& Footer Watermal Question 1 The following trial balance has been extracted from the books of Cyrenaica Ltd at 31 December 2020: DR CR E 500,500 6,534 4,800 Purchases Allowance for receivables debts at 31 December 2019 Irrecoverable debts Revenue (sales) Authorised and issued ordinary share capital (1) Retained earnings at 31 December 2019 Administrative expenses Salaries 759,255 75,000 29,184 23,021 83,984 23,560 64,875 43,443 60.642 19,341 Rent Receivable Payable Inventory as at 31 December 2019 Bank overdraft Dividend paid Equipment at cost Accumulated depreciation on equipment at 31 December 2019 Vehicles at cost Accumulated depreciation on vehicles at 31 December 2019 21,000 57.750 9.375 127 500 25,500 967.632 967632 You are given the following additional information: Local backup (1) A further adjustment is required in respect of receivables as an amount due from Alex Peng of 915 needs to be written off. (ii) The company has a policy to include an allowance for receivables debts of 15% of the year-end receivables. (iii) 2,470 was prepaid for rent. (iv) Salaries owed but not yet paid, 4,500. (v) Equipment is depreciated at 20% per annum on a straight-line basis and motor vehicles at 25% using the reducing balance method. Na depreciation has yet been charged for the year ended 31 December 2020. All depreciation should be charged to administrative expenses. (vi) The year-end bank reconciliation identified that a cash receipt from Terry Danial of 6,800, in respect of a credit sale had been omitted from the cashbook in error (vii) The net realisable value of inventory at 31 December 2020 was 6,700 less than its cost of 34.400. (vill) Cyrenaica Ltd began renting an additional storage unit on 1 October 2020 at a cost of 500 per month. No payment has been made to date (ix) Corporation tax of 15, 200 is to be provided on profits for the year REQUIRED: (a) Prepare a statement of profit or loss for Cyrenaica Ltd for the year ended 31 December 2020 (10 marks) (6) Prepare a statement of financial position for Cyrenaica Lid as at 31 December 2020 (10 marks) (c) Define the accruals concept (matching concept), and explain how it impacts the recording of transactions in the financial statements of an organisation. Provide examples as appropriate, to aide your explanations. (5 marks) (150 words) (Total 25 marks) & Footer Watermal Question 1 The following trial balance has been extracted from the books of Cyrenaica Ltd at 31 December 2020: DR CR E 500,500 6,534 4,800 Purchases Allowance for receivables debts at 31 December 2019 Irrecoverable debts Revenue (sales) Authorised and issued ordinary share capital (1) Retained earnings at 31 December 2019 Administrative expenses Salaries 759,255 75,000 29,184 23,021 83,984 23,560 64,875 43,443 60.642 19,341 Rent Receivable Payable Inventory as at 31 December 2019 Bank overdraft Dividend paid Equipment at cost Accumulated depreciation on equipment at 31 December 2019 Vehicles at cost Accumulated depreciation on vehicles at 31 December 2019 21,000 57.750 9.375 127 500 25,500 967.632 967632 You are given the following additional information: Local backup (1) A further adjustment is required in respect of receivables as an amount due from Alex Peng of 915 needs to be written off. (ii) The company has a policy to include an allowance for receivables debts of 15% of the year-end receivables. (iii) 2,470 was prepaid for rent. (iv) Salaries owed but not yet paid, 4,500. (v) Equipment is depreciated at 20% per annum on a straight-line basis and motor vehicles at 25% using the reducing balance method. Na depreciation has yet been charged for the year ended 31 December 2020. All depreciation should be charged to administrative expenses. (vi) The year-end bank reconciliation identified that a cash receipt from Terry Danial of 6,800, in respect of a credit sale had been omitted from the cashbook in error (vii) The net realisable value of inventory at 31 December 2020 was 6,700 less than its cost of 34.400. (vill) Cyrenaica Ltd began renting an additional storage unit on 1 October 2020 at a cost of 500 per month. No payment has been made to date (ix) Corporation tax of 15, 200 is to be provided on profits for the year REQUIRED: (a) Prepare a statement of profit or loss for Cyrenaica Ltd for the year ended 31 December 2020 (10 marks) (6) Prepare a statement of financial position for Cyrenaica Lid as at 31 December 2020 (10 marks) (c) Define the accruals concept (matching concept), and explain how it impacts the recording of transactions in the financial statements of an organisation. Provide examples as appropriate, to aide your explanations. (5 marks) (150 words) (Total 25 marks)