Question 4 Lauder Limited is a relatively new company, buying and reselling computer components. It commenced life on 1 September 2019 and completed its second year of operations on 31 August 2021. When it started business on 1 September 2019, it raised 300,000 in cash from the issue of 300,000 ordinary shares with a nominal value of 1 each. It also obtained a ten (10) year bank loan of 100,000 at an annual interest rate of 10% when it started business. The bank loan is repayable at a rate of 10,000 at the end of each year. The summarised Balance Sheet (with notes a, b and c) at 31 August 2020 was: Eguiy and Liabilities Assets Ordinary share capital Property at cost Retained profits Equipment at net book value Long term bank loan Inventories Bank interest accrual Trade receivables Trade pavables Cash/Bank Tax payable Notes to balance sheet: a: The bank interest accrual at 31 August 2020 relates to 10,000 bank interest due to be paid to the bank on 31 August but the management team had forgotten to pay it. b: Equipment was purchased on 1 September 2019 for 250,000 and is depreciated over ve (5) years using the straight-line depreciation approach. 6: The company's policy is to carry property at its cost price and not depreciate it. During the nancial year to 31 August 2021 the following transactions and events occurred: 1. On 1 September 2020 the bank interest accrual of 10,000 was paid. 2. On 31 August 2021 bank loan interest of 9,000 was paid. 3. On 31 August 2021 the company was contractually obliged to pay 10,000 in part repayment of the bank loan but forgot to do so. 4. 0n 1 September 2020 an additional 100,000 ordinary shares were issued for cash. These had a nominal value of 1 each but were sold at 2 each. 5. On 1 September 2020, rent of 60,000 was paid in cash for the eighteen (18) months to 28 February 2022. 6. On 1 January 2021 the tax payable bill of 20,000 was paid. ?. In accordance with balance sheet note b to the balance sheet above, depreciation was charged. Page 8 of 11 8. Inventories totalling 200,000 were purchased on credit from suppliers (trade payables) during the nancial year. At 31 August 2021 trade payables were owed 30,000. 9. The inventory cost of sales during the nancial year amounted to 220,000. 10.The inventory at the end of the nancial year, recorded at cost, was damaged and was written down by 10,000. 11.Wages and salaries totalled 50,000 were all paid in cash. 12.Various other operating costs amounted to 2,000 each month, paid with one month's delay. 13.Components were sold on credit and generated total revenue of 440,000. On 31 August 2021 40,000 was owed to the company by the credit customers. 14.Taxation of prots from the nancial year ended 31 August 2021 is estimated as being 15,000, all payable in the next financial year. 15.The directors suggested paying no dividends for the year. Required 4a) Prepare an Income Statement for the financial year ended 31 August 2021. [15 marks] 4b) Prepare a Balance Sheet as at the end of the financial year ended 31 August 2021. [10 marks] [Total 25 marks]