prepare profit and loss appropriation account for the year ended 30 june 2020. Prepare balance sheet.

QUESTION 4 The following list of balances was extracted from the books of Paradise Lid on 30 June 2020: Ordinary share capital fully paid of 750,000 shares $ 8% preference share capital of 100,000 shares 750,000 Freehold property 100,000 Motor vehicles 1,150,000 Office equipment 250,000 Motor vehicles - Accumulated depreciation 85,000 Office equipment - Accumulated depreciation 187,500 2 37560 Gross profit 51,000 500 0 Closing Stock 810,000 102,000 Administrative expenses 1710g 230,000 Selling expenses 138,000 Distribution expenses 105,000 6% Debentures - 2023 (issued in year 2016) 50,000 Interest paid to Debenture Holders 1,500 Profit on sale of vehicle 1,000 Retained profits - 1 July 2019 (credit balance) 146,800 Accounts receivable 66,000 Accounts payable 58,000 Cash at bank (credit balance) 13,400 Cash in hand 200 Interim Dividend - ordinary shares 37,500 Interim dividend - preference shares 4,000 Allowance for doubtful debts 1,500 The following information is to be taken into account: (1) At the 30 June 2020, accrued selling expenses amounted to $11,500 and prepaid administrative expenses amounted to $4,000. (ii) The allowance for doubtful debts is to be maintained at 2% of accounts receivable at 30 June 2020. (iii) Depreciation is to be provided as follows: office equipment - 20% per annum on cost on straight line basis motor vehicles - 50% reducing balance. (ill) The directors proposed the following: Payment of the final dividend to the preference shareholders . A final dividend to the ordinary shareholders of $0.10 per share. Required a) Prepare the Profit & Loss and Appropriation Account for the year ended 30 June 2020. (11 marks) b) Prepare the Balance Sheet at 30 June 2020. (9 marks) [Total 20 marks]