L 2cil) Beech Plc. bought a new vehicle during the year costing 20,000 and has decided to depreciate it at 30% using the Reducing Balance method. Calculate the entries in the Statement of Financial position and income statement for the equipment at the end of year 2 of ownership. Complete the table below: Income Statement 4 marks Statement of Financial Position Yearly charge Historic Cost Accumulated Depreciation Net Book Value 2ciii) Suggest why Beech has decided to use the reducing balance method (and NOT the straight-line method) to depreciate the vehicle? (type in this box) 2 marks 2d) Explain why companies need to follow accounting rules. (type in this box) 2 marks 2e) Explain what is meant by the following accounting conventions (rules) and give an example 1) Business Entity Convention (type in this box) H) Accruals Convention (type in this box) 8 marks iii) Materiality Convention (type in this box) iv) Prudence Convention (type in this box) Present Value of 1 Discount table At rate 'r' 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Period (after n years) 1 0.900 0.980 0.971 2 0.980 0.961 0.982 0.043 0.925 0.907 0.952 0.943 0.935 0.800 0.873 0.928 0.917 0.909 0.857 0.842 0.820 3 0.971 0.942 0.915 0.889 0.864 0.840 0.810 0.704 0.772 0.751 0.901 0.924 0.888 0.855 0.823 0.792 0.783 0.735 0.708 0.683 0.951 0.900 0.863 0.822 0.784 0.747 0.713 0.081 0.650 0.021 6 0.942 0.888 0.837 0.790 0.740 0.705 0.000 0.630 0.598 0.564 7 0.933 0.871 0.813 0.780 0.711 0.923 0.853 0.789 0.731 0.677 0.914 0.837 0.700 0.703 0.665 0.623 0.583 0.627 0.582 0.540 0.645 0.592 0.544 0.500 0.460 0.547 0.513 0.502 0.467 0.424