Q4: Prepare Income Statement and Balance Sheet from the following Trial

Balance of Abc Company

Trial Balance on 30 September 2020
Debit		Credit
Owners capital		125,000
Drawings - owners	25,000
Purchases	160,000
Wages	30,000
Opening inventories	25,000
Travelling expenses	5,000
Plant and machinery	105,000
Furniture	45,000
Cash and cash equivalents	59,000
Accounts receivable	50,000
Accounts payable		33,000
Bank loan		50,000
Rent expenses	6,000
Marketable securities	58,000
Purchase returns		12,000
Sales returns	5,000
Miscellaneous expenses	4,000
Stationery expenses	8,000
Salary expenses	25,000
Sales		365,000
Service revenue		17,500
Interest		7,500
Total	610,000	610,000
1. Closing inventory was RO. 30,000
2. Salary expenses of RO. 1,500 were outstanding.
3. Cash collected for the services to be performed in future periods is RO. 5500
4. Depreciation rate for Plant & Machinery is 25% per annum and depreciation expenses for Furniture is 10% per annum.