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:

  1. Prepare an income statement for the year ended 31 December 2019 for Polaris Resources.
  2. Prepare a balance sheet as at 31 December 2019 for Polaris Resources.

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