Question 1 The following information is taken from the accounting records of XYZ Limited, a supermarket retailer, for the year ended 30 June 20X1. Trial Balance Dr Cr Ek k Purchases 640,000 Admin expenses 45,000 Bank overdraft 10,500 Inventories at 14 July 2020 25,000 Trade receivables 600 Retained earnings at 1" July 2020 38,100 Fixtures and Fittings (at cost) 290,000 Buildings (at cost) 220,000 Fixed Assets (buildings and fixtures and fittings - Accumulated depreciation 430,000 Trade payables 21,000 720,000 Sales revenue 1,000 Called up share capital 1,220,600 1,220,600 . . Relevant Accounting Policies: Depreciation is charged annually. A full year's depreciation is charged in the year of acquisition and no depreciation is charged in the year of disposal. Buildings have a useful economic life of 50 years with no residual value and depreciation is calculated on a straight-line basis. In addition, the following information is provided regarding matters which are not reflected in the above figures: i. At the year end, the supermarket needs to record a 7,400 tax expense which is required to be paid on 30th September 20X1. ii. On 31 December 2020 the company took out a new loan for 20,000 at an interest rate of 4% per year. The loan is repayable in full on 31 December 20X5. No interest has yet been paid on this loan from cash. iii. Depreciation needs to be charged on the buildings for the full year. iv. The trade receivables balance reflects a customer who was also a local business and was offered credit from the supermarket. The local business is now in administration and so the full amount is not considered to be recoverable. V. The closing inventory balance is 19,500 and costs of sales are calculated on a periodic basis. vi. An electricity bill for 3,000 has been paid out of cash and recorded as an expense. However, it has just been discovered that this expense relates to future usage in the July through Docomhar 20X? nerind a) For each of the six points above, detail the required double-entry accounting adjustments. You should explain your calculations, detailing any underlying assumptions made in determining them. Your answer should include the associated debit and credit for each adjustment and indicate which core element of the accounting equation (ie. assets, liabilities or equity) is affected by each debit and credit. (24 marks) b) Determine the total cash and fixed asset balances from the trial balance both before and after the adjustments in part (a) have been implemented. Your answer should briefly explain the direction of the impact (.e., increase or decrease) on cash and fixed assets for each of the adjustments. (8 marks) c) For adjustment (iii) above, relating to the deprecation charge required for buildings, explain how this is dealt with when producing Starlight Supermarket Limited's Cash Flow Statement for the 12 months ending 30th June 20X1 and why such treatment is required. (4 marks) d) Discuss how to account for the land and buildings if they were revalued at market value and explain briefly why current accounting standards allow the choice of valuing fixed accete at either historical cost or market value