(a) Prepare the income statement of Nirwana Dealers at year-end; and

(b) The balance sheet at the same date, and make notes to balance sheet NB: Show all your calculations.

Trial balance shows the below balances:

Debtors control 42 500

Bad debts 878

1. The bank statement for December 20.2 was received after the trial balance had been drawn up.

The following still have to be taken into consideration:

1.1 a debtor paid an amount of R1 500 directly into the firms bank account.

1.2 A cheque of R400 previously received from another debtor has been dishonoured by the bank and must be cancelled. Discount of R20 was allowed to the debtor and this must be cancelled.

2. An amount of R220 is to be written off trade debtors as irrecoverable.

3. Create a provision for bad debts equal to 4%.

kindly assist with the above adjustments. Thank you