Question 2

Use the following information to answer questions that follow.

The following information was found in the books of Kelebale.

Capital	32,000
Sales	160,000
Sales Returns	5,000
Furniture and Fittings	10,000
Opening inventory	10,000
Motor vehicles	25,000
Purchases	125,000
Purchases Returns	3,000
Accounts Payable	10,000
Accounts receivable	15,000
Short loan	18,000
Bank	10,000
Cash	3,000
General expenses	7,000
Electricity	5,000
Motor expenses	2,000
Telephone	2,000
Rent	5,000
Interest payable	1,500
Interest receivable	500
Closing stock	7,000

Required:

a. Prepare Kelebales trial balance as at 31 January 2016. (11 marks)

b. Prepare the income statement for the year ended 31 January 2016. (11 marks)

c. Draw the balance sheet as at 31 January 2016. (8 marks)