Question 1 On 1st January 2020 the following balances has been extracted from the books of J. Peter, businessman who owned t-shirt printing business in Nilai, Negeri Sembilan. Business rates, RM 500 (Dr) Packing materials, RM 900 (Dr) During the year ended 31st December 2020, the information related to these two accounts is as follows: i Business rates of RM 4,800 were paid to cover the period from 1st May 2020 to 30th April 2021. ii. RM 7,000 was paid for the packing materials bought. iii. RM 800 was accrued on 31st December 2020 for packing materials bought on credit base. iv. Old packing materials amounting to RM 300 were sold as scrap and received cash. Closing inventory of packing materials was valued at RM 1,400. V. Required: a) Prepare business rates account and packing materials account to show appropriate amount to be transfer to the profit and loss account for the year ending 31st December 2020. (13 marks) b) Prepare the extract version of profit and loss account for the year ending 31st December 2020 to present the information related to packing materials and business rates (3 marks) c) Explain the effect of outstanding expenses on the income statement and statement of financial position. (4 marks) d) Explain two (2) main reasons to prepare income statement. (5 marks) [Total = 25 marks] =