Kellys current reporting date is 31 December 2019. The financial statements of Kelly will probably be approved by the owner on 28 February 2020 for distribution. On 31 December 2019, the following balances, amongst others, appeared in the accounting records of Kelly:

Delivery vehicles: at cost price P70 000(Dr) Accumulated depreciation (31/12/2018) P12 000(Cr)

Office supplies expense P50 200(Dr) Water and electricity P31 350(Dr) Insurance P4 200(Dr)

Rent expense P44 000(Dr) Sales P364 000(Cr) Cost of sales P260 000(Dr) Doubtful debts P10 450(Dr)

Inventories P32 900(Dr) Trade receivables P57 800(Dr) Negotiable certificate of deposit P80 000(Dr)

Rent prepaid on 31 December 2018 P4 000(Dr) Office supplies (31 December 2018) P3 800(Dr)

Insurance prepaid on 31 December 2018 P800(Dr) Bank loan P159 000(Cr) Trade payables P31 650(Cr)

Additional information and detail in respect of transactions and events which still must be recognized:

i) On 1 July 2019, a new delivery vehicle with a cost price of P40 000, which was ordered on 15 June 2019, was received and put into service. The new vehicle has already been appropriately recognized in the records. The vehicles are depreciated on a straight-line basis over the useful life of 5 years

ii) The annual property insurance premium, which was paid on 1 April 2019, amounted to P4 200. The full premium was debited to the insurance expense for 2019.

iii) The inventory system indicates that obsolete and damaged inventory items, with a cost of P4 200 on 31 December 2019 should be written off. The owner approved the write off which still must be recognized. On 28 December 2019, the owner took inventories with a cost of P3 500 for personal use. This transaction still must be recognized.

iv) On 1 March 2019, Kelly invested P80 000 in a negotiable certificate of deposit. The interest and the capital amount are received back in one amount on 28 February 2020. The interest rate is 8% per year, calculated on the simple interest rate method.

v) On 1 July 2017, Kelly received an amount of P150 000 on loan from the bank. The written loan agreement with the bank inter alia stipulates that the interest rate is 12% per year and that the interest and the primary debt are repayable in one amount on 30 June 2019. The interest is added at the end of every six months and the interest schedule is as follows:

Date Detail Interest at 12% per year Amortised cost of the loan

1 July 2017 Primary debt 150 000

31 Dec 2017 Interest 9 000 159 000

30 Jun 2018 Interest 9 540 168 540

31 Dec 2018 Interest 10 112 178 652

30 Jun 2019 Interest 10 719 189 372

39 371

vi) On 30 December 2019, Kelly sold goods to the amount of P11 200 on credit to trade receivable Oatty. The cost of these goods amounts to P8 000. This transaction still must be recognized. Kelly uses the perpetual inventory system.

REQUIRED:

Show the:

a) Statement of Profit and Loss and Other Comprehensive Income extract and;

b) Statement of Financial Position extract after accounting for the items in the notes.