21.28A (2) 2020, and a balance sheet as at that date. December The following trial balance was extracted from the books of Peter Mackie on 30 April 2020. From it, and the note below it, prepare his income statement for the year ending 30 April Sales Purchases Inventory 1 May 2019 Carriage outwards Note: Carriage inwards Motor Vehicles: accumulated depreciation Fixtures and Fittings: accumulated depreciation Returns inwards Returns outwards Salaries and wages Motor expenses Rent Sundry expenses Motor vehicles Fixtures and fittings Accounts receivable Accounts payable Cash at bank Cash in hand Drawings Capital Dr Cr E E 26,200 16,450 2,266 534 295 3,800 240 670 392 2,692 729 843 1,390 7,600 800 4,965 3,277 1,648 150 8,400 15,523 49,432 49,432 Closing inventory amounted to 2,860. Depreciation is to be charged at rates of 10 per cent on cost for fixtures and fittings and 25 per cent on cost for motor vehicles. Bad debts of 365 are to be written off. Part 5 Adjustments for (b) Peter has indicated that he thinks that the accounts receivable amounts that have been written off will be paid eventually. He is also querying why adjustments are made in the financial state- ments for bad debts and depreciation. Write a short note to him, making appropriate references to accounting concepts, outlining why these adjustments are made. 21.29 On 1 April 2016 a business purchased a machine costing 112,000. The machine can be