Jimmy Cliff has prepared the following trial balance as at December 31, 2017 DETAILS Sales DR CR 615,000 Wages and Salaries Discount Allowed Loan Interest Creditors 68,000 6,200 15,000 50,500 Return Outwards 8,500 Rent Received 14,000 Purchases 310.200 Debtors 54.350 Provision for Bad Debts 3,200 Telephone Charges 12.000 Bank 79,300 Cash 18,200 Land and Building 220,000 Motor Vehicle 290,000 Provision for Depreciation on Motor Vehicle 24,000 Machinery and Equipment 132,000 Provision for Depreciation on Machinery & Equipment 13,200 Capital 250,000 Drawings 9,000 10% Loan 150,000 Building Repairs 30,000 Commission Received 50,000 Opening Stock 34,600 Insurance Office Supplies 21,500 36,650 1.257,700 1,257,700 Additional notes : a. The stock at the end of the year was valued at $64,000 b. The commission was prepaid by $3,000 c. The insurance was owing by $1500 d. The provision for bad debts is to be revised to 10% of the debtors e. Provide for depreciation as follows Machinery and Equipment Motor Vehicle 10% Reducing Balance 10% Straight Line Required: 1. Prepare the statement of profit and loss for the year ending December 31, 2017 as well as the statement of financial position as December 31, 2017. (40 marks) 2. Jimmy Cliff enquired why was there separate entries for Building Repairs as well as Land and Building in the books. His consultant, Cavette Francis pointed out that a capital expenditure and a revenue expenditure must be recorded separately. Briefly explain the terms Capital Expenditure and Revenue Expenditure (3 marks) 3. Jimmy Cliff was presented with the following business proposal Join forces with Perry Henzell and Carl Bradshaw, and convert the business into a partnership to be called The Harder They Come. With this conversion the members would be guided by the Partnership Act and the Partnership Deed a. State two advantages and two disadvantages of a partnership when compared to a sole trader (4 marks) b. Briefly explain the Partnership Act and the Partnership Deed