The following trial balance has been extracted from the ledger accounts of Y, a sole trader dealing in house

maintenance accessories.
Trial balance as at 31st December 2021
Dr Cr
Rs Rs
Inventory 1st January 2021 416,000
Carriage outwards (Transport cost when delivering the goods) – other expenses 45,000
Carriage inwards (Transport cost when purchasing the goods) – cost of sales 37,000
Returns inwards / Sales return 15,400
Returns outwards / Purchases return 34,100
Purchases 1,884,300
Sales 3,804,400
Salaries and wages 614,000
Warehouse rent 37,000
Insurance 13,560
Motor expenses 19,100
Office expenses 4,120
Lighting and heating expenses 8,940
General expenses 2,450
Premises 920,000
Motor vehicles at cost 134,000
Accumulated depreciation 20,000
Fixtures and fittings at cost 19,000
Accumulated depreciation 4,000
Receivables 425,600
Payables 316,000
Cash at bank 51,060
Drawings 220,000
Capital 688,030
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4,866,530 4,866,530
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Additional information:

(i) Closing inventory is valued at Rs525,000.

(ii) Motor vehicles should be depreciated using the straight-line method at 25% per annum and fixtures
and fittings using the reducing balance method at 20% per annum.

(iii) Insurance accrued amounts toRs3,000 and lighting and heating prepaid isRs900.

(iv) Bad debts of Rs4,200 is to be written off. Allowances for doubtful debts should be 1% of net
receivables.

(v) The owner withdrew Rs3,000 from the business bank account for personal use.

Required:
(a) Prepare an Income statement for the year ended 31st December 2021.

(b) Extract a statement of financial position as at 31st December 2021.