Question 2: (20 marks John owns a small business selling coffee makers to other businesses. On 31" December 2019 he extracted the following trial balance. Account Name Debit $ Credits Sales Revenue 3,608,592 Sales returns 27,456 Opening inventory 490,968 Purchases 1,979,256 Purchase returns 17,712 Freehold property 1,218,384 Equipment at cost 183,600 Accumulated depreciation on equipment 33,600 Motor vehicle 252,000 56,400 Accumulated depreciation on motor vehicle Salaries and Wages 77,760 Insurance 168,00 Motor expenses 26,400 Advertising expenses 19,536 Loan interest 31,200 Receivables 378,240 B291 / THE-Final3 of 12020-2021/Summer Allowance for receivables 20,304 Payables 344,448 Cash at bank 651,456 Bank loan 297,600 Capital 974,400 Total 5,353,056 5,353,056 The following information is relevant. 1. Closing inventory was valued at $510,912. 2. Equipment is depreciated by 10% on Straight line basis. 3 Motor vehicles are depreciated by 20% on reducing balance basis. 4. Accrued wages at the end of 2019 amount to $16,080. 5. On 1 November 2019 Johns paid $7,200 for insurance which is valid until 31 October 2020 6. Irrecoverable receivables of $12,000 need to be written off. 7. John decides to increase the allowance for receivable for $25,104. 8. John has taken goods worth $21,600 for his own use. Required: a. Prepare John's income statement for the year ending 31" December 2019. b. Prepare John's balance sheet as at December 2019. +