1 Mr. and Mrs. Sharma run a small private company selling swimwear from China. Mr. Sharma has asked you to prepare set of financial statement for the year ended 31 December 2020 as soon as possible as the previous accountant left the company at very short notice. Dr Cr E Audit and Accountancy 500 Advertising 900 Bank 1,500 Creditors 8.900 Long Term Bank Loan 2,200 Debtors 41,350 Directors remuneration 8,500 Electricity 2,800 Insurance 1,700 Fixtures and Fittings At Cost 80,000 Accumulated depreciation (at 1.1.2020) 40,000 Motor Vehicle At Cost 25,000 Accumulated depreciation (at 1.1.2020) 1,350 Office expenses 5,700 Ordinary 1 shares (issued and fully paid) 20,000 Profit and loss account (at 1.1.2020) 13,200 Purchases 160.000 Rent and rates 7,500 Sales 285,000 Stock (at 1.1.2020) 14,000 Wages and salaries 21,000 Bank Interest 200 370,650 370,650 Additional Information: 1. Stock at 31 December 2020 valued at cost amounted to 18000. 2. Depreciation is to be provided on fixtures and fittings at 25% on cost 10% on reducing balance method for motor vehicle. 3. Provision is to be made for electricity for 250. 4. Insurance paid in advance at 31 December 2020 amounted to 400, Required 1. Prepare Income statement for the year ended 31st December 2020. (10Marks) (15 Marks) 2. Prepare Balance Sheet as at 31st December 2020. 3. Identify FIVE accounting concepts that have been applied in the preparation of financial Statements and explain their meaning (10 Marks)