Section A continued (compulsory): Financial Accounting scenario The Statement of Financial Position (Balance Sheet) of Fenton as at 31 July 2021 is shown below. Fenton Balance Sheet as at 31 July 2021 Fixed assets (NBV) 1,984,000 Current assets: Inventory 23,680 Accounts receivable (debtors) 40,480 Prepaid Insurance 2,240 Cash account 3,200 69,600 Current liabilities: Accounts payable (creditors) 12.480 Accrued rent and rates 1,200 Bank overdraft 9.920 23,600 Net current assets: 46,000 Total assets less current liabilities: 2,030,000 Long-term liabilities: Long-term loan 592,000 1,438,000 Lee: Capital account 1,438,000 For the year ended 31 July 2021, the following transaction details have been extracted from the business books of account: Credit sales and returns: Sales invoices 499,200 Sales credit notes 15,520 Credit purchases and returns: Purchase invoices 252,800 : Purchase credit notes 4,000 A summary of the bank and cash transactions of Fenton, for the year to 31 July 2021 is shown in the 2-column cash book shown below. Detail Balance Bld Sales Receivables (Debtors) Bani Fenton: 2 column cash book Cash Bank Detail 3,200 Balance B/d 11,200 Purchases 468,800 Payables (Creditors) 28,800 Rent and rates Wages Insurance Sundry expenses Long-term loan Drawings Cash Balance dd 43,200 468,800 2,144 20,800 Cash Bank 9,920 7,456 241,600 16,800 14,880 100,800 8,480 8,000 12,800 10,720 28,800 28,800 2,144 20,800 43,200 468,800 Balances Bld Fenton: Year-end adjustments: 1) Inventory at 31st July 2021 has been valued at 24,000. 2) Depreciation should be charged to fixed assets at 10% on the NBV B/fwd. 3) A specific bad debt of 400 should be written off. 4) Discounts allowed to credit customers amounted to 400. 5) The accrual for rent and rates should be increased to 1,400. 6) The prepayment for Insurance decreased to 2,000. 7) The bank payment to the long-term loan account included 720 interest. 8) During the year, Fenton took goods (recorded as purchases) for his personal use, the value (at cost) being 4,320. Required: a. Prepare journal entries to account for the information given above. (10 Marks) b. Prepare the Income Statement (Trading, Profit and Loss account) of Fenton for the year ended 31 July 2021. (10 Marks) C. Prepare the Statement of Financial Position (Balance Sheet) of Fenton as at 31 July 2021. (10 Marks) Show all workings