Zicco owns a provision shop at Keta . On 31 December , 2020 the following trial balance was extracted from her books : Dr. Cr. Capital (1/1/2020 ) 960,000 Motor van (cost ) 680,000 Equipment ( cost ) 320,000 Accumulated depreciation : Motor van 128,000 Equipment 104,000 Inventory (1/1 / 2020) 120,000 Purchases and sales 450,000 1520,000 Returns 27,000 12,000 Carriage outwards 48,000 Carriage inwards 20,400 Trade Receivables 290,000 Trade payables 120,000 Allowance for receivables 16,000 Bad debts 60,000 Wages and Salaries 270,000 Discounts 54,000 88,000 Postage and Stationery 132,000 Utility Bills 42,000 10% Loan 160,800 Rent & Rates 128,000 4 Sundry expenses Cash Bank Personal drawings 100,000 40,000 239,400 88,000 3.108.800 3.108.800
The following additional information was made available :
i) Inventory at 31December , 2020 was valued at GH 176,000
ii) Depreciation at the rate of 40% on cost for Motor Van and 50% on Equipment on reducing balance method basis
iii) An amount of GH28,000 is accrued in respect of Postage and Stationery at 31 ^ (st) December , 2020
iv) Allowance for receivables is to be adjusted to GH 10,000 at 31 December , 2020 as a result of improvement in debt recovery efforts .
v) Rent and rates pre - paid amounted to Ghe25,600 .
vi)The loan was contracted on 1January , 2020. Provision should be made for the interest on loan .
Required:
a) Prepare the Income statement for the year ended 31 " December , 2020
b) Prepare the Statement of financial position as at 31December , 2020