The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader.
TRIAL BALANCE AS AT 31 December 20X9
	Dr	Cr
	$	$
Sales		138,000
Purchases	78,000
Delivery expenses	6,500
Drawings	20,200
Prepayment for insurance	3,300
Postage and stationery	7,700
Advertising	1,100
Salaries and wages	27,000
Irrecoverable debts	580
Receivables	15,000
Payables		6,000
Cash on hand	1,200
Cash at bank	11,500
Inventory as at 1 January 20X9	14,500
Equipment at cost	37,500
Accumulated depreciation		12,800
Capital		47,280
6% Loan		20,000
Total	224,080	224,080

The following additional information as at 31 December 20X9 is available.

1 The bill for telephone expense is received quarterly in arrears. You have received a bill for a telephone expense on 1^st of February in the amount of $450.

2 Prepayment on Insurance was made on 1^st of August 2019.

3 $2,500 of delivery expenses represents delivery on purchases made and the rest is for the delivery of the products that we have sold

4 Equipment has to be depreciated. The useful life of the Equipment is 10 years with the salvage value of $2,500. The method of depreciation is a declining balance method.

5 The allowance for receivables has to be equal to 5% of Receivable balance

6 Inventory at the close of business has been valued at $5,000

7. Salary for December of $3,100 has not been accrued by the accountant.

8. The sales figure includes $2,000, for which the services have not actually been performed.

9. Interest expense for the year was $700.

10. The accountant forgot to show the receipt of cash of $1,000 from your creditors.

11. The Loan was obtained on 1^st of November 20X9.

Required

(a) Prepare a statement of profit or loss for the year ended 31 December 20X9 (30 points)

(b) Prepare a statement of financial position as at that date. (30 Points)