Janet started a green grocers business on 1 January 2012. She started business with a bank balance..

Janet started a green grocers business on 1 January 2012. She started business with a bank balance of sh 200,000, which represented his entire savings. Most major cost of expenditure were paid by cheque, including all daily market purchases of produce and other supplies. Some other expenses were paid out of cash takings, and the balance of cash receipts were banked once a week. No accurate record of daily cash takings was kept but receipts were kept for all cash payments and for personal cash withdrawals.

Information obtained from her was summarized as follows:

Summary of cash payments:

Sh

Assistant’s wages 72,000

Delivery van expenses24,800

Cleaning and sundries8,400

Purchase of milk,butter and eggs for resale 84,960

Advertising 6,400

Postage and stationery 3,720

Personal drawings 96,000

There was a cash float of sh 1,600 as at 31 December 2012 Summary of bank account:

	Sh	Sh
1 January 2012 cash introduced		200,000
31 December cash lodgements for the year from the shop		1,928,640
Delivery van purchased	128,000
Purchase of goods	1,225,360
Van running expenses	37,880
Insurance	2,600
Light and heat	25,200
Rent and rates	84,800
Personal drawings	137,800
Telephone	16,400
Advertising	43,300
Postage and stationery	17,260
Shop fittings	72,000
Balance as at 31 December 2012	338,040 .

2,128,640 2,128,640

The following additional information was established:

1. The value of the year-end stock was sh 47,000

2. Supplier’s invoices showing sh 17,240 were unpaid at the end of the year for trade purchases and a further sh 1,780 unpaid for motor expenses

3. The amount owing by customers was sh 3,280

4. Delivery van and shop fittings were to be depreciated using straight line method over four and ten years respectively Required:

i)	Income statement for the year ended 31 December 2012	(12 marks )
ii)	Statement of financial position as at 31 December 2012	(8 marks )