The following balances were extracted from the books of Canadian Mongrel as at February 28, 2021. He is a sole trader who operates a clothing wholesale business. At the beginning of the year Rex Rufus rented a very small section of the store for $5,000 per month.

Year end notes:

a) Depreciate Buildings at 8% per annum on the straight line basis, the motor vehicles at 20% per annum on the reducing balance basis and Land at 2% on the straight line basis

b) Wages in arrears at February 28, 2021 were $11,480.

c) Stock at February 28, 2021 amounts to $8,400, however it appears that an additional amount, $1,700 was found in a store room. The amount was deemed material and should be accounted for.

d) The insurance paid represents the amount for the period March 1, 2020 to May 31, 2021.

e) On November 1, 2020, the owner took merchandise amounting to $500 from the clothing store and continued to do so at the beginning of every month up to March 2021.

f) The Provision for bad debts is maintained to reflect 5% of accounts receivable at the financial year end of the business.

Required:

1. Prepare the Statement of Profit or Loss for Canadian Mongrel, with appropriate headings (30 marks)

2. Prepare a Statement of Financial Position for Canadian Mongrel, with appropriate headings (20 marks)

The following balances were extracted from the books of Canadian Mongrel as at Februar 2021. He is a sole trader who operates a clothing wholesale business. At the beginning of year Rex Rufus rented a very small section of the store for $5,000 per month. PARTICULARS DR CR Capital 104,000 Drawings 12,000 Land 160,000 70,000 Buildings Provision for Depreciation: Building Motor Vehicles 33,600 36,000 Provision for Depreciation: Motor Vehicles Accounts payable 10,840 18,000 Accounts receivable 13,300 9,700 Stock March 1, 2020 Bank 28,800 Cash 4.160 Purchases 58.200 Sales 140.000 Returns 10.180 8.730 Long-term Loans 130.000 Rental income from Rex Rufus 50.000 Discounts 3,400 2,200 Provision for Bad Debts 1.190 Stock, March 1, 2020 9,700 Bank 28,800 Cash 4,160 Purchases 58,200 Sales 140,000 Returns 10,180 8,730 Long-term Loans 130,000 Rental income from Rex Rufus 50,000 Discounts 3,400 2,200 Provision for Bad Debts 1,190 Insurance 50.000 2,200 Carriage Inwards Carriage Outwards 1.800 98,520 Wages Sundry Expenses Bad Debts 10,400 2.500 Interest Income 15,000 542 360 542.360 Year end notes: Bad Debts 2,500 Interest Income 15,000 542,360 542,360 Year end notes: a) Depreciate Buildings at 8% per annum on the straight line basis, the motor vehicles at 20% per annum on the reducing balance basis and Land at 2% on the straight line basis b) Wages in arrears at February 28, 2021 were $11,480. c) Stock at February 28, 2021 amounts to $8,400, however it appears that an additional amount, $1,700 was found in a store room. The amount was deemed material and should be accounted for d) The insurance paid represents the amount for the period March 1, 2020 to May 31, 2021. e) On November 1, 2020, the owner took merchandise amounting to $500 from the clothing store and continued to do so at the beginning of every month up to March 2021. f) The Provision for bad debts is maintained to reflect 5% of accounts receivable at the financial year end of the business. Required: 1. Prepare the Statement of Profit or Loss for Canadian Mongrel, with appropriate headings (30 marks) 2. Prepare a Statement of Financial Position for Canadian Mongrel, with appropriate heading (20 marks)