Question 3 32 Marks lan Shetu has run a small business for many years. He has never kept adequate accounting records. However, a need to obtain a bank loan for the expansion of the business has necessitated the preparation of financial statements for the year ended 31 July 2021. As a result, the following information has been obtained after much careful research: The business assets and liabilities are as follows: 31 July 2020 31 July 2021 N$ N$ Inventory 8 600 16 800 Account Receivables 3 900 4 300 Account Payables 7 400 8 900 Rent Prepaid 300 420 Electricity Accrued 210 160 Bank 2 300 1 650 Cash 360 330 All takings have been banked after deducting the following payments: Cash drawings - lan Shetu has not kept a record of cash drawings but suggests these will be in the region on N$8 000, casual labour N$1 200 and purchase of goods for resale N$1 800. Bank payments during the year ended 31 July 2021 have been summarised as follows: Purchases N$101 500, Rent N$5 040, Electricity N$1 390, Delivery costs to customers N$3 000 and casual labour N$6 620. Page 14 of 25 It has been established that a gross profit of 33.3% on cost has been obtained on all goods sold. Despite her apparent lack of precise accounting records, Ian Shetu can confirm that he has taken out of the business during the year under review goods for his own use costing N$600, Required: a) Prepare total purchases for the year ended 31 July 2021. 6 marks b) Prepare an income statement for the year ended 31 July 2021. 14 marks c) Prepare statement of financial position as at 31 July 2021. 12 marks