Question 1 : The following trial balance was extracted from the books of Ahmad Shoes at the year ended 31/12/2010;

	Debit (RM)	Credit (RM)
Purchases and sales	11,280	19,740
Cash at bank	1,140
Cash in hand	210
Capital as at 1/1/2010		9,900
Drawings	2,850
Office furniture	1,440
Rent	1,020
Wages and salaries	2,580
Discounts	690	360
Account receivables and account payables	4,920	2,490
Inventory as at 1/1/2010	2,970
Provision for doubtful debts as at 1/1/2010		270
Van	2,400
Maintenance expenses	450
Bad debts	810
	32,760	32,760

Notes:

a. Inventory as at 31/12/2010 RM3,510

b. Wages and salaries accrued at 31/12/2010 RM90

c. Rent prepaid at 31/12/2010 RM140

d. Maintenance expenses owing at 31/12/2010 RM60

e. Increase the provision for doubtful debts by RM60

f. Provide for depreciation as follows: office furniture RM180; van RM480

Required:

Draw up the Income Statement for the year ended 31/12/2010 together with a Balance Sheet as on 31/12/2010.