Instructions:

1) This paper consists of one question with two parts.

2) You are required to do both parts (a) and (b) of the question.

Part a Profit and Loss Account -30 marks

Part b Balance Sheet -20 Marks

DETAILS	DR	CR
Capital		635,000
Drawings	25,000
10% Loan		300,000
Building Repairs	20,500
Commission Received		35,000
Opening Stock	36,000
Insurance	21,000
Bad Debts	3,500
Sales		1,240,000
Wages and Salaries	92,500
Discounts	7,200	12,000
Loan Interest	30,000
Creditors		35,000
Returns	9,400	4,500
Rent Received		65,000
Purchases	920,000
Debtors	52,000
Provision for Bad Debts		6,200
Telephone Charges	22,400
Bank		65,000
Cash	12,200
Land and Building	740,000
Provision for Depreciation on Building		74,000
Motor Vehicle	300,000
Provision for Depreciation on Motor Vehicle		45,000
Machinery and Equipment	250,000
Provision for Depreciation on Machinery & Equipment		25,000
	2,541,700	2,541,700

The following trial balance was obtained from the books of Bello as at December 31, 2021 :

Additional notes:

a. Stock at year end was valued at $58,000.

b. Wages is owing by $6,700.

c. Insurance is prepaid by $2,600.

d. During the year Bello took goods values at $15,000. This amount was considered to be material and was not yet recorded.

e. The rent received is prepaid by $6,000.

f. Commission is owing by $4,350.

g. The provision for bad debts is to be adjusted to 10% of debtors.

h. Depreciation charges are to be applied as follows:

ASSET RATE METHOD

Land and Building 10% Straight Line

Motor Vehicle 15% Reducing Balance

Machinery and Equipment 5% Reducing Balance

Required

Prepare the following:

a) The Statement of Profit and Loss for the year ending December 31, 2021. (30 Marks)

b) The Statement of Financial Position as at December 31, 2021. (20 Marks)