Question 2 (35 marks) Spirit Limited has been operating as a company selling sports shoes, sports wears, and other accessories for some years. The following list of balances has been extracted from the company's ledger as of March 31, 2022. $ Advertising Expenses Bank Interest Expenses Cash On Hand Accounts Payable 116,800 6,250 5,910 36,740 Accounts Receivable 52,800 Electricity Expenses Paid 43,000 Fixtures And Fittings At Cost 90,000 Accumulated Depreciation - Fixtures And Fittings At April 1, 2021 13,500 Office Equipment At Cost 75,000 Accumulated Depreciation Office Equipment At April 1, 2021 21,000 Postages And Stationery 19,330 Purchases 372,000 Rent, Rates and Insurance 63,200 Retained Earnings at April 1, 2021 76,300 Salaries And Wages 148,750 Sales Share Capital Stock At April 1, 2021 5-Year Bank Loan (At An Interest Rate Of 15% Per Annum) 675,000 150,000 29,500 50,000 1. 2. The following additional information as of March 31, 2022, includes: Insurance were paid in advance for April to June 2022 - $6,800. Several customers have failed to settle the outstanding balance for a long time, totaling amount of $10,670. It was deemed as bad debts as of March 31, 2022. 3. The company received an electricity bill of $3,250 for March 2022. However, this electricity bill has not been settled until May 2022. 4. Stock as of March 31, 2022, was valued at $146,500. 5. 6. 7. The company will pay sales commissions of 5% on sales of the year in June 2022. Annual bank loan interest has not been included in bank interest expenses for the year. Depreciation of fixtures and fittings: 10% per annum on the straight-line basis. 8. Depreciation of office equipment: 15% per annum on the reducing balance basis. Required: (a) Prepare the Profit And Loss Account for the year ended March 31, 2022, and the Balance Sheet as of that date. (25 marks) (b) Give comments on the above information given. (10 marks) Entrepreneurial And Financial Strategies In Sports And Recreation - Assignment 3 (2022) 3 | Page