QUESTION Singh and Co ended their last financial year on the 31 December 2021. The following unadjusted trial balance was prepared for Singh and Co as at 31 December 2021: Debit Credit $ $ Long Term Investment 400,000 Delivery Vans: Cost 160,000 Accumulated Depreciation as at 1 January 2021 64,000 Shop Fittings: Cost 30.000 Accumulated Depreciation as at 1 January 2021 3,000 Inventory as at 1st January 2021 144,600 Trade Receivable 330,720 Provision for Doubtful Debts 1 Jan 2021 9,500 Bad Debts 10,000 Bank Overdraft 50,000 Trade Payable 120,190 Retained Profit as at 1 January 2021 135,040 Term Loan-Due June 2025 40,000 Loan Interest 2,000 Rent Expense 120,000 Business Insurance expense 39,000 Telephone expense 6,100 Salary expense 85,000 Utilities expense 17,600 Advertising expense 10,500 Sales Purchases 1,766.590 997,700 Capital 164,900 Total 2,353,220 2,353,220 2 1. The inventory was valued at $200,000 as at 31 December 2021 at sales value. Included in the closing stock were some damaged goods costing $5,000. These goods were subsequently sold in January 2022 for $4,000. Transportation cost of $500 was incurred. The company profit margin is 50%. 2. The business insurance accounts reflects insurance premium paid for twelve months starting from 1st March 2021. 3. A Bad Debt of $5,000 is to be written off and a provision of 1% against the remaining trade receivable as at 31 December 2021 should be reflected at year-end. 4. The unpaid interest on the loan was paid only on 1 January 2022. Interest rate on the loan is 10% per annum. 5. A delivery van, the cost of which is $20,000 and accumulated depreciation of $8,000 was sold in December 2022, the sales proceeds of $20,000 being credited to the sales account. No other entries have been made for this disposal. No depreciation is charged in the year of sale. 6. Depreciation is to be provided at the following rates per annum using the method as indicated. Shop fittings -10% using reducing balance Method. Delivery Vans- On cost using the straight line method. The entire fleet of delivery vans was purchased on the 1st January 2019. Assume zero residual values. 7. The utility expense for the month of December 2021 of $1,500 was unpaid as at 31 December 2021. Required: a) Prepare an Income Statement and a Statement of Financial Position for the financial year-ended 31 December 2021. company. (25 marks) THE END