The following trial balance was extracted from the ledger books of Rocky Enterprises as at 31 October, 2022. DR. CR. Capital 60,813,000 Drawings 6,444,000 Purchases and sales 186,303,000 245,226,000 Receivables and Payables 23,808,000 16,386,000 Rent 2,640,000 2,250,000 Electricity 738,000 Salaries and Wages 24,804,000 Provision for doubtful debts (1 November, 2021) 978,000 Inventory (1 November, 2021)) 27,822,000 Insurance 516,000 General expenses 2,799,000 Bank 4,500,000 Cash in hand 246,000 Motor vehicles at cost 29,000,000 Provision for depreciation on motor vehicles (1 November, 2021) 10,800,000 Proceeds from sale of motor vehicle 5,750,000 Motor vehicle expenses 2,583,000 Premises at cost 30,000,000 342,203,000 342,203,000.

Additional Information: 1. Stock as at close of business was valued at KES 59,304,000 2. Rent and insurance were pre-paid by KES 220,000 and KES 282,000 respectively as at 31 October, 2022. 3. Electricity is accrued by KES 600,000. 2 4. The provision for doubtful debts is to be adjusted so that it is 5% of trade debtors after taking into account that KES 2,016,000 of the debtors were to be regarded as bad. 5. Rent receivable as at 31 October, 2022 was KES 1,500,000. 6. Depreciation on motor vehicles has been and is to be charged at the rate of 20% per annum (using straight line method). 7. On 1 November, 2021, a motor vehicle which had been purchased for KES 8,000,000 on 1 November, 2018, was sold for KES 5,750,000. The only record of this disposal is the entry in the proceeds from the sale of the motor vehicle account. (Hint: Prepare the disposal account to get the gain/loss on disposal and transfer it to the income statement accordingly}. Required: a) Income statement for the year ended 31 October, 2022. (10 marks). b) Statement of financial position as at 31 October, 2022. (10 marks