A The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader.

The following additional information as at 31 May 2012 is available:

(a) Rent is accrued by £210.

(b) Rates have been prepaid by £880.

(c) £2,211 of carriage represents carriage inwards on purchases.

(d) Equipment is to be depreciated at 15% per annum using the straight line method.

(e) The allowance for doubtful debts to be increased by £40.

(f) Inventory at the close of business has been valued at £13,551. Required: Prepare an income statement for the year ending 31 May 2012 and a statement of financial position as at that date.

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Sales Purchases Carriage Drawings Rent, rates and insurance Postage and stationery Advertising Salaries and wages Bad debts Allowance for doubtful debts Accounts receivable Accounts payable Cash in hand Cash at bank Inventory as at 1 June 2011 Equipment at cost accumulated depreciation Capital Trial Balance as at 31 May 2012 Dr 82,350 5,144 7,800 6,622 3,001 1,330 26,420 877 12,120 177 1,002 11,927 58,000 216,770 Cr 138,078 130 6,471 19,000 53,091 216,770