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

The following additional information as at 31 May 2016 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 a statement of profit or loss for the year ending 31 May 2016 and a statement of financial position as at that date.

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Trial Balance as at 31 May 2016 Dr Cr Sales Purchases Carriage 138,078 82,350 5,144 Drawings 7,800 Rent, rates and insurance 6,622 Postage and stationery 3,001 Advertising 1,330 Salaries and wages 26,420 Bad debts 877 Allowance for doubtful debts 130 Accounts receivable 12,120 Accounts payable 6,471 Cash in hand 177 Cash at bank 1,002 Inventory as at 1 June 2015 11,927 Equipment at cost 58,000 accumulated depreciation 19,000 Capital 53,091 216,770 216,770