Prepare John Brown, a store owner's trading account and profit or loss account for the year ended 31 December 2020. and a Statement of Financial Position as at that date, using the following balances that were extracted from his books Balances as at 31 December 2020 N N Sales 400.000 Salaries and Wages 30.000 Purchases 350.000 Rates 6.000 Sales returns 5.000 Telephone 1.000 Purchases returns 6.200 Shop Fittings @ cost 40.000 Opening Inventory 100,000 Motor Van a cost 30,000 Provision for doubtful debts 800 Accounts Receivables 9,800 Bad debts 200 Accounts Payables 7.000 Capital 179.000 Cash at Bank 3.000 Drawings 18.000 i ii. fii iv Closing inventory at 31 December 2020 N120,000 Accrued: Wages N5.000. Telephone N220. Rates prepaid N500 The provision for doubtful debts to be increased to 10% of accounts receivables Depreciate shop fittings at 10% per annum, and van at 20% per annum. on cost. V. 1 Question 2 a) Explain THREE purposes of providing for depreciation b) State THREE factors to be taken into account in arriving at the annual depreciation charge for an asset c) Illustrate the reducing balance method for depreciation of an asset, using the following information: cost of asset is N150.000, rate of depreciation is 10% per year. period is three years, and residual value is N5.000. Question 3 a) Calculate the profit for the period, given that Capital at the beginning of year (April 01.2020) Capital at the end of year (March 31,2021) Capital brought in by the proprietor during the year Quarterly withdrawals by the proprietor during the year N120.000 N200.000 N50.000 N7.500 b) Using the following extracts from the records of Mr Ayodele, prepare his income statement for the period ended 30 June 2020 30/6/2019 30/6/2020 Inventory N300,000 To he calculated Receivables N200.000 N100.000 Payables N300,000 N200.000 During this period: Receipts from Receivables N700.000 Cash Sales N200.000