Singh Private Limited ended their last financial year on the 31 December 2017. The following unadjusted trial balance was prepared for Singh Private Limited as at 31 December 2017: Long Term Investment Delivery Vans: Cost Accumulated Depreciation as at 1 January 2017 Shop Fittings: Cost Accumulated Depreciation as at 1 January 2017 Inventory as at 1st January 2017 Trade Receivable Provision for Doubtful Debts 1 Jan 2017 Bad Debts Bank Overdraft Trade Payable Retained Profit as at 1 January 2017 Term Loan-Due June 2020 Loan Interest Rent Expense Business Insurance expense Telephone expense Salary expense Utilities expense Advertising expense Sales Directors Remuneration Purchases Equity Dividends paid Preference shares @$1.00 par Share capital @ $1.00 par Share Premium General Reserves Suspense Account Total Debit $ 400,000 160,000 30,000 144,600 330,720 10,000 2,000 120,000 39,000 11,100 85,000 17,600 10,500 52,000 997,700 20,000 1,100 2,431,320 Credit $ 64,000 3,000 9,500 50,000 120,190 135,040 40,000 1,766,590 100,000 50,000 43,000 50,000 2,431,320 The following additional information was available: 1. The following should be noted regarding the bank balance. 1. Bank charges for $2,000 debited to the bank statement remain unrecorded at year-end. II. A cheque for $2,500 for December salary was recorded in the books only in January 2018. III. $20,000 received from a receivable account had been entered twice in the books. 2. The inventory was valued at $200,000 as at 31 December 2017 at sales value. Included in the closing stock were some damaged goods costing $5,000. These goods were subsequently sold in January 2018 for $4,000. Transportation cost of $500 was incurred. The company profit margin is 50%. 3. The business insurance accounts reflects insurance premium paid for twelve months starting from 1st March 2017. 4. A Bad Debt of $5,000 is to be written off and a provision of 1 % against the remaining trade receivable as at 31 December 2017 should be reflected at year-end. 5. The unpaid interest on the loan was paid only on 1 January 2018. Interest rate on the loan is 10% per annum. 6. A delivery van, the cost of which is $20,000 and accumulated depreciation of $8,000 was sold in December 2017, the sales proceeds of $20,000 being credited to the sales account. No other entries have been made for this disposal. No depreciation is charged in the year of sale. 7. Depreciation is to be provided at the following rates per annum using the method as indicated. Shop fittings -10% using reducing balance Method. Delivery Vans-On cost using the straight line method. The entire fleet of delivery vans was purchased on the 1st January 2015. Assume zero residual values. 8. The utility expense for the month of December 2017 of $1,500 was unpaid as at 31 December 2017. 9. Taxation expense of $20,000 for the year ended 31 December 2017 remains unpaid at year-end. 10. Provision is to be made for unpaid audit fees of $10,000 for the year- ended 31 December 2017. 11. Director's remuneration of $4,000 remains unpaid at year-end. 12. During the year, 20,000 ordinary shares were issued at $1.50 per share, the sales proceeds of which were credited to the sales account. 13.$5,000 from the retained profit is to be transferred to the general reserves. 14. The Preference shares are redeemable on the 31 December 2021 and carry a fixed dividend rate of 5% per annum. 15. The suspense account created was due to the following errors. a. A cheque written for $1,000 was recorded in the telephone expense account as $100. b. Director's remuneration paid for $2,000 was not recorded in the director remuneration account. c. A sales invoice of $2,000 was recorded in the sale account at $200. Required: a) Prepare an Income Statement, a Statement of Changes in Equity for the year-ended 31 December 2017 and a Statement of Financial Position as at that date in a form suitable for presentation to the directors of the company. (25 marks) THE END