The following list of balances has been extracted from the books of Prema Rama at 30 September 2016:

	RM	RM
Capital		20,000
Loan account		2,000
Drawings	1,750
Freehold premises	8,000
Furniture and fittings	500
Plant and machinery	5,500
Inventory at 1 October 2015	8,000
Cash at bank	650
Provision for doubtful debts		740
Purchases and sales	86,046
Sales		124,495
Bad debts	256
Trade receivables	20,280
Trade payables		10,056
Bank charges	120
Rent	2,000
Return inwards	186
Return outwards		135
Wages and salaries	11,750
Travelling expenses	1,040
Carriage inwards	702
Discount allowed	48
Discount received		138
General expenses	2,056
Energy costs	2,560
Printing and stationery	6,120
	157,564	157,564

Additional information:

1. Inventory at 30 September 2016 is valued at RM7,550.
2. Interest on the loan at 5% per annum has not been paid at 30 September 2016.
3. Rent includes RM250 paid in advance.
4. Plant and machinery is to be depreciated by 10% per annum.
5. Furniture is to be depreciated by 5% per annum.
6. The provision for doubtful debts is to be adjusted to RM1,014.

REQUIRED:

1. Prepare the Income Statement and the Statement of Financial Position for Prema Rama as at 30 September 2016.