Freds Fries is a catering business. The business has reached the end of its third year of trading and Fred has asked his sister, Dora, to help him to produce some accounts. She has been writing up his books throughout the year and these have been kept correctly. Unfortunately, Dora had an accident and was admitted to hospital just before she started work on the financial statements for the year ended 30 April 20X1. Fred remembers that you have been taking an accounting course and asks you to help him out. Doras latest trial balance contained the following items: leaseholds shop premises (cost 1.5.X0) 300,000 Accumulated Depreciation on lease (1.5.X0) 60,000 Fixtures and fittings (cost 1.5.X0) 80,000 Accumulated Depreciation on fixtures and fittings (1.5.X0) 16,000 Inventory ( 30.4.X0) 1,000 Receivables (30.4.X1) 22,500 Prepaid Insurance 25,000 Payables (30.4.X1) 18,000 Unearned Sales 5,000 Loan secured on Fred's house 175,000 Balance per cash book (30.4.X1) 14,500 Capital (1.5.X0) 124,000 Sales 123,000 Purchases 57,000 Salaries & Wages 10,000 Electricity 6,000 Sundry Expenses 5,000 You also discover the following additional information which needs to be reflected in the yearend accounts: 1. Fixtures and fittings which cost 12,000 with accumulated depreciation of 6,000 were sold for 3,000 just before the end of the year. This transaction has not yet been reflected in the books. 2. Fixtures and fittings are to be depreciated on a straight-line basis over five years and are expected to have zero scrap value. No depreciation is charged in the year of disposal. 3. Bad debts of 4,000 need to be written off. A provision of two percent is to be made on the remaining debts. 4. The leasehold property is to be amortized by 5 percent per year using the decreasing balance method. (Amortization means depreciation for intangible assets). 5. Provision is to be made for the audit fee of 300. 6. Salaries of $400 were unpaid. 7. Unearned sales of $1,000 were earned prior to yearend. 8. The mortgage interest rate is 5% per year. Full-year interest is not paid. 9. Three months insurance expenses for the rate of 500 per month werent charged to the profit & loss statement during the year. 10. Beginning of the year, Fred Injected 25,000 of his own personal funds. Later on the year, he withdrew 5,000 for his personal use. 11. Inventory at 30 April 20X1 was valued at 2,000 Required a. Journalize the adjusting entries for the year ended 30 April 20X1 (25 Marks) b. Prepare an income statement for the year ended 30 April 20X1 (10 Marks) c. Prepare a statement of financial position as at 30 April 20X1, for Freds Fries. Assume that the loan secured on Freds house is a long-term liability. (12 Marks) d. Explain clearly what is meant by: (i) Prudence; (ii)Going concern.