On April 2, 2020 Skyler White asked your accounting firm to prepare the relevant financial statements. She has agreed to pay you $50,000 for your services. Her policy is to pay for accounting services after the accounting work is completed. She gave your firm the following notes: . She is a medium size business owner with a retail business for tourist goods in Ocho Rios since 2014. Her financial year spans from April - March. She is yet to file her taxes for financial year 2018-2019 as her accountant migrated in April 2019 without putting together the financial statement or a trial balance. Skyler White received an estimate from the Tax Authority of Jamaica for her taxation expense her financial year, April 2018 March 2019, being $350,000. The tax authority has requested she files her financial statements within the next month to prevent any penalties. This is why she has approached your firm for assistance. . The following information was obtained from discussions you had with Skyler, the previous accountant's working papers, and other documents provided by Skyler: 1. Discounts allowed by trade creditors amounted to $310,000 and those allowed to trade debtors $550,000. Returns allowed by creditors was $720,000 and those allowed to customers was $360,000 2.. Skyler always maintained a cash balance of $80,000 for her cash register and $100,000 in her safe at the office 3. Loan interest is being paid to a close friend Sean Cray, who had lent Skyler $6 million on 1 April 2016. The interest rate is 5% per annum and is paid by cash on September 30, each year. Interest is calculated on the reducing balance basis. The principal is being paid in six (6) equal cash instalments each on March 31, each year, starting on March 31, 2017. 4. Bad debts written off during the year amounted to $180,000. Cash for $28,000 has been received on 31 March 2019 from Mona Brown in respect of a debt of $70,200 previously written off as bad debt during the financial year. The debtor wishes to continue trading with Skyler and has undertaken to pay the remainder within one (1) month. Cash received was not yet accounted for. 5. Skyler grants a credit period of two (2) months to trade debtors. During your review you noted the following debts had not been previously been accounted for in the review for bad debt. The closing debtors balance on March 31, 2019 includes the below: -L-Pann SA i) ii) a debt of $120,000 from J. Pinkman. Pinkman was sentenced on July 16, 2019 to 10 years hard labour in prison for insider trading. A debt of $30,000 from P. Hermanos. Hermanos migrated and refuses to answer any calls concerning the amount owed. I 6. The amount of cash received from cash sales for 2019 was lodged to the business current account except that some payments were made first. These were: Wages S. Cray - Loan Lunch for hangout with friends Gas and toll money for beach trip Skyler's credit card personal expenses $ 78,000 100,000 10,000 14,000 37,250 7. Skyler rents a warehouse for storage of goods and cleaning supplies. Rent is $58,000 per month and the total amount for twelve months rent is paid every year on May 1. 8. A folder contained the following unpaid bills on March 31, 2019: Telephone $ 865 Trade creditors purchase invoices $25,600. These bills were not previously accounted for. 9. Based on an evaluation of trends of repayment from debtors it was recommended that a provision of doubtful debts be maintained at 2% of total debtors. The accumulated provision for bad debt as at 1/April/18 was $120,000 10. On 1 January 2019 Skyler White new building was completed by B&D Constructions Ltd. The new store has a small production unit for making her best-selling products. The following costs in relation to the construction of her new store and the introduction of its products to the local market. The transactions have not yet been accounted for. (All costs below are attributable to architect and constructor B&D Constructions Ltd. except where stated) Land purchased for building site-internally generated cost Site preparation costs Materials used Labour costs Testing of production unit Architect fees (fee includes $125,000 consultancy for another building that is not likely to be done) Staff training on new machine-internally generated cost General overheads-internally generated cost S 10,000,000 347,500 3,500,000 1,185,000 150,000 1,000,000 110,000 500,000 The buildings expected useful life is 50 years and is to be depreciated on a straight- line basis. A cheque of $1 million was drawn on March 28, 2019 payable to B&D Constructions Ltd. 11. The advertising income received was for advertisements in Skyler's retail outlet for the year starting April 2019. 12. Motor Vehicle was purchased via wire transfer for $444,000 on 7 August 2018. The 12. Motor Vehicle was purchased via wire transfer for $444,000 on 7 August 2018. The prescribed useful life of the asset at date of recognition was the same as the other motor vehicle brought forward. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal 13. See balances noted by previous accountant below: Stock at cost Trade debtors Trade creditors Accruals Utilities Insurance Property Plant and Equipment Office Furniture at cost (date acquired 1/April/2017) Office Furniture Accumulated Depreciation Motor Vehicles at Cost (date acquired 1/April/2017) Motor Vehicle Accumulated Depreciation April 1, 2018 1,970,000 14,110,000 12,070,000 S (65,750) (500,000) 912,000 (182,400) 960,000 (240,000) All Property, plant and equipment are depreciated on a straight line basis. March 31,2019 2,800,000 14,874,600 8,536,500 (38,450) (230,000) 912,000 $ (364,800) 960,000 (328,750) 14. Bank Statement Summary for April 2018 to March 2019 Balance: April 1, 2018 Add Receipts: Cash sales Trade debtors Advertising income Total Receipts Less Payments: Rent Drawings Trade creditors B&D Constructions Ltd Loan Payment Land Purchase of Motor Vehicle Staff Training Utilities Insurance Overheads Consultation Fees Cash purchases Total Payments Balance: March 31, 2019 $ 4,800,500 16,800,000 12,000 696,000 250,765 17,333,000 4,000,000 900,000 10,000,000 444,000 110,000 295,730 1,470,250 500,000 125,000 1,888,750 25,900,000 21,612,500 38,013,495 9,499,005 Other notes: The accounts are prepared under the historical cost convention. All dollar calculations should be rounded to the nearest dollar. Required: (a) Prepare the Income Statement for the year ended March 31, 2019 Comparative figures are not required. (b) Statement of Equity for the year ended March 31, 2019 Comparative figures are not required. (c) Prepare the Balance Sheet as at March 31, 2019 Comparative figures are not required. (d) Notes to the financial statements for PPE will On April 2, 2020 Skyler White asked your accounting firm to prepare the relevant financial statements. She has agreed to pay you $50,000 for your services. Her policy is to pay for accounting services after the accounting work is completed. She gave your firm the following notes: . She is a medium size business owner with a retail business for tourist goods in Ocho Rios since 2014. Her financial year spans from April - March. She is yet to file her taxes for financial year 2018-2019 as her accountant migrated in April 2019 without putting together the financial statement or a trial balance. Skyler White received an estimate from the Tax Authority of Jamaica for her taxation expense her financial year, April 2018 March 2019, being $350,000. The tax authority has requested she files her financial statements within the next month to prevent any penalties. This is why she has approached your firm for assistance. . The following information was obtained from discussions you had with Skyler, the previous accountant's working papers, and other documents provided by Skyler: 1. Discounts allowed by trade creditors amounted to $310,000 and those allowed to trade debtors $550,000. Returns allowed by creditors was $720,000 and those allowed to customers was $360,000 2.. Skyler always maintained a cash balance of $80,000 for her cash register and $100,000 in her safe at the office 3. Loan interest is being paid to a close friend Sean Cray, who had lent Skyler $6 million on 1 April 2016. The interest rate is 5% per annum and is paid by cash on September 30, each year. Interest is calculated on the reducing balance basis. The principal is being paid in six (6) equal cash instalments each on March 31, each year, starting on March 31, 2017. 4. Bad debts written off during the year amounted to $180,000. Cash for $28,000 has been received on 31 March 2019 from Mona Brown in respect of a debt of $70,200 previously written off as bad debt during the financial year. The debtor wishes to continue trading with Skyler and has undertaken to pay the remainder within one (1) month. Cash received was not yet accounted for. 5. Skyler grants a credit period of two (2) months to trade debtors. During your review you noted the following debts had not been previously been accounted for in the review for bad debt. The closing debtors balance on March 31, 2019 includes the below: -L-Pann SA i) ii) a debt of $120,000 from J. Pinkman. Pinkman was sentenced on July 16, 2019 to 10 years hard labour in prison for insider trading. A debt of $30,000 from P. Hermanos. Hermanos migrated and refuses to answer any calls concerning the amount owed. I 6. The amount of cash received from cash sales for 2019 was lodged to the business current account except that some payments were made first. These were: Wages S. Cray - Loan Lunch for hangout with friends Gas and toll money for beach trip Skyler's credit card personal expenses $ 78,000 100,000 10,000 14,000 37,250 7. Skyler rents a warehouse for storage of goods and cleaning supplies. Rent is $58,000 per month and the total amount for twelve months rent is paid every year on May 1. 8. A folder contained the following unpaid bills on March 31, 2019: Telephone $ 865 Trade creditors purchase invoices $25,600. These bills were not previously accounted for. 9. Based on an evaluation of trends of repayment from debtors it was recommended that a provision of doubtful debts be maintained at 2% of total debtors. The accumulated provision for bad debt as at 1/April/18 was $120,000 10. On 1 January 2019 Skyler White new building was completed by B&D Constructions Ltd. The new store has a small production unit for making her best-selling products. The following costs in relation to the construction of her new store and the introduction of its products to the local market. The transactions have not yet been accounted for. (All costs below are attributable to architect and constructor B&D Constructions Ltd. except where stated) Land purchased for building site-internally generated cost Site preparation costs Materials used Labour costs Testing of production unit Architect fees (fee includes $125,000 consultancy for another building that is not likely to be done) Staff training on new machine-internally generated cost General overheads-internally generated cost S 10,000,000 347,500 3,500,000 1,185,000 150,000 1,000,000 110,000 500,000 The buildings expected useful life is 50 years and is to be depreciated on a straight- line basis. A cheque of $1 million was drawn on March 28, 2019 payable to B&D Constructions Ltd. 11. The advertising income received was for advertisements in Skyler's retail outlet for the year starting April 2019. 12. Motor Vehicle was purchased via wire transfer for $444,000 on 7 August 2018. The 12. Motor Vehicle was purchased via wire transfer for $444,000 on 7 August 2018. The prescribed useful life of the asset at date of recognition was the same as the other motor vehicle brought forward. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal 13. See balances noted by previous accountant below: Stock at cost Trade debtors Trade creditors Accruals Utilities Insurance Property Plant and Equipment Office Furniture at cost (date acquired 1/April/2017) Office Furniture Accumulated Depreciation Motor Vehicles at Cost (date acquired 1/April/2017) Motor Vehicle Accumulated Depreciation April 1, 2018 1,970,000 14,110,000 12,070,000 S (65,750) (500,000) 912,000 (182,400) 960,000 (240,000) All Property, plant and equipment are depreciated on a straight line basis. March 31,2019 2,800,000 14,874,600 8,536,500 (38,450) (230,000) 912,000 $ (364,800) 960,000 (328,750) 14. Bank Statement Summary for April 2018 to March 2019 Balance: April 1, 2018 Add Receipts: Cash sales Trade debtors Advertising income Total Receipts Less Payments: Rent Drawings Trade creditors B&D Constructions Ltd Loan Payment Land Purchase of Motor Vehicle Staff Training Utilities Insurance Overheads Consultation Fees Cash purchases Total Payments Balance: March 31, 2019 $ 4,800,500 16,800,000 12,000 696,000 250,765 17,333,000 4,000,000 900,000 10,000,000 444,000 110,000 295,730 1,470,250 500,000 125,000 1,888,750 25,900,000 21,612,500 38,013,495 9,499,005 Other notes: The accounts are prepared under the historical cost convention. All dollar calculations should be rounded to the nearest dollar. Required: (a) Prepare the Income Statement for the year ended March 31, 2019 Comparative figures are not required. (b) Statement of Equity for the year ended March 31, 2019 Comparative figures are not required. (c) Prepare the Balance Sheet as at March 31, 2019 Comparative figures are not required. (d) Notes to the financial statements for PPE will