Anika owns property which she rents out to university students. She has made a consistent profit for each year she has been in business. Her trial balance at 31 August 2022 was as follows. Debit Credit $ $ Capital 400 000 Rent receivable 162000 General expenses 26 500 Bank 39400 Rates 38200 Insurance 12400 Repairs 32000 Drawings 18500 Non-current assets at cost Premises 418000 Fittings 90000 Provision for depreciation of non-current assets Premises 42000 Fittings 71000 675000 675000 Additional information 1 At 31 August 2022, rent received of $8100 has been paid in advance. 2 At 31 August 2022, general expenses of $1300 have been paid in advance and rates of $3400 were owing. 3 The insurance includes $1800 paid for the 15 month period ending 30 November 2022. 4 Expenditure of $9000 for new fittings has been recorded in repairs. 5 Depreciation is to be provided as follows: Premises by equal instalments on cost each year over a 50 year period Fittings 20% per annum by the reducing balance method A full year's depreciation is charged on fittings during the year of purchase.

1. (a)Prepare the income statement of Anika for the year ended 31 August 2022. Anika Income Statement for the year ended 31 August 2022 $ Workings:[9]
2. (b)Prepare the capital account for the year ended 31 August 2022 showing the balance brought down at 1 September 2022. Anika Capital account Date Details $ Date Details $[3]
3. (c)Advise Anika on her plans and whether she should provide her own additional capital or form a partnership with Janos. Justify your answer.[5]
4. (d)Explain to Anika the difference between capital expenditure and revenue expenditure. Why is this difference between the two important when preparing the financial statements?[3]