2019 10% Debentures purchases returns 13,500 21,680 12,000 34,000 1,345 Provision for doubtful debts 1 April 2019 1,050 Interest on Debentures 4,200 Cash in Hand 13,255 Cash at bank 45,780 Light & heat 12,980 Equity 91,700 Share premium 14,760 Retained profits 1 April 2019 31,900 Bank loan 70,000 763,585 763,585 Additional information is provided: i. The closing inventory as at 31 March 2020 is valued at 21,600 ii. The provision for depreciation on the building is 2% on cost; machinery is charged at 10% on a reducing balance basis; and equipment is depreciated on a straight-line basis. The estimated useful life of the equipment is 10 years and the residual value at the end of the useful life is estimated at 5,000 iii. The company has decided to revalue the building to 240,000 and to continue depreciating it at the rate of 2% per annum on the revalued amount. Page 5 of 6 iv. V. vi. vii. In January 2020 the company sold machinery for 19,000. This asset was originally bought in May 2017 for 28,000. This sale has not yet been recorded in the accounts. An amount of 8,400 for four months' rent ending 31 May 2020 was paid on 1 March 2020. Interest of 4% per annum on the Bank loan is still outstanding at the end of March 2020. A customer owing 14,000 to the company as at 31 March 2020 has been declared bankrupt. The company has decided to write off the amount outstanding as bad debts. viii. The company also wishes to maintain a provision for bad debts at 5% of net trade receivables. Required: Prepare in the proper format an Income Statement for the year ended 31 March 2020 and a Statement of Financial Position as at 31 March 2020. (25 marks)