The following balances were extracted from the books of Rosy Cheeks at the end of March 2017. Rosy rented a section of the business premises to a tenant on December 1, 2016 for $500 per month. January 1, 2017 she raised the rent by 20%. Details DR CR Capital 120,500 Drawings 10,000 Long Term Loan 42,500 Insurance 5,200 Fixtures and Fittings 90,000 Provision for depreciation: Fixtures and fittings 10,000 Debtors 75,000 Commission received 4,000 Carriage Inwards 3,700 Returns 3,600 4,800 Carriage Outwards 5,000 Creditors 30,000 Sales 255,000 Purchases 140,500 Motor Vehicle 120,000 Provision for depreciation: Motor Vehicle 20,000 Rent Received (from tenant) 3,000 Wages and Salaries 25,000 Bad debts 4,500 Provision for bad debts 7,000 Stock at April 1, 2016 18,000 Bank 34,500 Rent paid 10,000 Cash 22,800 Discounts 4,000 6,000 537,300 537,300

Year-end notes:

a) Stock at March 31, 2017 is $18,300; however it appears that an additional amount, $1,700 was found in a store room. The amount was deemed material and has ALREADY been accounted for. b) Fixtures and Fittings are to be depreciated using the straight line method at a rate of 10% per annum; and the reducing balance method is to be used to depreciate motor vehicles at a rate of 16% per annum. c) Accrued wages was $1,200 and commission received is owing by $900 d) Monthly payments for insurance amounts to $400 e) On October 1, 2016, the Rosy took goods amounting to $600 from the warehouse and continued to do so at the beginning of every month up to June 2017. f) The Provision for bad debts is to be revised to 5% of debtors Required:

1. Prepare the Statement of Profit or Loss for Rosy Cheeks (30 marks)

2. Prepare a Statement of Financial Position. (20 marks)