The trial balance for Sharmar for the period ended 31.03.03 before making year-end adjustments is as follows:

The following matters have not been taken into account when preparing the above trial balance:
1. Closing inventory at 31.03.03 is valued at £15,990.
2. Heat and lighting due 31.03.03 is £230.
3. Rent paid in advance on 31.03.03 is £1500.

4. Depreciation is to be provided as follows:
5. Premises 3% on cost.
6. Fixtures and fittings 12.5% on cost.
7. Vehicles 20% reducing balance.
8. A further bad debt of £785 is to be written off and the provision for bad debts is to be at 4%
of trade receivables after write-offs.
9. The interest on the loan is 7.5% per annum and this has not been paid for the year.

Required:
Prepare an income statement for the period ended and a statement of financial position as at 31.03.03.

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Debit Credit Capital 1.04.02 49,630 Drawings 6,300 Trade receivables and trade payables 12,750 9,830 Sales 121,340 85,670 Purchases 17,110 Inventory 1.04.02 Rent and rates 6,700 Heat and lighting Wages and salaries 1,900 12,450 1,100 Bad debts Provision for bad debts 490 General expenses 710 Buildings at cost 55,500 Fixtures and fittings at cost 12,300 Vehicles at cost 33,000 Provision for depreciation as at 1.04.02: Buildings 21,300 Fixtures and fittings 4,700 8,200 Vehicles Loan 26,000 Bank 4,270 270 Cash 245,760 245,760