The following trial balance was extracted from the books of Hans Jorge a sole trader, on 31^st December 2020

Sh. Sh.

Capital 2,880,000

Freehold buildings at cost 1,120,000

Motor vehicles at cost 1,094,000

Furniture and fittings at cost 240,000

Stock as at 1^st Jan 2020 960,000

Purchases and sales 9,408,000 11,088,000

Debtors and Creditors 936,000 695,200

Discounts allowed and received 195,200 119,200

Returns inwards and outwards 16,000 28,800

Rent received 44,000

Loan (interest payable 5% per annum) 192,000

Interest on loan 4,800

Proceeds of sale of motor vehicle 150,000

Provision for doubtful debts 27,200

Bad debts 52,000

Wages and salaries 1,127,200

Drawings 256,000

General expenses 138,400

Bank balance 108,800

Rates and insurance 48,000

Provisions for depreciation-Furniture and fittings 160,000

- Motor vehicle 320,000

15,704,400 15,704,400

Notes:

1. Stock as at 31^st December 2020 was valued at Sh.1,360,000.
2. Included in General expenses is a sum of Sh.26,400 being expenses on electricity for domestic use.
3. A vehicle purchased on 1^st January 2018 at Sh.450,000 was sold on 1^st January 2020 at Sh.150,000. The only record of the transaction is the credit of Sh.150,000 to the proceeds of sale of motor vehicle account.
4. As at 31^st December 2020,wages and salaries outstanding amounted to Sh.66,400.
5. Prepaid rates and insurance as at 31^st December 2020 stood at Sh.12,000.
6. Interest paid is only a half of the amount due for the year ended 31 December 2020.
7. Provision for Doubtful debts is to be adjusted to 5% of the debtors.
8. Depreciation is to be provided for as follows:

• Furniture and fittings at 5% on reducing balance method
• Motor vehicle at 20% on straight line method

9. Rent owing from a tenant who occupies a part of the building was Shs.40,000 on 31^st December 2020.

Required:

1. Statement of Financial Performance for the year ended 31^st December 2020

(10 Mark)

2. Statement of Financial Position as at 31^st December 2020 ( 5 Marks)