Lakshmi runs a secretarial agency. The following trial balance was prepared on 31 January 20–1:
Additional information:
1. At 31 January 20–1:
• Commission receivable outstanding amounted to $30
• Wages accrued amounted to $320.
2. The insurance is for 15 months from 1 February 20–0.
3. Lakshmi occupies a flat above the business premises and one quarter of the rates relate to this flat.
4. Office equipment is being depreciated at 20% per annum on cost.
5. Motor vehicles are being depreciated at 20% per annum using the reducing balance method.
6. The provision for doubtful debts is to be maintained at 2% of the trade receivables.
a. Prepare the income statement for the year ended 31 January 20–1.
b. Prepare the statement of financial position at 31 January 20–1.
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