EX 2 Financial statements for Naomi's Frames Naomi's Frames Trial balance as at 5 April 20X5 Trading account: Sales 295,000 Opening inventory 19,200 Purchases 199,000 Carriage inwards 1,850 Other revenue and expenses: Subscription income 1,200 Rent 15,500 Heating and lighting 4,000 Advertising expense 2,500 Motor expenses 4,450 Discounts allowed Carriage outwards 1,600 1,100 Balance sheet accounts: Equipment 12,000 Equipment accumulated depreciation 3,600 Motor vehicle 50,000 Motor vehicle accumulated depreciation 12,250 Receivables 25,500 Allowance for receivables 1,000 Bank 9,700 VAT liability 17,350 Payables 16,800 Bank loan 10,000 17,500 28,300 374.700 374,700 Capital Drawings The following information is relevant. 1 The closing inventory at 5 April 20X5 is valued at 18,200. 2 The subscription income of 1,200 received relates to the period from 6 August 20X4 to 5 August 20X5. 3 Depreciation on the equipment is provided at 10% per annum on the straight line basis. 4 Depreciation on the motor vehicle is provided at 25% per annum on the reducing balance method. 5 Naomi estimates that 1,100 due from customers will be irrecoverable and must be written off. 6 The allowance for receivables is to be set at 5% of net receivables at 5 April 20X5. 7 Rent includes a prepayment of 3,000. 8 Advertising expense includes a prepayment of 500. 9 The heating bill will arrive on 10 April and about 200 is expected to relate to the period 6 until 5 April 10 The bank loan is repayable in 8 years' time. Interest payable on the loan is 9% and will be paid once per year. Required: 1. Prepare the income statement for Naomi's Frames for the period ended 5 April 20X5. 2. Prepare the balance sheet for Naomi's Frames as at 5 April 20X5 3. Present all your workings