SECTION B ESSAY QUESTIONS [40 MARKS]

Answer two questions in this section. QUESTION 1 [20 MARKS]

B Otse, a sole trader, extracted the following trial balance from his books at the close of business on 31 July 2018

	Debit	Credit
Purchases	65, 240
Sales		137, 425
Capital		45, 845
Bank	20, 000
Cash	200
Discount allowed	2, 400
Returns Inwards	3, 580
Returns outwards		1, 400
Carriage inwards	2, 410
Rent	6, 780
Provision for doubtful debts		500
Office furniture	5, 600
Motor van	15, 000
Accounts Receivables	12, 300
Accounts Payables		10, 500
Drawings	19, 600
Salaries and wages	42, 000
General expenses	560
Total	195, 670	195, 670
Notes
i. Closing inventory 31 March 2017 P6, 500
ii. Accrued salaries and wages P5, 000
iii. Prepaid rent P800
iv. Provide for depreciation as follows: Office furniture P560;
Motor van P3, 750
REQUIRED:
a. Prepare a Statement of Comprehensive Income for the year ended 31 July 2018.
b. Prepare a Statement of Financial Position as at 31 July 2018.