Question one You work as a senior accountant for a medium business called Jordan Enterprise. The following trial balance has been compiled on 28 October 2020: Dr Cr Sales 428000 Purchases 162000 Accounts receivable 22000 Accounts payable 16000 Stationery expenses 7000 Cash 1000 Bank 4000 Rent, rates and insurance 34000 Advertising expenses 19000 Opening Inventory 23000 Payroll costs 110000 Communication expenses 17000 Energy costs 26000 Interest paid 2000 Drawings 27000 Premises 250000 Equipment at cost 80000 Depreciation a/c 30000 Long-term loan 40000 Capital a/c 270000 784000 ====== 784000 ====== Additional information 1) Inventory was valued at 28000 2) Insurance expenses prepaid amounted to 2000 3) Payroll costs owing amounted to 3000 4) Equipment is to be depreciated at 25% pa on cost Required: a) Prepare the statement of profit and loss account for the year ended 28th October 2019(16 marks) b) Prepare the statement of financial position as at 28th October 2020 (9marks) Question Two The following transactions were extracted from the books of Bandana co ltd. in the month of January Jan. 01 credit purchase from Abacus Limited, Invoice no.100 500 Jan. 02 credit purchase from Bernards Invoice no. 101 600 Jan. 04 credit purchase from Chaplin & Co Invoice no. 102 700 Jan. 06 credit purchase from Bernards Invoice no. 103 400 Jan. 10 credit purchase from Abacus Limited Invoice no. 104 500 Jan. 14 credit purchase from Chaplin & Co Invoice no. 105 800 Jan. 18 credit purchase from Abacus Limited Invoice no. 106 700 Jan. 21 credit purchase from Chaplin & Co Invoice no. 107 1100 Jan. 25 credit purchase from Bernards Invoice no.108 900 Jan. 27 credit purchase from Abacus Limited Invoice no. 109 800 Jan. 31 purchase returns to Abacus Limited debit note no.121 200 Required: (a) Fully record the above transactions in the purchase day book, returns outward journal. (b) State the amount to be debited to the purchases account. (c) Post the above transactions into the relevant individual ledgers accounts. (c) Explain the purpose of day books.