Answer the required

b. John owns a small business selling coffee makers to other businesses. On 315 December 2018 he extracted the following trial balance. Trial Balance Account Name Debit $ Credit $ 541.500 9,600 35.250 271.080 9.600 126.000 37,500 60.000 9.000 27.000 Sales Revenue Sales retums Opening inventory Purchases Purchase returns Freehold property New motor vehicle (trade-in-deducted) Equipment at cost Accumulated depreciation on equipment Old Motor vehicle at cost Accumulated depreciation on old motor vehicle Salaries and Wages Insurance Motor expenses Advertising expenses - Loan interest Receivables Allowance for receivables Payables Current licibilities Cash at bank Bank loan Non-Current Wabines 10.800 18,000 4.800 7.500 4,500 6,000 (61,500 4,500 45,750 239,670 51.00 0 Capital joventions Total 236,250 908,400 908,400 A The following information is relevant. 1. Closing inventory was valued at $52.350. 2. Equipment is depreciated by 25% on reducing balance basis. 3. Motor vehicles are depreciated by 20% on straight-line basis. - love's 4. On 31 May 2018 Johns traded in his motor vehicle for a new one. The new motor vehicle cost $63,000 and the trade-in value of the old motor vehicle was $25,500. At the time Johns acquired the new motor vehicle, He recorded a cash payment of &37,500 against a new motor vehicle account. No other entries have yet been made regarding this transaction. rent 5. Accrued (wages at the end of 2014 amount to $4,500.X he 6. On 1 August 2018 Johns paid $1,800 for insurance which is valid until 31 July 2019. 7. Irrecoverable receivables of $2,100 need to be written off. 8. Ahmed decides to increase the allowance for receivable by $2.400. Required: a. Prepare John's income statement for the year ending 315 December 2018. b. Prepare John's balance sheet as at December 2018. (15+15 = 30 Marks)