Monica Ventures

The following trial balance was extracted from the books of Monica Ventures, a spare parts merchant, at the close of business on 31 December 2020

Trial Balance
Capital				30,000
Purchases		111,000
Sales Revenue				190,000
Trade payable				5,000
Trade receivable		20,000
Discount allowed		1800
Carriage outwards		930
Drawings		15,000
Rent & Rates		11,000
Heating and Lighting		5,570
Salaries and wages		35,000
Cash in hand		4000
Bank				1,200
Inventory 1/1/2020		6,700
Delivery van		10,000
Motor running cost		700
Shop f ittings at cost		9,000
Accumulated depreciation, Delivery Van ,1/1/2020				3,000
Accumulated depreciation, shop f ittings ,1/1/2020				1,500
	230,700		230,700

Additional Information

1. Inventory at 31 December 2020 was 3,400
2. Monica took out spare parts costing 500 for the repair of her private car. No payment was made for these goods
3. Rent prepaid at 31 December 2020 was 1,200
4. Motor running expenses owing at 31 December 2020 was 90
5. Provide for depreciation at 31 Dec 2020 as follows: Delivery Van 25% on the reducing balance basis and Shop fittings 20% on the straight-line basis

Required:

1. Draw up Monica Ventures income statement for the year ended 31December2020 [25 marks]
2. Draw up Monica statement of financial position as at 31 December 2020
3. In one sentence, state the effect of accruals on income statement and statement of financial position [2+2 = 4marks]
4. In one sentence, state the effect of prepayments on income statement and statement of financial position [2+2= 4marks]