Haruko Hinoki owns a sole trader business selling wooden furniture and other items. Haruko also hand crafts cedar wood furniture and other items for high$-$end customers. On $31$ October $2023,$ Haruko extracted the following trial balance.

Trading account: $$

Sales $2,234,500$

Opening inventory $750,500$

Purchases $1,250,000$

Other revenue and expenses

Other income

$50,000$

Rent $70,000$

Heating and lighting $12,300$

Advertising expense $25,000$

Wages and salaries $120,700$

Motor expenses $34,000$

Discounts allowed $25,000$

Balance sheet accounts:

Motor vehicle at cost $100,000$

Motor vehicle $-$ accumulated depreciation $20,000$

Equipment at cost $250,000$

Equipment $-$ accumulated depreciation $75,000$

Receivables $580,000$

Allowance for receivables $15,000$

Bank $85,000$

VAT liability $88,500$

Payables $299,500$

Long$-$term loan $300,000$

Capital $350,000$

Drawings

$130,000$

Total $3,432,500$

Total $3,432,500$

The following information is relevant:

The closing inventory on $31$ October $2023$ was valued at $565,400.$

Included in other income is a payment of $5,000$ received in advance for a cedar wood bathtub that Haruko will deliver to the customer in December $2023.$

Haruko depreciates her motor vehicle on the reducing balance basis by $20\%$ per annum.

Haruko depreciates her equipment on the straight$-$line basis by $15\%$ per annum.

Haruko expects that $12,800$ due from customers will be irrecoverable and must be written off.

The allowance for irrecoverable receivables is to be set at $5\%$ of net receivables at the year end.

On $1$ September $2023,$ Haruko had paid $15,000$ of rent for the three months until $30$ November $2023.$

On $1$ August $2023,$ Haruko had paid $12,000$ for advertising for the four months until $30$ November $2023.$

Haruko estimates that an accrual for heating and lighting expenses of $2,000$ is required.

The long$-$term loan is repayable in $10$ years' time. Interest payable on the loan is $9\%$ and will be paid once per year.

Required:

a$.$Prepare Haruko Hinoki's income statement for the year ended $31$ October $2023.$

Remember to show all your workings clearly.

b$.$Prepare Haruko Hinoki's balance sheet as at $31$ October $2023.$

Remember to show all your workings clearly.