Question 2 Kamal Baharin has been trading for some years as boutique owner. The following list of balances has been extracted from his ledger as at 30th April 2020: Capital Sales Trade Accounts payable Return outwards Allowance for doubtful debts Discount allowed Discount received Purchases Return inwards Carriage outwards Drawings Carriage inwards Rent, rates and insurance Heating and lighting Postage, stationery and telephone Advertising Salaries and wages Bad debts Cash in hand Cash at bank Inventory as at 1st May 2019 Trade accounts receivable Fixtures and fittings - at cost Provision for depreciation on fixtures and fittings - as at 30th April 2020 Depreciation RM 83, 887 259, 870 19, 840 13, 407 512 2, 306 1,750 135, 680 5, 624 4, 562 18, 440 11, 830 25, 973 11, 010 2, 410 5, 980 38, 521 2, 008 534 4, 440 15, 654 24, 500 120, 740 63, 020 12, 074 The following additional information as at 30th April 2020 is available as follows: i. Inventory as at 30th April 2020 was valued at RM 17, 750. ii. Kamal Baharin paid in advance insurances RM 1, 120. iii. Heating and lighting outstanding RM 1, 360. iv. There is a prepaid rates of RM 5, 435. The allowance for doubtful debts is to be adjusted from RM 512 to RM 735. V. Required: a) Prepare statement of profit or loss for the year ending 30th April 2020 for Kamal Baharin. (13 marks) b) Prepare statement of financial position as at 30th April 2020 for Kamal Bharin. (9 marks) c) Describe the two (2) main reasons for a company to perform adjustment on financial statements. (3 marks) [Total = 25 marks]