Part A - Individual Component (30%) (Time allowed: 1 hour 30 mins) The following trial balance is extracted from the books of the Starry Hotel Ltd as at 31 December 2019: Dr. Cr. $ $ Sales 2,000,000 Purchases 1,200,000 Insurance 214,000 General expenses 20,000 Wages and salaries 123,000 Debenture interest 13,640 Light and heat 85,000 Premises, at cost 1,200,000 Equipment, at cost 240,000 China and cutlery (1 Jan 2019) 50,000 Accumulated Depreciation - Premises (1 Jan 2019) 120,000 Accumulated Depreciation - Equipment (1 Jan 2019) 34,000 Accounts receivable 310,000 Provision for doubtful debts (1 Jan 2019) 7,500 Accounts payable 220,000 Bank 84,360 8% Debentures 2024 341,000 Inventory (1 Jan 2019) 360,000 Share capital (1 Jan 2019) 500,000 Share premium (1 Jan 2019) 220,000 General reserve (1 Jan 2019) 200,000 Retained earnings (1 Jan 2019) 277,500 Interim dividend paid 20,000 3,920,000 3,920,000 1 Additional information: (1) Inventory at 31 December 2019 was $420,000 at cost. Its total net realizable value was valued at $370,000. (2) At 31 December 2019: Accrued salaries for December amounted to $3,500 A director's fee totalled $4,000 has not been paid and recorded Insurance paid for year 2020 amounted to $50,000 Half-year debenture interest remained unpaid (3) Depreciation: Premises 10% on cost Equipment 20% on reducing balance basis China and cutlery were revalued at $38,000 (4) The provision for doubtful debts is to be revised to 3% of accounts receivable at 31 December 2019. (5) Taxation of $45,000 is to be provided on the profit of the year. (6) At 31 December 2019, the directors declared a final dividend amounted to 10% of share capital issued and resolved to transfer $40,000 to general reserve. Required: (a) Prepare the Income Statement for the year ended 31 December 2019. (10.5 marks)