The following is the Trial Balance for Polaris Resources as at 31 December 2019:
| Particulars | Debit | Credit |
| Accumulated depreciation-Equipment | $123,120 | |
| 5-year Bank Loan | $90,000 | |
| Capital | $180,000 | |
| Accounts Payable | $48,960 | |
| Sales | $1,031,400 | |
| Carriage Outwards | $4,320 | |
| Cash in Bank | $32,760 | |
| Accounts Receivable | $140,760 | |
| Drawings | $94,320 | |
| General expenses | $76,680 | |
| Equipment at cost | $410,400 | |
| Opening Stock | $81,000 | |
| Purchases | $334,440 | |
| Utilities | $95,040 | |
| Rental | $18,720 | |
| Repairs and maintenance | $16,200 | |
| Salaries | $160,560 | |
| Sales returns | $8,280 | |
| $1,473,480 | $1,473,480 |
Additional information not accounted for in the trial balance:
- The closing stock as at 31 December 2019 was valued at $71,070.
- As at 31 December 2019, salaries outstanding amounted to $3,830 and utilities is prepaid by $1,420.
- Bad debts of $4,100 is to be written off.
- Depreciation for Equipment is to be provided 10% per annum on cost using the straight line method.
Required:
- Prepare an income statement for the year ended 31 December 2019 for Polaris Resources.
- Prepare a balance sheet as at 31 December 2019 for Polaris Resources.
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