Franco is in business as a sole trader. The following balances were extracted from his books on 31 January 2014. $ Land and buildings (cost) 150000, Fixtures and fittings (cost) 30000, Computer equipment (cost) 70000. Provisions for depreciation: Land and buildings 20000, Fixtures and fittings 13500, Computer equipment 34000. Disposal account 500 Cr. 8% Bank loan (repayable 30 April 2020) 100000. Bank 17430 Dr. Trade receivables 45000. Trade payables 37650. Provision for doubtful debts 1400. Revenue 362500. Purchases 172400. Returns inwards 7200. Returns outwards 8800. Inventory at 1 February 2013 17970. Distribution expenses 16300. Insurance 5900. Light and heat 7850. Wages and salaries 69500. Marketing expenses 31000. General expenses 9200. Commission received 11400. Drawings 20000. Capital 80000. Additional information at 31 January 2014 1 Inventory was valued at $15600. 2 Wages and salaries includes $15000 drawings by Franco. 3 Marketing expenses, $6750, were prepaid. 4 No interest had been paid on the bank loan. 5 Computer equipment costing $8000 was purchased by cheque on 25 January 2014. No entries had been made in the books. 6 Depreciation policy is as follows: (i) The buildings are depreciated at the rate of 2% per annum using the straight line method. Land and buildings consists of land, cost $50000, and buildings, cost $100000. No depreciation is charged on the land. (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 Trade receivables, $3000, were considered irrecoverable. A provision for doubtful debts of 5% is to be maintained. REQUIRED

1. (a)Prepare the income statement for the year ended 31 January 2014. Franco Income Statement for the year ended 31 January 2014[24]
2. (b)Prepare the statement of financial position at 31 January 2014. Franco Statement of Financial Position at 31 January 2014[16]