Question 1

On December 31, 2016 the following Trial Balance was extracted from the books of Lisa Stewart.

Details/Accounts	Dr	Cr
Sales	-	480,500
Accounts payable / Creditors	-	101,250
Rent Received (Other Income)	-	39,000
Loan	-	72,000
Capital	-	670,000
Accum. Prov. for Depreciation: Motor Vehicle Jan. 2016	-	150,600
Accum. Prov. for Depreciation: Equipment Jan. 2016	-	91,840
Cash at Bank	22,000	-
Drawings	6,500	-
Building	312,000	-
Motor Vehicle Deprcn :2% x $430,000 = $8,600	430,000	-
Equipment Deprcn : 5% x ($193,300 -91,840)	193,300	-
Telephone Expense	14,200	-
Administrative expense	7,875	-
Electricity Expense	4,275	-
Discounts allowed - Expense	600	-
Return Inwards	1,500	-
Stock, January 1, 2016	13,500	-
Accounts receivable / debtors	235,000	-
Purchases	182,000	-
Office Expenses	73,500	-
Miscellaneous Expenses	7,600	-
Salary and Wages	85,000	-
Carriage inwards COGS	2,400	-
	1,591,250	1,591,250

The following additional information has been made available:

1. Telephone expense accrued $7,800.
2. Administrative Expense prepaid $1,400.
3. Depreciation is to be provided for as follows: Motor Vehicle at 2 % of cost; Equipment at 5% reducing balance method.
4. Stock at December 31, 2016 was valued at $47,000. closing

Required:

1. Prepare Income Statements for the year ending December 31, 2016.( 20 marks)
2. Prepare a Balance Sheet as at December 31, 2016. ( 20 marks)