SECTION A- [COMPULSORY] Additional information: 1. Depreciation policies: Question 1 [40 Marks] John Hanning owns a small hotel. The following balances were taken from his books on 31 December 2016 The fixtures and fittings should be depreciated at 15% on cost. The minibus should be depreciated at 20% of the written down value. 2. $ Takings (Sales) $3,000 of the total for the purchase of food and wine was in respect of food used by Larsen and his family. Stock of wine at 31 December 2016 was $1,340. 283,670.00 3. Premises, at Cost 396,000.00 4. Bank interest of $280 had accrued at 31 December 2016. Fixtures and Fittings at cost 100,000.00 5. Minibus Advertising, costing $900, had been paid in December 2016. This was for advertising leaflets to be published in 2017. 10.000.00 Provision for depreciation, 1 January 2016: Fixtures and fittings 6. Bad debts, $1,190, were to be written off. 45,600.00 Minibus 3,600.00 REQUIRED Stock of wine, 1 January 2016 1,200.00 Debtors (a) 6,500.00 Prepare the Income Statement for the year ended 31 December 2016. [20 Marks] Creditors 3,970.00 Bank overdraft (b) 16,450.00 Prepare the Statement of Financial Position as at 31 December 2016. [20 Marks] Cash in hand 700.00 Wages 61,020.00 Cleaning 27,830.00 Purchase of food and wine 121.700.00 4,800.00 Running expenses of minibus Bank interest (Dr Balance) 1,520.00 Advertising 5.880.00 General expenses 13,140.00 Capital 427,000.00 Drawings 30,000.00