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Question $3$

The following list of balances was extracted from the books of C$.$ Radio, general

merchant, at $31$ December $2002.$

Advertising

Bad debts

First National Bank

Capital $($balance at $1$ Jan. $2002)$

Cash

Creditors

Customs duty on purchase

Debtors

Discount

Drawings

Fire and motor vehicle insurance

Furniture and fittings at cost

Accumulated depreciation on furniture and fittings at

$1$ January $2002$

Freight on purchases

General expenses

Motor vehicles at cost

Accumulated depreciation on vehicles at $1$ January $2002$

Motor vehicle expenses

Purchases

Provision for bad debts

Railage inwards

Railage outwards

Rent received

Returns inwards

Sales

Salaries and wages

Stationery

Stock at $1$ January $2002$

$8000$

$23150$

$240$

$2650$

$380$

$3500$

Adjustments:

A further amount of R$150$ is to be written off in respect of bad debts.

The provision for bad debts is to be made equal to $10\%$ of the outstanding

debtors.Depreciation is to be written off as follows:

Furniture and fittings: $10\%$ on cost$.$

Motor vehicles: $20\%$ on diminishing balance.

Stock that had cost R$1000$ was stolen from one of the firm's delivery vehicles

and no entry was made to account for it$.$

Wages due but not paid at $31$ December $2002$ amounted to R$200.$

The rent received amounts to R$800$ per month.

Stock at $31$ December $2002$ was R$21500.$

Required

$($a$)$ Show the income statement.

$($b$)$ Show the balance sheet.

$[20]$

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