QUESTION 1 (30 MARKS) Audrey Company LTD was incorporated 5 years ago. This company sells health and beauty product and is led by a successful business woman. The board of directors are Ms Audrey and a few major shareholders. The trial balance of the company as at 31 December 2016 is as follows: Credit (RM) 4,000 26,200 Audrey company LTD Trail Balance as at 31 December 2016 Account Debit (RM) Cash in hand 34,400 Cash in bank 42,000 Inventory (1 January 2016) 38,000 Debtors 59,000 Prepaid insurance 18,600 Land 120,000 Building 90,000 Accumulated depreciation- Building Equipment 110,000 Accumulated depreciation equipment Creditors Unearned revenue Accrued mortgage Ordinary shares Retained earning 49,700 Dividends 15,500 Sales Purchases 103,000 Salary expenses 64,000 Repair expenses 15,500 Advertising expenses 10,400 Utility expenses 15,900 Property tax 10,000 Interest expenses 5,500 24,600 2,700 50,000 300,000 294,60 Additional information: i. ii. 111. iv. V. vi. vii. Depreciation for the year is RM1,000 for the building and RM4,200 for the equipment 3% of the debt by the company's debtors is uncollectible. Insurance expenses is RM11,600 Accrued interest expenses is RM5,300 Accrued property tax is RM2,700 Ending inventory as at 31 December 2016 is RM39,700 Corporate income tax rate is 28% Required: After adjustment of item (i) to (vii) have been taken into account: a Prepare the income statement for the year ended 31 December 2016. (15 marks) b. Prepare the statement of retained earnings for the year ended 31 December 2016. (5 marks) c. Prepare the statement of financial position as at 31 December 2016. (10 marks)