Franco is in business as a sole trader. The following balances were extracted

from his books on $31$ January $2014.$

Depreciation policy is as follows:

i$.$ The buldings are depreciated at the rate of $2\%$ per annum using the

straight$-$line method. Land and buildings consist of land, cost $$50000,$

and buildings, cost $$100000.$ No depreciation is charged on the land.

ii$.$ Fixtures and fittings at the rate of $15\%$ per annum using the straight$-$line

method.

iii. Computer equipment at the rate of $25\%$ per annum using the d minishing

$($reducing$)$ balance method.

Trade receivables, $$3000,$ were considered irrecoverable. A provision for

doubful debts of $5\%$ is to be maintained.

REQUIRED

a$)$ Prepare the income statement for the year ended $31$ January $2014.$

b$)$ Prepare the statement of fnancial position at $31$ January $2014.$

Additional information at $31$ January $2014$

Inventory was valued at $$15600.$

Wages and salaries includes $$15000$ drawings by Franco.

Marketing expenses, $$6750,$ were prepaid.

No interest had been paid on the bank loan.

Computer equipment costing $$8000$ was purchased by cheque on $25$ January

No entries had been made in the books.