Adam Mullings is a retailer who had not kept a full set of accounting records. The following is a summary of her bank transactions in her cash book for the year ended December 31, 2020 Receipts Payments Details Details S Trade Receivables 1,38,500 Trade payables 745.540 Cash sales 950.080 Rent 312.000 Loan 300,000 Electricity 40,720 Loan principal 100,000 Water 13,780 Salary 613,600 Accounting fee (2019) 32.000 Telephone 23.080 Computer equipment 300.000 Drawings 4,000 Cash purchases 301.440 2.634 580 2.486.160 1 2 3 You are given the following additional information: Favourable bank balance per cash book on January 1, 2020 amounting to S106,920 During the financial year discounts allowed by trade payables amounted to $440 and those allowed to trade receivables $800 During the financial year goods retumed by trade receivable amounted 10 S1,600 and goods returned to trade payables amounted to 56,900. During the financial year a trade debt of $1.200 ewed by Lottie Graham was off-set against the $2,000 owing to the same Lottie Graham a trade creditor Janct Hutton, a cash sales customer returned goods during the financial year amounting to S700. Janet Hutton was repaid her $700 from the daily cash sales Adam Mullings grants a credit period of 30 days to trade receivables. The closing trade receivables balance includes a debt of 800 from Fanon Browning. The goods were sold to Fanon in November 2019. Fanon went to the United States of America for a two (2) weeks' vacation in February 2020. On December 31, 2020 Fanon was still in the USA The amount of cash received from casi sales were all paid into the bank with the exception of: $2,800 Plumbing repairs 54,000 Donation to community Christmas party 8 Adam Mullings keeps a cash float of $10,000 for change in his retail outlet. 9 Adam Mullings agreed to pay his daughter Virginia, a commission of 5% of the net profit after charging such commission, for working in the retail outlet on Sundays. (Round to the nearest dollar) 10 The computer equipment was purchased on April 9, 2020. Depreciation should be calculated on the computer equipment on the straight line basis at a rate of 20% per annum on cost. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal. 11 The accounting fee for preparing the 2020 financial statements is estimated at $35,200. 12 During the year, Adam Mullings puts a further $135,000 into the bank account of the business to shore up working capital. 13 On April 1, 2020 Adam Mullings received a loan of S300,000 from his mother Mara Mullings. Interest should be charged on the reducing balance at a rate of 10% per annum. The first interest payment is to be made on March 31, 2021. The principal is being paid in equal instalments of $100,000 on September 30, 2021, September 30, 2022 and September 30, 2023 14 December 31, 2019 December 31, 2020 Inventory 138,400 77,300 Furniture (at cost) 100,000 100,000 Allowance for depreciation - 30,000 40,000 furniture Trade receivables 6,900 2,360 Trade payables 1,420 5,200 Rent paid in advance 24,000 Electricity owing 3,500 3,660 f) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2020. (25 marks) g) Prepare a Statement of Cash Flow for the year ended 31 December, 2020 (25 marks) Adam Mullings is a retailer who had not kept a full set of accounting records. The following is a summary of her bank transactions in her cash book for the year ended December 31, 2020 Receipts Payments Details Details S Trade Receivables 1,38,500 Trade payables 745.540 Cash sales 950.080 Rent 312.000 Loan 300,000 Electricity 40,720 Loan principal 100,000 Water 13,780 Salary 613,600 Accounting fee (2019) 32.000 Telephone 23.080 Computer equipment 300.000 Drawings 4,000 Cash purchases 301.440 2.634 580 2.486.160 1 2 3 You are given the following additional information: Favourable bank balance per cash book on January 1, 2020 amounting to S106,920 During the financial year discounts allowed by trade payables amounted to $440 and those allowed to trade receivables $800 During the financial year goods retumed by trade receivable amounted 10 S1,600 and goods returned to trade payables amounted to 56,900. During the financial year a trade debt of $1.200 ewed by Lottie Graham was off-set against the $2,000 owing to the same Lottie Graham a trade creditor Janct Hutton, a cash sales customer returned goods during the financial year amounting to S700. Janet Hutton was repaid her $700 from the daily cash sales Adam Mullings grants a credit period of 30 days to trade receivables. The closing trade receivables balance includes a debt of 800 from Fanon Browning. The goods were sold to Fanon in November 2019. Fanon went to the United States of America for a two (2) weeks' vacation in February 2020. On December 31, 2020 Fanon was still in the USA The amount of cash received from casi sales were all paid into the bank with the exception of: $2,800 Plumbing repairs 54,000 Donation to community Christmas party 8 Adam Mullings keeps a cash float of $10,000 for change in his retail outlet. 9 Adam Mullings agreed to pay his daughter Virginia, a commission of 5% of the net profit after charging such commission, for working in the retail outlet on Sundays. (Round to the nearest dollar) 10 The computer equipment was purchased on April 9, 2020. Depreciation should be calculated on the computer equipment on the straight line basis at a rate of 20% per annum on cost. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal. 11 The accounting fee for preparing the 2020 financial statements is estimated at $35,200. 12 During the year, Adam Mullings puts a further $135,000 into the bank account of the business to shore up working capital. 13 On April 1, 2020 Adam Mullings received a loan of S300,000 from his mother Mara Mullings. Interest should be charged on the reducing balance at a rate of 10% per annum. The first interest payment is to be made on March 31, 2021. The principal is being paid in equal instalments of $100,000 on September 30, 2021, September 30, 2022 and September 30, 2023 14 December 31, 2019 December 31, 2020 Inventory 138,400 77,300 Furniture (at cost) 100,000 100,000 Allowance for depreciation - 30,000 40,000 furniture Trade receivables 6,900 2,360 Trade payables 1,420 5,200 Rent paid in advance 24,000 Electricity owing 3,500 3,660 f) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2020. (25 marks) g) Prepare a Statement of Cash Flow for the year ended 31 December, 2020 (25 marks)