a gross profit of 159.254. Rita has extracted the following balances from her accounting records in order to complete the statement of profit or loss:- Rent received Bad debts Operating expenses Wages 17,472 2,368 113,523 59,072 Fixtures and fittings cost 82,560 Motor van cost at 1 January 2021 57,600 Provision for depreciation Motor van at 1 January 2021 36,864 Trade receivables at 31 December 2021 25,925 Provision for doubtful debts at 1 January 2021 2,781 Rita has provided the following additional information: - 1. Included in closing inventory were goods which had cost 3,200. These have been damaged and will have to be scrapped. 2. Rita has taken goods for her own use from the business. The goods cost 2,742 and would have been sold for 3,840. 3. Rita sub-lets part of her premises to another business and she is owed 1,472 in rent 2021 Rita has provided the following additional information: - 1. Included in closing inventory were goods which had cost 3,200. These have been damaged and will have to be scrapped. 2. Rita has taken goods for her own use from the business. The goods cost 2,742 and would have been sold for 3,840. 3. Rita sub-lets part of her premises to another business and she is owed 1,472 in rent at 31 December 2021. 4. Included in the total, above, for operating expenses is 1,245 paid in respect of the year to 31 December 2022 and a payment of 16,000 for the purchase of fixtures. 5. Wages for the last week of December 2021 amounting to 1,136 had not been paid at 31 December 2021. 6. Rita sold the motor van on 30 April 2021. She received 14,560. She had purchased the van on 1 January 2019. It is her policy to depreciate the motor van using the reducing balance method at the rate of 25% per annum with a full year's depreciation charged in the year of acquisition and no depreciation charged in the year of disposal. 7. Fixtures and fittings are depreciated using the straight-line method at the rate of 10% per annum. 2 8. It is Rita's policy to maintain an allowance for doubtful debts of 8% of trade receivables. REQUIRED: Prepare a Statement of Profit or Loss, starting with gross profit, for Rita Tanner for the year ended 31st December 2021. (25 marks) Note: You are not required to prepare a Balance Sheet / Statement of Financial Position. QUESTION 2: Jacob sells car battery chargers to garages. During April 2022, the following transactions took place: - Date Purchases Sales 8 April 750 units @ 11.40 each 14 April 1,440 units 16 April 22 April 990 units @ 11.80 each 1,200 units Jacob sets his selling price so as to achieve a 20% gross profit. 8 April 750 units @ 11.40 each 14 April 1,440 units 16 April 22 April 990 units @ 11.80 each 1,200 units Jacob sets his selling price so as to achieve a 20% gross profit. Opening inventory at 1 April 2022, was 1,500 units which cost 16,200 in total. REQUIRED: a) Calculate the value of inventory at 30 April 2022 using the weighted average method. (7 marks) b) Prepare an extract from the income statement for the month ended 30 April 2022 showing gross profit (9 marks) c) Explain how the matching principle is applied to the valuation of inventories. (5 marks) d) Explain the circumstances in which inventories might be shown in the financial statements at a value different from their historical cost. I (4 marks) (Total 25 marks)