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The following balances were extracted from the books of FBC Pty Limited on 31 December 2020. Trial Balance as at 31 December 2020 Details Debit

The following balances were extracted from the books of FBC Pty Limited on 31 December 2020.

Trial Balance as at 31 December 2020

Details Debit (P) Credit (P)
Sales 496 000
Purchases 434 000
Sales Returns 6 200
Purchase Returns 7 688
Inventory at 01/01/2020 124 000
Provision for Doubtful Debts 992
Wages and Salaries 37 200
Rates 7 440
Telephone 1 240
Shop Fittings at Cost 49 600
Van at Cost 37 200
Accounts Receivables 12 400
Accounts Payables 8 680
Capital 221 960
Bank 3 720
Drawings 22 320
Totals 735 320 735 320

Additional notes

a. Closing inventory as at 31 December 2020 was P148, 800

b. 2% of accounts receivables are to written-off as bad debts.

c. Prepaid rates P620.

d. Increase provision for doubtful debts to 10% of accounts receivables remaining after writing-off bad debts.

e. Telephone expense of P272 was still outstanding at the end of the period.

f. Depreciation policy is as follows: Shop Fittings 10% per annum on Straight line basis. Van 20% per annum on Reducing Balance basis.

Required:

Prepare the Comprehensive Income Statement for the year ended 31 December 2020. (10 Marks)

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