Section B: Long Questions (Total 75 marks) BI. The following trial balance was extracted from the books of Mac Limited as at 31 October 2019: Trial Balance as at 31 October 2019 Dr. Cr. 1.476.948 4,349,474 66.554 18.600 25.000 884,500 53,000 13,000 636,000 18,000 30,000 332,400 553,800 Purchases Sales Returns inwards Returns outwards Insurance Wages and salaries Electricity Telephone charges Rent and rates Carriage Debenture interest paid Advertising expenses Trade receivables Trade payables Discount received Cash at bank Allowance for doubtful debts, at 1 November 2018 Machinery, at cost Motor vehicles, at cost Accumulated depreciation, at 1 November 2018 - Machinery - Motor vehicles Inventory, at 1 November 2018 5% Debentures, repayable on 1 July 2030 General reserve Ordinary share capital Retained profits, at 1 November 2018 628,000 20,000 2,364,300 25,400 336,000 605,000 73.840 271.688 255,000 1.200,000 16.000 600.000 446,500 7,649,502 7,649,502 The following additional information is available: (1) Inventory at 31 October 2019 was valued at cost of $204,000. Advertising expenses of S17.600 were unpaid and unrecorded at the year end. Wages and salaries included $22.000 paid for November 2019 in advance. Carriage included $2.280 freight charges for goods purchased from overseas suppliers. The remaining were carriage outwards. (5) Allowance for doubtful debts at 31 October 2019 was estimated to be $33,330. Page 4 of 6 (6) Repairs of machinery in the amount of $8,500 were mistakenly included as cost of machinery. No adjustment entries have been made. Depreciation was to be provided for non-current assets as follows: Machinery 20% per annum using straight-line method Motor vehicles 25% per annum using reducing balance method Income tax for the year was estimated at $100,000. One of the company's customers was confirmed bankrupt and the amount of $1,500 owed to the company had to be written off. No adjustment entries have been made. (10) Debenture interest for the second half of the financial year had not been paid for and recorded. (11) The board of directors had decided to transfer $55,000 from current year's profit to general reserve on 31 October 2019. Required: Prepare for Mac Limited, (a) a statement of profit or loss and other comprehensive income for the year ended 31 October 2019; and (22 marks) (b) a statement of financial position as at 31 October 2019. (23 marks) (Total 45 marks)