Income and Expenditure Account for the year ended 31st March 2005:

Income:
- Sales: $50,000
- Interest received: $2,500
- Rent received: $5,000
Total Income: $57,500

Expenditure:
- Cost of goods sold: $20,000
- Salaries and wages: $10,000
- Rent paid: $3,000
- Insurance: $1,500
- Advertising: $2,000
- Depreciation: $1,000
- Miscellaneous expenses: $1,500
Total Expenditure: $39,000

Net Income: $18,500

Balance Sheet as at 31st March 2005:

Liabilities:
- Capital: $50,000
- Bank loan: $10,000
Total Liabilities: $60,000

Assets:
- Cash: $5,000
- Debtors: $7,500
- Stock: $8,000
- Furniture and fixtures: $6,000
- Land and buildings: $33,500
Total Assets: $60,000

Explanation:
The income and expenditure account for the year ended 31st March 2005 shows the company's revenue and expenses during the period. The total income for the year was $57,500, which is made up of sales, interest received, and rent received. The company's total expenses for the year were $39,000, which includes the cost of goods sold, salaries and wages, rent paid, insurance, advertising, depreciation, and miscellaneous expenses. The net income for the year was $18,500.

The balance sheet as at 31st March 2005 shows the company's financial position at the end of the period. The total liabilities of the company were $60,000, which includes the capital of $50,000 and bank loan of $10,000. The company's total assets were also $60,000, which includes cash, debtors, stock, furniture and fixtures, and land and buildings. The balance sheet shows that the company has a strong financial position with the assets and liabilities being equal.