The following trial balance has been extracted from Mary's books: Trial balance as at 31st December 2019 '000 '000 46 300 200 10 300 50 120 70 80 650 Bank Inventory as at 1/01/2019 Trade receivables Allowance for trade receivables Trade payables Rent Wages and salaries Telephone Electricity Purchases Sales Plant and machinery at cost Plant and machinery - accumulated depreciation as at 1/01/2019 Office equipment at cost Office equipment - accumulated depreciation as at 1/01/2019 Debenture interest 8% Debentures, redeemable 2024 Equity 1600 700 170 300 110 4 100 230 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 Mary's 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 November- December 2019. 7. Taxation for the year is estimated to be 60,000. Question 1 continued overleaf PTO Page 2 of 6 BMAN10621B Question 1 continued 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) 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) Total: 40 Marks