QUESTION ONE The following trial balance was extracted from the ledger account of Bob & Sons, a sole proprietor as at 31 December 2016. Trial Balance as at 31 December 2016 DR. GHe CR GHe Building, at cost 650,000 Office equipment at cost 135,000 Plant and Machinery 263,500 Accumulated depreciation (as at 1 January 2016) Building 39,000 Office equipment 27,000 Plant and Machinery 65.875 Purchases 248,000- Sales 500,000 Inventory 1 January 2016 27.500 Discount allowed 4,800 Returns inwards i 3,200 Wages and Salaries Rent Insurance Trade receivables Trade payables 64,885 5,580 6,000 145,000 132,750 Provision for bad debt Bank overdraft Cash in hand Long term loan Capital 1 January 2016 24,840 58.956 5,400 350,000 360,444 1,558,865 1,558,865 The following additional information as at 31 December 2016 is available: Inventory as at December 2016 was valued at GH24,000. ii)Insurance was paid for 15 months ending 31 March 2018. (in iv) 3 months rent is outstanding. The agreed amount per month is GHe 620. Included in wages and salaries is an amount of GHe2,500 withdrawn by the owner. Secondly the cleaner has not been paid his salary for December 2016 as at the end of the year. His monthly salary is GH500. v) Interest on capital per anum is 15% and is yet to be recorded. vi) Depreciation for the year ended 31 December 2016 has not been charged as follows: Building 3% per anum using straight line method. Office equipment 20% using reducing balance method. Plant and machinery 25% using reducing balance method. Required: a) Prepare Bob & Sons Statement of profit or loss account for the year ended 31 December 2016.