> Part 5 Adjustments for financial statements 4 Gas charges incurred for which no invoices have yet been received amount to a total of 4,786. 5 The allowance for doubtful debts is to be set at 4 per cent of accounts receivable. Required: Prepare the following financial statements for Mr Khan's business: (a) An income statement for the year ended 30 September 2020. (b) A balance sheet as at 30 September 2020. 22.12A The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader. Trial Balance as at 31 May 2019. Dr 74 Cr Sales Purchases Carriage. Drawings Rent, rates and insurance 138,078 82,350 5,144 7,800 6,622 Postage and stationery Advertising Salaries and wages Bad debts 3,001 1,330 26,420 877 Allowance for doubtful debts Accounts receivable 130 12,120 Accounts payable 6,471 Cash in hand Cash at bank Inventory as at 1 June 2018 177 1,002 11,927 Equipment at cost accumulated depreciation as at 1 June 2018 Capital 58,000 19,000 53,091 216,770 216,770 The following additional information as at 31 May 2019 is available: (a) Rent is accrued by 210. (b) Rates have been prepaid by 880. (c) 2,211 of carriage represents carriage inwards on purchases. (d) Equipment is to be depreciated at 15% per annum using the straight line method. (e) The allowance for doubtful debts to be increased by 40. (f) Inventory at the close of business has been valued at 13,551. Required: Prepare an income statement for the year ending 31 May 2019 and a balance sheet as at that date. (Association of Accounting Technicians)