Mr R Graham is a sole trader and the financial year of his business ends on

$31$ December of each year. As per the draft financial statements of the business, the

profit before tax of the business was Rs$2,145,700$ for the year ended

$31$ December $2022$ and the equity of the business at $31$ December $2022$ amounted to

Rs$6,024,885.$ The business pays tax on profit at the rate of $15\%$ per year. The

following table provides information on the balances of Machinery and Motor

Vehicles at $1$ January $2022.$

Machinery $($Rs$)$ Motor Vehicles $($Rs$)$

Cost $9,000,0008,250,000$

Accumulated Depreciation $2,475,0003,712,500$

The accountant of the business forgot to consider the following information

regarding Machinery and Motor Vehicles in the preparation of the financial

statements of the business for the year ended $31$ December $2022.$

$1.$ On $1$ July $2022,$ the business traded in a machine and replaced it by a new

machine. The machine which was traded$-$in was acquired at a cost of

Rs$2,000,000$ on $1$ April $2018$ and was ready for use on the same day. The

trade$-$in$-$allowance was Rs$1,500,000.$ The cost of the new machine was

Rs$2,500,000$ and the new machine was ready for use on $1$ July $2022.$ The

balance due after deducting the trade in allowance was financed by a bank

loan which was approved on $30$ June $2022$ at an annual interest rate of $9\%.$

$2.$ The business acquired a new motor vehicle at a cost of Rs$1,500,000$ on

$1$ September $2022$ and the motor vehicle was ready for use on the same day.

The acquisition of the motor vehicle was financed by a bank loan which was

approved on $31$ August $2022$ at an annual interest rate of $9\%.$

$3.$ The policy of the business is to charge depreciation on a proportionate basis

using the straight$-$line method at the rate of $5\%$ per year on machinery and at

the rate of $10\%$ per year on motor vehicles.

Required:

$($a$)$ Calculate the correct amount of profit or loss for the year ended $31$ December

$2022$ for the business of Mr R Graham. $[6$ marks$]$

$($b$)$ Calculate the carrying amount of Machinery and the carrying amount of

Motor Vehicles at $31$ December $2022$ for the business of Mr R Graham.

$[3$ marks$]$

$($c$)$ Calculate the correct amount of Equity at $31$ December $2022$ for the business

of Mr R Graham. $[2$ marks$]$