Notes i) Big Time provides for depreciation on equipment at 20% on a reducing balance basis. This should be recorded in production expenses.

ii) The motor vehicles were bought two years ago. The residual value is 30,000 and depreciation is charged at 20% on a straight-line basis. This should be recorded in distribution expenses.

iii) Big Time has decided that the doubtful debt provision should be set at 2% of the value of the trade receivables at the year end.

iv) Additional storage space relating to the year ended 31 December 2022 is estimated at 5,000. No bill has yet been received. Costs should be recorded in administration expenses

v) Inventory at 31 December 2022 is valued at 145,240

(a) Prepare the journals to record the adjustments needed for items (i) to (v) above.

(b) Prepare the statement of profit or loss for the year ended 31 December 2022.

Big Time Limited manufactures office desks and chairs. The trial balance at 31 December 2022 was as follows