John owns a small business selling coffee makers to other businesses . On 31 December 2019 he Debit $ Credit $ 216,600 3,840 14,100 108,432 3,840 50,400 24,000 3,600 25,800 4,320 extracted the following trial balance . Account Name Sales Revenue Sales returns Opening inventory Purchases Purchase returns Freehold property Equipment at cost Accumulated depreciation on equipment Motor vehicle Accumulated depreciation on motor vehicle Salaries and Wages Insurance Motor expenses Advertising expenses Loan interest Receivables Allowance for receivables Payables Cash at bank Bank loan Capital Total 7200 1,920 3,000 1,800 2,400 24,600 1,800 18,300 95,868 20,400 94,500 363,360363,360 The following information is relevant . 1. Closing inventory was valued at $20,800 . 2. Equipment is depreciated by 25% on reducing balance basis. 3. Motor vehicles are depreciated by 20% on straight-line basis. 4. Accrued wages at the end of 2019 amount to $ 3,600. 5. On 1 August 2019 Johns paid $ 1,600 for insurance which is valid until 31 July 2020. 6. Irrecoverable receivables of $ 1,600 need to be written off. Required: a. Prepare John^ prime s income statement for the year ending 31 ^ (st) December 2019 b. Prepare John's balance sheet as at December 2019.

uestion 1: (25 marks) John owns a small business selling coffee makers to other businesses. On 31" December 2019 he extracted the following trial balance, Account Name Debit $ Credits Sales Revenue 216,500 Sales returns 3,840 Opening inventory 14,100 Purchases 108,432 Purchase returns 3,840 Freehold property 50,400 Equipment at cost 24,000 Accumulated depreciation on equipment 3,600 Motor vehicle 25,800 Accumulated depreciation on motor vehicle 4,320 Salaries and Wages 7200 Insurance 1,920 Motor expenses 3,000 Advertising expenses 1,800 Loan interest 2,400 Receivables 24,600 Allowance for receivables 1,800 Payables 18,300 Cash at bank 95,868 Bank loan 20,400 Capitai 94,500 Total 363,360 363,360 The following information is relevant. 1. Closing inventory was valued at $20,800. 2. Equipment is depreciated by 25% on reducing balance basis. 3. Motor vehicles are depreciated by 20% on straight-line basis. 4. Accrued wages at the end of 2019 amount to $3,600. 5. On 1 August 2019 Johns paid $1,600 for insurance which is valid until 31 July 2020. 6. Irrecoverable receivables of $1,600 need to be written off. Required: a. Prepare John's income statement for the year ending 31st December 2019. b. Prepare John's balance sheet as at December 2019. 112+12= 25 Marks)