Section B: Long Questions (Total 75 marks) B1. The following trial balance was extracted from the books of Big Mac Limited as at 31 March 2020: Trial Balance as at 31 March 2020 Debit Credit 560,000 240,000 150,000 250,000 410,000 369,000 230,000 112,000 1,368,680 24,000 93,000 253,000 276,000 Ordinary share capital Retained profits, at 1 April 2019 General reserve 8% Debenture, repayable on 1 October 2028 Office equipment Motor vehicles Accumulated depreciation, at 1 April 2019 - Office equipment - Motor vehicles Trade receivables Allowance for doubtful debts, at 1 April 2019 Trade payables Cash Inventory, at 1 April 2019 Sales Purchases Bad debts Directors' remuneration Returns inwards Returns outwards Carriage inwards Carriage outwards Discounts received Rent and rates Salaries and wages Water, electricity and gas Insurance Interim dividend Debenture interest 4,732,000 2,287,000 10,000 50.000 128,000 7,890 36,010 42,020 5,820 678,900 384,600 36,250 25,250 40,000 10,000 6,404,710 6,404,710 The following additional information was provided: (1) Inventory at 31 March 2020 was valued at cost of $272,000. (2) Rent included $60,000 paid for the period from 1 February 2020 to 30 April 2020. (3) Depreciation was to be provided for non-current assets as follows: Office equipment 15% per annum using straight-line method Motor vehicles 15% per annum using reducing balance method An amount of $32,680 owed by a customer had been written off as bad debts. However, bad debts of $10,000 only was provided in the books. On 31 March 2020, the board of directors had decided to transfer $100,000 from current year's profit to general reserve. Insurance and audit fees of $11,000 and $5,250 respectively were unpaid and unrecorded at 31 March 2020. Allowance for doubtful debts at 31 March 2020 was estimated to be $29,000. Debenture interest for the second half of the financial year had not been paid for and recorded. Carriage outwards in the amount of $12,000 were mistakenly included as salaries and wages. No adjustment entries in the books have been made. (10) Income tax for the year was estimated at $41,242. Required: Prepare, for Big Mac Limited, (a) a statement of profit or loss and other comprehensive income for the year ended 31 March 2020; and (25 marks) (b) a statement of financial position as at 31 March 2020. (20 marks) (Total 45 marks)