The following trial balance has been extracted from the ledger of Den Hunt, a sole trader, as at 31 October 2021, the end of his most recent financial year. Credit Debit 108,000 76,000 18,000 15,200 32,000 296,000 472,000 3,710 4,760 Vehicles, at cost Furniture and fittings, at cost Provision for depreciation (as at 1 November 2020) - Vehicles - Furniture and fittings Inventories as at 1 November 2020 Purchases Sales revenue Discounts allowed Discounts received Wages and salaries Rent Loan interest Carriage outwards Carriage inwards Other operating expenses Trade receivables Trade payables Provision for irrecoverable receivables Cash on hand Bank overdraft Drawings 5-year bank loan Capital, as at 1 November 2020 55,760 18,000 600 5,650 4,260 42,200 59,800 46,390 450 250 21,930 30,500 24,000 130,000 732,730 732,730 The following additional information as at 31 October, 2021 is available: 1. Inventories as at the close of business were valued at 36,400. Included in the inventory are damaged goods valued at 400 with a resale value of 200 2. Depreciation for the year ended 31 October 2021 has yet to be provided as follows: Vehicles: 25% per annum using the reducing balance method. Furniture and fittings: 20% per annum using the straight-line method No non-current assets were bought or sold during the financial year 3. Wages and salaries are accrued by 240. 4. Rent of 1,500 was paid on the 6 September 2021 for the quarter ended 31 December 2021. 5. Loan interest of 600 for the six months ending 31 October 2021 has yet to be paid. 6. An irrecoverable receivable/bad debt of 1,800 is to be written off and the allowance for irrecoverable receivables is to be adjusted to 1% of trade receivables at 31 October 2021 7. Den Hunt drew out 500 from the business bank account for his own personal use on the 31 October 2021. The transaction has not been recorded in the ledgers of the business. 1a) Prepare the following financial statements for Den Hunt: Statement of profit or loss for Den Hunt for the year ending 31 October 2021 (28 marks) Statement of financial position for Den Hunt as at 31 October 2021 (26 marks) 1b) Explain, supported by an example for each, the following concepts that should be adopted when preparing the financial statements of a business. You are to refer to your financial statements from 1a) when providing an example (16 marks) I. II. III. IV. Historic cost concept Matching concept Prudence concept Consistency concept