3. 4. 5. 6. a) 1. 2. 3. REQUIRED: All Using the pro-forma supplied reproduceboth company's financial statements (Profit and Loss Account for the year and year-end Balance Sheet) including a statement of accounting policiesused b) 1 At the year-and both companies owed suppliers $30,000 and both companies had $10,000 in the bank. Both companies made credit sales during the year of 120,000 units at $2 each. By the year-end both had received $140,000 from customers. Jekyll made no provision for doubtful debts and Hyde provided 10% of year end debtors. 2 Both companies bought similar plant at the start of the year for $210,000. Jekyll used straight line depreciation and estimates that such plant has a life of 10 years and a scrap value of $10,000 Hyde uses reducing balance depreciation at 20% Both companies spent $40,000 on marketing of which $30,000 was used specifically to establish branded products and enhance future sales. Jekyll has capitalised the $30,000 "branding" expenditure and charged no amortisation as they maintain that "the brand will be continually supported by future advertising expenditure and will not diminish in value". Hyde has charged all advertising as an expense. Both companies had paid their workforce $50,000 and at the year-end owed them a further $2,000 (2 weeks wages accrual). There were no other expenses or debts. There is no corporation tax in Utopia (obviously!). State on your audit opinion - do either set of accounts show a true and fair view? If not, why not? State, with reasons, whether your opinion would differ if these companies where required to follow international accounting standards. Be prepared to debate the issue of the lack of accounting standards in Utopia - do you think that preparers of accounts have too much discretion? Consider the various users of accounts and whether any of them would benefit if all accounts had to be prepared using the same accounting policies Presenting groups As directed, assume the role of the financial accountant of one of the companies and present the company's financial statements and explain, and justify, the key accounting policies you have used. Summarise what these accounts reveal about the financial performance and position of the company. Be prepared to assume the role of an auditor (operating in Utopia) and comment on the presentation of company accounts by the other financial accountant. State your opinion, with supportingeasons as to whetherthe accountsshowa true and fair view of the company's financiaperformancand position