Required:

a) Prepare a statement of profit or loss account for the year ended 31 May 2019.

b) Prepare a statement of financial position as at 31 May 2019.

Question 1 The following trial balance has been extracted from the ledger of ITCL sole trader. Trial Balance as at 31 May 2019 Dr Sales 138 078 Purchases 82 350 Carriage 5 144 Drawings 7 800 Rent, rates and insurance 6 622 Postage and stationery 3001 Advertising 1 330 Salaries and wages 26 420 Credit losses 877 Allowance for credit losses 130 Accounts receivables 12 120 Accounts payables 6 471 Cash in hand 177 Cash at bank 1 002 Inventory as at 1 June 2018 11 927 Equipment at cost 58 000 accumulated depreciation 19 000 Capital 53 091 216 770 216 770 The following additional information as at 31 May 2019 is available: (0) Rent is accrued by N$210. (ii) Rates have been prepaid by N$880. N$2 211 of carriage represents carriage inwards on purchases. (iv) Equipment is to be depreciated at 15% per annum using the straight line method. (v) The provision for doubtful debts to be increased by N$40. (vi) Inventory at the close of business has been valued at N$13 551