Income statement and the Balance Sheet

J. Briggs, a sole trader, extracted the following trial balance from his books at the close of business on December 31, 2015.

	Dr	Cr
	$	$
Purchases and Sales	61,420	130,840
Inventory (January 1, 2015)	7,940
Computer	1,900
Machinery	15,600
Cash	13,140
Accounts Receivables & Payables	12,418	11,400
Long-term loan		2,490
Allowance for doubtful debts		630
Discounts	1,356
Wages and salaries	30,200
Bad debts	6,996
Rent	5,000
Insurance	3,870
General expenses	320
Drawings	10,400
Capital (January 1, 2015)		25,200
	170,560	170,560

Notes:

Inventory at December 31, 2015: $6, 805

Wages and salaries owing at December 31, 2015: $650.

Prepaid rent at December 31, 2015 : $675

Insurance has been prepaid by $460

Increase the allowance for doubtful debts to $720

Required:

Prepare the Income Statement for the year ended December 31, 2015 (10 marks)

Prepare the Balance Sheet as at December 31, 2015. (10 marks)