Ignore VAT Magneto, an entity that sells solar lights, has supplied you with the information below and asked you to make the necessary adjustments and to prepare financial statements for the business in respect of the financial year ended 31 December 2020. LIST OF PRE-ADJUSTMENT BALANCES OF MAGNETO ON 31 DECEMBER 2020: Bank balance (unfavourable) Supplies Equipment at cost Land and buildings at cost (Land at cost, R800 000) | Accumulated depreciation: Buildings (01/01/2020) Investment (12% p.a) Long term loan Capital (01/01/2020) Drawings Inventory (01/01/2020) Accounts receivable Allowance for doubtful debts (01/01/2020) Accounts payable Sales Rent Income Purchases Carriage on purchases Returns inwards Returns outwards Salaries expense Advertising expense Repairs and maintenance expense Rates expense Telephone expense Interest expense Additional information: Rand 128 820 25 800 300 000 1 500 000 250 110 80 000 65 000 880 000 98 450 88 100 43 680 1 110 89 370 1 500 400 32 500 650 220 22 450 6 450 1570 65 500 9 600 3 790 39 190 12 400 3 250 1. The business uses the periodic method for accounting for inventory and a gross profit percentage of 20% is used. 2. During the year, the owner took inventory for personal use, with a selling price of R5 400. This transaction has not yet been recorded in the records of the business.