The following trial balance was extracted from the books of Makem Ltd. as at 30 September 2019: Debit Credit Ordinary shares 1 each 500,000 Share Premium account 200,000 10% Debentures 150.000 Retained Profits 1st October 2018 76,600 Buildings (Cost 800,000) 550,000 Machinery (Cost 730.000) 480.000 Equipment (Cost 250,000) 120.000 Returns Inwards 8,400 Returns outward 5.000 Inventory 15 October 2018 198,300 Purchases / Revenue 901.400 2.070.600 Trade receivables 107,500 69,800 Trade payables Provision for doubtful debts 2.700 Bank 66,200 Rent and rates 62,400 General expenses 23,500 Wages and salaries 525,600 Repairs expenses 31,400 3.074.700 3.074.700 The following additional information is available: 1. 2. 3. 4. 5. Inventory on hand 30th September 2019: 195.000 A customer has gone bankrupt after the year end and you are advised to write off the full balance owing 5,500 The provision for doubtful debts should be 5% of closing trade receivables. Wages and salaries due at the year's end are 30,600. Wages and salaries and general expenses are to be included in distribution expenses, all other expenses are considered to be administration expenses. Depreciation is provided on assets held at Statement of Financial Position date as follows: (i) Buildings: 2% on cost straight-line. Machinery: 25% reducing balance. Equipment: 10% reducing balance. 6. The depreciation on buildings should be charged to cost of sales, depreciation on machinery should be charged to distribution expenses, and depreciation on equipment is to be charged to administration expenses. 9. The corporation tax charge for the year is estimated at 80,000. Page 2 of 7 Requirement: Prepare for Makem Ltd, in a form suitable for publication: (a) The Statement of Profit or Loss and other Comprehensive Income for the year ending 30th September 2019 and the Statement of Financial Position as at that date, in so far as the information provided permits. (32 marks) You are required to submit workings to show the make-up of the figures in the Statement of Comprehensive Income and the Statement of Financial Position (b) The "Duality concept is an important concept when recording financial information in the records. Requirement: Explain the duality concept and give an example of its use when recording financial transactions. (8 marks) Total Question 1: (40 Marks) Page 3 of 7