During the year ended 30 December 2019 Halan had sales of RM260,040. Inventory levels have remained relatively consistent over the years, the starting inventory being RM21,500 and the closing inventory RM22,500. Halan has two admin staffs to assist and the total of wages for the year only RM24,500.

Even though she is not able to open her boutique during MCO, still the local council required her to pay for the business rates. She has paid a total of RM7,500 but there is a high possibility that she will have to pay a further RM2,450.

For the imports materials from South Korea, it is necessary to pay all of the flight costs. These amounted to RM5,200 over the year. She delivers all of her invoices to her agents and distributors in person and is paid promptly, with the exception of one debtor who owes RM2,000 and who has been declared bankrupt. This amount is to be written off. Halan has to make advertising of her designed shirts, blouses etc through Facebook, Instagram and websites. She has to pay RM20 per week for the costs of advertising throughout social media.

Insurance of RM3,500 has been paid, but RM650 of this relates to the year ending 31 December 2019. Electricity bills amounted to RM2,900, but the bill for the final quarter is still outstanding and is expected to be approximately RM500. Purchases of cloth from South Korea for the year are currently recorded as being RM65,000, but there is an outstanding bill of RM3,500 which is not yet included in that figure.

The factory and the machinery were bought at the same time and originally cost RM400,000. Depreciation has accumulated to the sum of RM100,000. The current year charge is 5 per cent on the reducing balance basis. The business had a computer which was purchased about three years ago and which Sandra calculates has about another two years of life left. It cost RM4,000 and Sandra uses the straight line method of calculating the depreciation charge. The computer will be worthless at the end of that time.

Stationery charges amounted to RM1,350 and she had telephone bills of RM3,500, RM200 of which relates to January and February 2020. In the year ending 31 December 2019, she had paid RM150 which related to telephone charges in the year ending 30 December 2019.

Halan has also bought RM5,000 for a gaming chair and high tech sound system installed at her house. She has enquired as to whether she can class this as a business expense as it has enabled her to relax after long days at the office.

Her salary for the year was RM50,000. Cash in hand at 31 December 2019 was RM600 which she borrowed from her sister temporarily on 31 December when she realised that there was no cash available to pay any expenses.

Required:

1. Generate and print out Profit & Loss Account as at 31 December 2019.
2. Generate and print out Balance Sheet as at 31 December 2019.
3. Explain the amount that appears in the title, as well as depreciation, whether it is expenditure or income (detailed analysis)