Question 1 ANSWER QUESTION 1 AND ANY TWO OTHER QUESTIONS Section A: Compulsory question for 40 marks The trial balance below is for RP plc for the y/e 31/12/2021 [in 000s] Purchases and Sales 650 1100 Inventory 1/1/2021 100 Receivables and payables 87 70 Selling & distribution expenses 50 Rent, rates and insurance 40 Staff salaries 100 20 Advertising Gas & electricity Audit fee Bad debt Directors' remuneration Debenture interest Interest on bank loan Cash Bank |llallllgla Premises at cost Equipment at cost 130 Equipment-accumulated depreciation 30 Furniture & fittings at cost 100 Furniture & fittings- accumulated depreciation 60 1 Ordinary share capital 350 7% Long term bank loan 100 11% Debentures 100 Share premium 120 Retained profits 70 Interim ordinary dividend Totals 20 2000 2000 Page 3 of 7 Additional information as at 31/12/2021: Inventory was valued at 90,000. Prepayments for: Insurance 5000; distribution expenses 4000; Accruals for: Rates 1000; Gas & electricity 2000; Audit fee 1000 The equipment to be depreciated by 20% on reducing balance The furniture & fittings to be depreciated by 20% on straight line. The directors wish to provide 25,000 for taxation. Required: The directors propose a final ordinary dividend of 8p per share. a) Income Statement for the year ended 31/12/2021. b) Statement of Financial Position as at 31/12/2021. [20 marks] [20 marks]