Page 2 SECTION A QUESTION 1 IS COMPULSORY FROM THIS SECTION: QUESTION 1 ASSETS BUS021 (2022) Oak Ltd Statement of Financial Position as at 31 December 2019 Non-current assets Property, plant and equipment Land 130,000 Equipment at cost 10,000 Depreciation (1,000) 9,000 139,000 Current assets Inventories 6,000 Receivables 3,000 Prepaid expenses: Water 200 Rates 200 Cash 20,000 29,400 Total assets 168,400 Equity and Liabilities Equity Original Capital (Owner's Capital) Retained profit 120,000 25,400 145,400 Liabilities Long-term liabilities Mortgage 10,200 Short-term liabilities Trade payables Accrued expenses: Rent Tax payable Total Equity and Liabilities 2,500 500 9,800 12,800 168,400 BUS021 (2022) During 2020, the following transactions took place: 1. The owners introduced new capital in the form of cash 10,000. Page 3 2. Water bill for the year 2,000 and the owner paid 1,800 in cash at the end of the financial year. 3. Inventories total 60,000 was purchased on credit. 4. Inventories total 20,000 was purchased for cash. 5. Credit sales revenue during the year total 75,000 (cost 35,000). 6. Cash sales revenue during the year total 100,000 (cost 50,000). 7. Building continued to be rented at annual rental of 10,000. During the year, owner paid in cash 10,500 plus 1,000 towards the next year. 8. Rates on the premises were paid in cash during the year as follows: for the period 1 April 2020 to 31 March 2021 was 1,200. 9. Receipts from trade receivables total 52,000. 10. A new delivery van was bought for cash during the year for 16,000 and the useful life of the asset is 7 years. The expected residual value of the asset is 2,000. 11. Payments to trade payables total 40,000. 12. During the year total wages 12,000 was paid in cash however at the end of the year, the business found out 2,000 of wages for the last week of the year was not paid. 13. Bank Loan 10,200 full amount paid back during the year. 14. The owner brought in a machine for 5,000 to the business and the useful life of the asset is 4 years. The expected residual value of the assest is 1,000. 15. The short-term loan 5,000 received were deposited in the business bank account. 16. The corporation tax bill for 2020 is 10,000 half of which was paid in cash during the year and the balance was carried forward towards the next financial year. The business uses the straight-line method for depreciating its non-current assets. Required: Using all the information detailed above, prepare and present: a) The Statement of Financial Performance (also known as the Profit and Loss Account or Income Statement) for the financial year ended 31 December 2020. [20 Marks] b) The Statement of Financial Position (also known as the Balance Sheet) as at 31 December 2020. [20 Marks] Note: Provide a detailed bookkeeping method, incorporating all the above financial transactions. Marks will be deducted for any missing parts of the double entry bookkeeping records. [Total Marks 40]