1. Pauline is the owner of The Fabric Shop, a small business in Cardiff manufacturing fabrics. At 31 December 2019, Pauline's statement of financial position showed the following balances: Machinery at cost Accumulated depreciation thereon Inventory of materials Accounts receivable Accounts payable Prepaid insurance Accrued utilities (gas, electricity etc.) Provision for doubtful debts Capital Bank 2,500 650 500 750 250 300 150 75 2,675 250 REQUIRED Record the following transactions and adjustments for Pauline for the year ending 31 December 2020 using T accounts. Then prove your work by drawing up a trial balance. Note: Assume all cash transactions pass through the bank i.e. you do not need separate accounts for bank and cash. (a) Pauline increased her stock of materials by 1,200 during the year. All purchases of materials are made on credit. (b) Pauline's revenue was 12,000 from credit sales and 2,000 from cash sales. Unfortunately, one debtor owing 500 declared herself bankrupt; this debt was written off. During the year Pauline received 11,500 from debtors. (c) Pauline purchased a new sewing machine in cash for 1,000. This was a replacement for her old machine that was sold during the year for 200 cash. The book value of the old machine at the time of sale was 250 and accumulated depreciation thereon was 350. (d) Non-current assets are depreciated on a reducing balance basis at a rate of 20% with a full year's charge on purchases made during the year. (e) Bank payments for utilities over the year amount to 1,000. At the end of the year, a further 250 is due for services received during the last quarter. (f) The annual insurance premium of 1,200 (paid in full) covers the year to 31 March 2021. The amount of the prepayment is 400. (8) Pauline made herself a pair of curtains during the year which comprised 100 worth of material. (h) Pauline paid 900 to her creditors during the year. The discounts she received from suppliers on material purchases were 60. (i) Pauline wishes her year-end provision for doubtful debts to amount to 6% of closing debtors