The following trial balance was extracted from the books of Maya Boutique as at 31 December 2019.

The following adjustments needs to be considered:

1. The shop rental is RM1,000 per month. It was paid in advance for two months.
2. Salary for fashion designer amounting to RM1,500 still unpaid.
3. Interest on loan from bank for half a year was outstanding.
4. One of the customers was declared bankrupt and unable to settle his debts. The customer still owed RM2,000.
5. Allowance for doubtful debts on accounts receivable need to be provided at 5%.
6. An annual depreciation needs to be provided as follows:

Delivery van - 20% on cost

Costumes cabinet - 10% on reducing balance method

Office equipment - 10% on cost

7. Ms Mayalini, the owner, withdrew petty cash of RM100 and took a dress amounting to RM200 for her daughters birthday.
8. Inventory as at 31 December 2019 was RM16,000.

Required:

1. Prepare the Statement of Profit or Loss for the year ended 31 December 2019.
2. Prepare Statement of Financial Position as at 31 December 2019.

(WOULD BE APPRECIATED IF YOU CAN EXPLAIN ALL THE ADJUSTMENTS)

Debit Credit RM RM Beginning inventory 40,000 4,000 6,000 Sales and purchase return Carriage inwards 7,000 Duty on purchases 5,600 Carriage outwards 4,400 Purchases and sales 160,000 300,000 Discount received 6,400 Insurance on purchases 5,400 Commission received 4,600 Shop rental 28,000 salary 33,000 Salesman commission 2,600 Discount allowed 5,200 Interest expense 5,000 Allowance for doubtful debts 1,000 Accumulated depreciation: 28,000 Delivery van Costumes cabinet Office equipment 12,000 10,000 Delivery van 70,000 Costumes cabinet 60,000 Office equipment 100,000 Accounts receivables 50,000 Accounts payable 40,000 Telephone and electricity 10,000 Insurance 9,000 Cash at bank 50,000 3,000 Petty cash Loan from bank (10% per annum) 100,000 Drawings 600 capital 144,800 652.800 652,800 Debit Credit RM RM Beginning inventory 40,000 4,000 6,000 Sales and purchase return Carriage inwards 7,000 Duty on purchases 5,600 Carriage outwards 4,400 Purchases and sales 160,000 300,000 Discount received 6,400 Insurance on purchases 5,400 Commission received 4,600 Shop rental 28,000 salary 33,000 Salesman commission 2,600 Discount allowed 5,200 Interest expense 5,000 Allowance for doubtful debts 1,000 Accumulated depreciation: 28,000 Delivery van Costumes cabinet Office equipment 12,000 10,000 Delivery van 70,000 Costumes cabinet 60,000 Office equipment 100,000 Accounts receivables 50,000 Accounts payable 40,000 Telephone and electricity 10,000 Insurance 9,000 Cash at bank 50,000 3,000 Petty cash Loan from bank (10% per annum) 100,000 Drawings 600 capital 144,800 652.800 652,800