Accounting for Financial Decision Making-ACF1000(1) SECTION A Section A consists of TWO (2) questions which are COMPULSORY. Answer Questions 1 and 2. Question 1 125 marks] You have been asked to help prepare the financial statements of Pravina, a sole trader. Pravina's list of balances at 30 September 2020 is shown below. Pravina-Trial Balance at 30 September 2020 Property-Cost (note 2) Equipment-Cost (note 2) Rs. 2,000,000 Property - Accumulated depreciation @1 October 2019 320,000 360,000 Equipment Accumulated depreciation 1 October 2019 195,000 Long term investment cost 20,000 Inventory-1 October 2019 585,000 Receivables 900,000 10% Bank loan (note 4) 480,000 Allowance for impairment of receivables @1 October 2019 (note 3) 75,000 Sales 5,400,000 Purchases 3.800.000 Returns inwards Sestas betur 270,000 Returns outwards Pumases return. 185,000 Carriage inwards Carriage outwards Printing and stationery Ev Staff salaries Irrecoverable debts 35,000 48,000 180,000 820,000 42,000 Interest paid on Bank loan Interest received on long term investment Loss on disposal of equipment 36,000 1,000 7,000 Other operating expenses Accounts payable T Drawings Bank a/c Owner's capital 1 October 2019 Page 1 of 6 170,000 870,000 180,000 9,000 1,936,000 Accounting for Financial Decision Making- ACF1000(1) The following additional information is provided: 4. uired: 1. The cost of Inventory at 30 September 2020 was Rs.610,000. This total included some goods costing Rs35,000 which were damaged in storage. It is thought that they can be sold for Rs.23,000 after incurring additional costs of Rs7,000. Depreciation on Property and Equipment is provided on cost at 2% and 25% respectively. A full year's depreciation is charged in the year of acquisition and none in the year of disposal. The allowance for the impairment of receivables is to be made equal to 5% of the year-end balance on the receivables control account. The bank loan was taken out on 1 October 2019. Capital is repayable in 10 equal annual instalments. Prepare Pravina's income statement for the year ending 30 September 2020 and [16 marks] A Statement of Financial Position for Pravina as at 30 September 2020. [9 marks] Accounting for Financial Decision Making-ACF1000(1) Question 2 125 marks] Medi Lid manufactures and sells a single product for Rs 100 and the incurs the following variable costs Labour Materials 32 16