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

TRIAL BALANCE AS AT 31 MAY 20X6 TB AJE

Dr Cr Dr Cr
$ $
Sales 138,000 5,000
Purchases 82,350
Carriage 5,150
Drawings 7,800
Prepayment for insurance 5,000 880
Postage and stationery 3,000
Advertising 1,330
Salaries and wages 26,420
Irrecoverable debts 880
Allowance for receivables 130 40
Receivables 12,120
Payables 6,400
Cash on hand 200
Cash at bank 1,000
Inventory as at 1 June 20X5 11,000
Equipment at cost 58,000
Accumulated depreciation 19,000 5,000
Capital 50,720
Rent Expense 210
Accruals 210
Insurance expense 880
Depreciation expense 5,000
Bad debt expense 40
Unearned revenue 5,000
214,250 214,250 11,130 11,130

The following additional information as at 31 May 20X6 is available.

1 Rent is accrued by $210.
2 Insurance expense is $880.
3 $5,150 of carriage represents carriage inwards on purchases.
4 Useful life of Equipment 10 years. Salvage value is 8,000. The depreciation has not been calculated.
5 The allowance for receivables is to be increased by $40.
6 Inventory at the close of business has been valued at $13,551.
7. Out of total sales 5,000 are unearned

Required
(a) Prepare a statement of profit or loss for the year ended 31 May 20X6
(b) Prepare a statement of financial position as at that date.
 Adjusted TB
Dr Cr
SOPL
133,000 Revenue 133,000
82,350 Op. Inv 11,000
5,150 CoS Purchases 87,500 -84,949
7,800 Closing -13,551
4,120 Gross Profit 48,051
3,000 G&A Expenses
1,330 - Postage and Stat -3,000
26,420 - Advert -1,330
880 - Salaries -26,420
170 - Irrec debts -880
12,120 - Bad Debts -40
6,400 - Depreciation -5,000
200 - Rent exp -210
1,000 - Insurance Exp -880
11,000 Net Profit 10,291
58,000
24,000
50,720
210
210
880
5,000
40
5,000
219,500 219,500

een calculated.
SOFP
Assets
Non current assets
Equipment 34,000

Current assets
Cash 1,200
Prepayments 4,120
Receivables 11,950
Inventory 13,551

Total Assets 64,821

Liabilities
Current liabilities
Payables 6,400
Accruals 210
Unearned revenue 5,000

Total Liabilities 11,610

Equity
Capital 50,720
Drawings -7,800
Profit 10,291

Total Equity 53,211

Total Liability and Equity 64,821