A Compulsory question QUESTION 1 Jonagold Limited is a Devonshire company that manufactures apple-based beverages. The trial balance for its latest financial year ended 31 December 2020 is given below: Trial balance at 31 December 2020 Debit Sales Purchases Distribution costs: Advertising Sales commissions Postage and packaging Administrative expenses: Wages and salaries Rent and rates Electricity Insurance Debenture interest paid 1 Ordinary share capital Share premium Credit 1,032,000 613,000 20,000 61,000 11,400 36,400 26,000 28,600 5,800 4,000 200,000 40,000 Retained profit at 1 January 2020 178,000 Trade receivables 204,000 Trade payables 99,000 Cash at bank 222,400 Freehold buildings at 1 January 2020: Cost 100,000 Accumulated depreciation 40,000 Fixtures and fittings at 1 January 2020: Cost 232,000 Accumulated depreciation 72,000 8% debentures (repayable in 2025) 50,000 Inventories at 1 January 2020 146,400 1,711,000 1,711,000 You are provided with the following additional information: 1) The cost of inventories at 31 December 2020 was 130,000. 2) The corporation tax charge for the year is estimated to be 45,400. 3) An ordinary dividend of 30,000 was paid on 25 June 2020 but this had not been recorded in the books of the company. 4) The company took out a 10,000 loan and acquired a delivery van on 31 December 2020. This transaction had not been accounted for in the trial balance above. There were no other additions and disposals of non-current assets during the year. Depreciation for the year has yet to be provided for. The company charges depreciation with estimates as follows: Assets Estimated useful life Estimated residual value Freehold buildings 25 years 0 Fixtures and fittings 10 years 12,000 Motor vehicles 5 years 0 All depreciations are to be charged to administrative expenses. 5) A customer who owed the company 10,000, went into liquidation just after the financial year end. The debt is unlikely to be recoverable and should be written off. Of the remaining trade receivables, 10% is estimated to be doubtful and should be allowed for in the accounts. The company lists bad debts under administrative costs. 6) An advertising bill of 5,000 was still outstanding at the year end. 7) The company presents its expenses by function, i.e., cost of sales, administrative costs, distribution costs, and finance costs. Required: (a) Prepare for Jonagold Limited a statement of profit or loss for the year ended 31 December 2020 and a statement of financial position as at that date. (30 marks) (b) Briefly discuss the main differences in the information provided in the financial statements of limited companies and partnerships. (10 marks) (40 marks in total)