Question 2 Clearwater Enterprise is a merchandising company which has business operations in Ipoh, Perak. The following balances have been extracted from the books as at 31 December 2020. Clearwater Enterprise Trial Balance as at 31 December 2020 Descriptions Debit RM 30,000 Credit RM 10,000 250,000 120,000 24,000 40,000 22,500 61,400 58,600 12,400 40,000 200,000 Machinery Accumulated depreciation - machinery Land Building Accumulated depreciation - building Loan from Ah Ling - 10 years Bank overdraft Trade receivable Inventories Trade payable Drawings Capital Carriage outwards Sales Discount allowed Purchases Carriage inwards Salaries Supplies Bad debts Prepaid insurance Interest expense General expenses Cash 20,000 1,921,000 22,500 1,100,000 5,800 280,000 80,000 8,400 96,000 17,200 37,000 3,000 2,229,900 2,229,900 Other information: 1) Closing inventories as at 31 December 2020 were valued RM25,000. 2) The prepaid insurance is for a 12-month policy purchased on 1 March 2020 by cash. The policy is effective from 1 March 2020. 3) Interest on loan from Ah Ling accrued to RM4,000. 4) Annual depreciation for the non-current assets as follows: Machinery Building 10% - Reducing balance method 20% - Straight line method 5) Owner took goods costing RM3,000 and cash of RM1,000 from the business for his personal consumption. 6) An amount of RM1,500 due from receivables is to be written off as irrecoverable. 7) Provision for doubtful debts is to be adjusted to 5% of the revised trade receivables figure. Required: a) Prepare Clearwater Enterprise's Statement of Profit or Loss (post adjustments) for the year ended 31 December 2020. (15 marks) b) Prepare Clearwater Enterprise's Statement of Financial Position (post adjustments) as at 31 December 2020. (15 marks) (Total: 30 Marks)