J Donegal, a sole proprietor, presents his trial balance for year ended 31% December 2020: E Sales 205,700 Purchases 104,580 Plant and equipment (cost) 90,000 Vehicles (cost) 62,000 Inventory (1-1-20) 48,600 Provision for depreciation (1-1-20): Plant and equipment 27,000 Vehicles 40,000 Returns in 700 Carriage in 400 Wages 37,000 Rent 15,000 Heat and light 6,000 Irrecoverable debts 1,500 Specific allowance for receivables 800 Receivables 42,000 Payables 29,600 Rent owing (1-1-20) 2,000 Marketing expenses 3,000 Fuel and vehicle maintenance 6,000 15% Loan 80,000 Drawings 19,000 Bank 15,000 Capital (1-1-20) 35,680 435,780 435,780 Notes: 1) Inventory valued at 51,200 on 31st December 2020 2) Depreciation charged at 10% straight line on plant and equipment and 50% reducing balance on vehicles 3) Rental charge is for 15 months to 31st January 2021 4) The heating and lighting bill has been paid up to 31st October 2020. The charge accrues evenly through the year 5) Donegal pays 500 per month for vehicle fuel and maintenance costs. However, the business possesses an unpaid bill at 31st December 2020 from Ulster Garages Ltd for 1,500 for additional work required. Donegal accepts the charge is due for payment. 6) Donegal is fairly certain that 1,200 of receivables are unlikely to be paid V1 2021 2021 Northern Consortium Ltd. Page 2 of 6 IDBFN001 Financial Accounting 1 7) During the year Donegal disposed of an item of plant, purchased in 2018 for 10,000, for 6,000 (no depreciation in year of sale). This transaction has not been recorded in the books of account 8) Commission of 1% on net sales is due to be paid to an agent. This should be treated as a marketing expense. Required: (a) Prepare Donegal's statement of profit or loss for year ended 31st December 2020 and a statement of financial position as at that date. [25]