QUESTION 4 [40 Marks]

Nyams Ltd has been in business for the past five years and they thrive to keep adequate books of accounts to enhance their company businesss reputation. The finance manager for Nyams Ltd makes sure that they adhere to all rules and policies of the company when preparing financial statements. As a newly appointed company accountant you have been given the following extracts from the books of the company:

$

Drawings 252 000

Revenue 1 246 455

Purchases 319 788

Salaries 113 400

Rent 44 100

Advertising 15 750

Machinery 567 000

Motor vehicle expenses 37 800

Cash 37 800

Opening Inventory 42 210

Fixtures 252 000

Closing Inventory 22 050

Further Information:

The discount allowed and the discount received were $31 500 and 32 130 respectively. It is their company policy to depreciate non-current assets at 10% per year. It was revealed that the accrued salaries amounted to $6 300. Advertising expenses worth $2 205 were paid in advance.

NB: Capital for Nyams Ltd was $434 763

Required:

1. Prepare an income statement for year ended 31 December 2021 (20marks).
2. Prepare a Statement of Financial position as at 31 December 2021 (20 marks)