The following trial balance has been extracted from Marys books: Trial balance as at 31st December 2019 '000 '000 Bank 46 Inventory as at 1/01/2019 300 Trade receivables 200 Allowance for trade receivables 10 Trade payables 300 Rent 50 Wages and salaries 120 Telephone 70 Electricity 80 Purchases 650 Sales 1600 Plant and machinery at cost 700 Plant and machinery - accumulated depreciation as at 1/01/2019 170 Office equipment at cost 300 Office equipment - accumulated depreciation as at 1/01/2019 110 Debenture interest 4 8% Debentures, redeemable 2024 100 Equity 230 2520 2520 The following information is also available:

1. Inventory as at 31st December 2019 was 200,000.

2. On 21st December 2019 it was discovered that a debtor owing 20,000 had gone into liquidation.

3. It is the policy of Marys to make an allowance for trade receivables of 5% of trade receivables.

4. The depreciation methods used are: i. Plant and machinery 40% reducing balance ii. Office equipment 20% straight line

5. 20% of the rent paid this year is for the period January-March 2020.

6. An electricity bill for 20,000 arrived on 12th January, covering the period NovemberDecember 2019.

7. Taxation for the year is estimated to be 60,000.

Required:

a) Prepare an income statement for the year ended 31st December 2019 (14 marks)

b) Prepare a statement of financial position as at that date (11 marks)

c) Outline the relative purpose and value of the following three primary statements: i) Statement of financial position ii) Income statement iii) Cash flow statement (6 marks)

d) What are the main criteria for recognising revenue from the sale of goods? (3 marks)

e) Book value and market value are often different. Provide 3 reasons why this is the case. (6 marks)