QUESTION 1 (30 MARKS) Ms Julie is a sole trader, and you are given the following relining to her business: Trial balance as at 30 September 2021 Dr 8 Inventory as at 1 October 2020 Wages and salaries Sales Carriage inwards 19,134 106,483 462,970 2.229 Rent Gias Purchases Accounts receivable 18,465 20,005 226.855 74,400 Accounts payable $3,749 Machinery: Cost 232,140 Computers: Cost 97,080 Machinery: Accumulated depreciation at 1 October 2020 77,580 Computers Accumulated depreciation at 1 October 2020 54,600 Drawings 34,102 Bank Bad debt expense 1,807 13,408 Allowance for doubtful debts at 1 October 2020 2.276 Capital 191,319 844.301 844.301 The following additional information is available: The inventory was counted at 30 September 2021 and was valued at GHC19,491 Depreciation is to be applied at the following rates iv. N a Machinery: (reducing balance) 15% b. Computers: (straight-line) 25% The amount shown for rent on the trial balance includes a payment of GHC10,500, which represents twelve months' rent to 31 May 2022 Gas charges incurred for which no invoices have yet been received amount to a total of GHC4,786 The allowance for doubtful debts is to be set at 4 per cent of accounts receivable Required: a. Prepare the income statement for the year ended 30 September 2021 and a balance sheet (statement of financial position) as at that date. b. Why is it necessary to prepare financial statements? c. Briefly explain any two accounting concepts/ principles you have applied in preparing the financial statements. Page 2 of 4