QUESTION ONE

Mrs$.$ Mpasho started business on January $01,2020$ with cash of KES. $50,000,$ furniture of KES. $10,000,$ goods of $2,000$ and machinery worth $20,000.$ During the year she further introduced KES. $20,000$ in her business by opening a bank account. From the following information extracted from her books, you are required to prepare final accounts for the ended December $31,2020.$

$\backslash$table$[[$Accounts from Incomplete Records,KES$],[$Receipt from debtors,$57,500],[$Cash sales,$45,000],[$Cash purchases,$25,000],[$Wages paid,$5,000],[$Salaries to staff,$17,500],[$Trade expenses,$6,500],[$Electricity bill,$7,500],[$Cash drawings,$3,000],[$Cash paid to creditors,$42,000],[$Discount allowed,$1,200],[$Discount received,$3,000],[$Bad debts written$-$off,$1,300],[$Cash balance at end of year,$20,000]]$

Mrs$.$ Mpasho used goods worth $2,500$ for private purposes, which is not recorded in the books. Charge depreciation on furniture $10\%$ and machinery $20\%$ p$.$a$.$ on December $31,2020$ her debtors were worth $70,000$ and creditors KES $35,000,$ stock in trade valued on that date at KES $25,000.$

Required: Prepare Income statement and Statement of Financial Position