requirements on first page and data on ther two pages

Requirements: (a) Prepare the statement of profit or loss for the year ended 31 December 2020 of N. Heavey and the statement of financial position as at that date. (b) 'Assets are recognised in the balance sheet when it is probable that the future economic benefits will flow to the entity and the asset has a cost or value that can be measured reliably. A friend, who has not studied accountancy, has read this definition and is confused by it. Describe to your friend what is meant by the above definitions Question two: The following is the trial balance extracted from the books of N. Heavey on 31.12.20. 160,000 40,000 110,000 48,000 28,000 9,600 2,800 35,250 345,000 270,750 6,000 21,625 1,800 Capital.. 10% Term Loan Land... Motor Vehicles Plant & Equipment Accumulated Depreciation Motor Vehicles ..... Accumulated Depreciation Plant & Equipment Inventory at 1.01.20 Sales Purchases Returns Wages & Salaries Rent Rates... Motor Expenses General Expenses Interest Repayments on Term Loan Discount. Carriage inwards. Insurance Provision for bad debts Receivables Prepayment as at 1.1.20 VAT Payables Bank.. 4,000 3,000 8,150 35,000 5,000 825 1,700 6,000 1,700 24,300 850 1,300 34,550 2.050 603,625 603,625 You are given the following additional information: 1. Inventory at 31.12.20 is 38,000 2. Bad debts of 290 are to be written off. The provision for bad debts is to be 8% of Receivables. 3. Depreciation is to be provided on assets on hand at 31.12.20 at the following rates: Motor Vehicles 20% Straight Line Plant and Equipment 10% Reducing Balance 4. The sales amount included within the trial balance is inclusive of VAT of 10,000. The purchases figure also includes an amount for VAT of 15,000. N. Heavey is registered for VAT. 5. The term loan was taken out on 1 January 2020. 6. N. Heavey took goods costing 3,500 for his own use during the year, along with cash in the amount of 800. No entries has been made to record this. 7. A motor vehicle was sold on 31 December 2020. It has initially cost 3,000 and had accumulated depreciation to date of 1,500 (i.e. on 31 December 2020). Proceeds of 2,000 were received (via cheque) in respect of the sale. This sale has not been reflected in the balances given in the trial balance. 8. An accrual is to be made in respect of insurance expenses in the amount of 2,000 as at 31 December 2020. The prepayment listed in the trial balance also relates to insurance costs. 9. Rate costs in the amount of 500 were prepaid as at 31 December 2020