The following information was extracted from the books of Caribbean National Baking Supplies Limited located at 45 Maxfield avenue Kingston 5 for the period ending December 31, 2022

PARTICULARS	DR($)	CR($)
2,000,000 Ordinary shares$ 2. each)		4,000,000.
Share Premium Reserve		650,000
Motor Vehicles at cost	2,500,000
Building at cost	2,300,000
Office Furniture and Fixtures at cost	1,700,000
Machinerv at cost	1,200,000
Purchases	2,200,000
Sales		5,800,000
7.5 % Preference shares of $1 each		1,600,000
Salaries & Wages	1 ,300,000

Returned earning previous year		740 000
Electricity	400,000
Water	120,000
Opening Stock January 1,2020	140,000
Telephone	90,000
Director Remuneration	250,000
Bad Debt written off	140,000
Provision for Bad debt		80,000
Debtors & Creditors	520,000	450,000
C:i$hat Bank - NCB	810,000
Bank Overdraft - BNS		350,000.
TOTAL	13,670,000	13,670,000

The following additional information is available:

1. Authorize share capital is 5,000,000 $1.50 ordinary shares and 2,000,000 $1 preference shares.
2. Closing stock amounted to $250,000.00 as at December 31,2022
3. A dividend of 6 cents per share is proposed for ordinary shareholders.
4. The preference shareholders are to be paid their dividends.
5. Electricity bill unpaid at December3l, 2022 was $27,500.00.
6. Provision for bad debt is to be adjusted to 15% of debtors on the books as at December 31,2022
7. The Depreciation policy for all assets is to be calculated as follows using the straight-line

method:

• Motor Vehicle 20% p.a.
• Building 2%
• Office Furniture and Fixtures] 0%
• Machinery 10%
• 8) Included in the bad debt figure in the trial balance is the Sum of $40,000 which was written off a debtor Paul Green account. Paul subsequently turned up with a BNS cheque in the amount of $45,000 to settle the outstanding balance on his account. This adjustment must be reflected in the year end finical Report.

9) Bank charges and other user fees in the amount of $30,500 were reflected in the BNS bank statement at the end of the financial year and the financial director wanted this adjustment to be reflected in the financial report at the end of the accounting period.

Task A

1. Prepare the statement of comprehensive Income for the period ending December31,2022
2. Prepare the statement of financial position as at December 31, 2022

TASk B

Assume purchases and sales are all on credit terms.

1. Calculate the following ratios for Caribbean National Baking Supplies Limited at the end of the financial period December 31, 2022:
   1. The gross profit margin
   2. The net profit margin
   3. Asset turnover
   4. Current ratio
   5. Quick asset ratio
   6. Debtors' collection period
   7. Creditors' payment period
   8. Stock turnover ratio

Task C

The management team is considering changing the method of depreciation used to depreciate the business fixed assets from the straight- line method to the reducing balance method. Write a letter to the management team explaining the difference between straight-line and the reducing balance method of depreciation and the formulas used to calculate depreciation using both methods. You are also required to state two advantages each when using either method.

Task D

Included in the trial balance debtors' figure is an amount owed by max traders limited located at 20 West

Avenue Kingston 10, for goods purchase on April 15, 2022, valued one hundred and thirty thousand dollars $130,000. Max traders has not make any payment on their account to date. They were given thirty days (30) credit period. As the accounting officer write a letter to this customer clearly stating the number of days their account is in arrears as at the end of the accounting period. Interest and penalties are charge at a rate of 10% on all outstanding balance owed must be highlighted in the letter.