QUESTION 2 000 900 744 26 4 Below is the Trial Balance of Happy Plc. Trial Balance as at 31 December 2020 000 Sales Sales returns 12 Purchases Purchases returns Carriage inwards 15 Inventory at 1 January 2020 40 Discount (net) Administration expenses 44 Carriage outwards 18 Selling and distribution expenses 60 Premises 190 Vehicles 80 Fittings 40 Cash and bank 9 Trade receivables 40 Interim dividend for ordinary shares 4 Accumulated depreciation: Vehicles Accumulated depreciation: Fittings Allowance for doubtful debts Trade payables Ordinary shares of 1 each 8% Preference shares of 1 each 10% Debentures Share premium Retained profit 1.300 62 28 3 37 80 50 40 71 3 1.300 Additional information: At 31 December 2020, the following had to be taken into account: Inventory 44,000 Administration expenses payable 4,000 A year's debenture interest is due Depreciation: Vehicles 20% on cost Depreciation: Fittings 25% on reduced balance Allowance for doubtful debts is to be 5% of trade receivables Corporation tax is to be charged at 25% of profit for the year REQUIRED: (a) A statement of profit or loss for the year ended 31 December 2020 [13] (b) A statement of financial position as at 31 December 2020. [12] [Total: 25 marks]