Maria is in business as a retailer. The following balances were extracted from her books on 30 September 2012. Capital at 1 October 2011 Drawings Land and buildings at cost Fixtures and fittings at cost Computer equipment at cost Provisions for depreciation: Land and buildings Fixtures and fittings Computer equipment 8% Bank loan repayable 31 December 2020 Loan interest paid Bank Trade receivables Trade payables Provision for doubtful debts Revenue Purchases Goods returned by customers Purchase returns Inventory at 1 October 2011 Delivery expenses Computer repairs expenses General running expenses Salaries and wages Marketing costs Discount allowed Discount received $ 180 000 21 000 150 000 28 000 40 000 10 000 19 000 12 000 50 000 2 000 14 070 Dr 60 000 31 000 6 400 365 000 135 000 8 900 4 250 33 500 18 630 19 150 31 600 86 700 14 000 22 400 7 300 Additional information 1 Inventory at 30 September 2012 was valued at $36 450. 2 An invoice for a credit purchase of goods, $7500, had been misplaced in December and no entries had been recorded in the books. 3 The purchase of fixtures and fittings, $4000, had been included in the general running expenses. 4 At 30 September 2012 computer repair expenses, $1700, were accrued and salaries and wages were prepaid, $5200. 5 The 8% bank loan was received on 1 January 2012. 6 Depreciation is to be charged on all non-current assets owned at the end of the year, as follows: (i) Buildings at the rate of 2% per annum using the straight-line method. No depreciation is charged on land. The land was valued at cost, $50 000. (ii) Fixtures and fittings at the rate of 15% per annum using the straight-line method. (iii) Computer equipment at the rate of 25% per annum using the diminishing (reducing) balance method. 7 A provision for doubtful debts is to be maintained on trade receivables. Debts up to 3 months old at the rate of 4%, debts over 3 months old at the rate of 8%. One-quarter of the trade receivables are over 3 months old. REQUIRED

1. (a)Prepare the income statement for the year ended 30 September 2012.[22]
2. (b)Prepare the balance sheet at 30 September 2012.[18]