SECTION A COMPULSORY QUESTION 1 [40 MARKS] John, a sole trader, prepared the following trial balance at 30 April 2019. DEBIT 6. One half of the 10% loan is repayable during the year ended 30 April 2019 and the balance two months after 30 April 2019. 7. Depreciation is to be provided as follows: Equipment 10% per annum on cost Motor vehicles 25% diminishing balance method There were no additions and disposals during the year. CREDIT $ REQUIRED (a) Prepare an Income Statement for the year ended 30 April 2019 [19 marks) 8,000 12,000 6,600 28,000 4,000 12,000 9,800 400 12,400 5,200 7,200 88,000 (b) Prepare a Statement of Financial Position as at 30 April 2019. 7,600 Rent and rates General expenses Insurance Wages and salaries Heat and light Drawings and capital Motor expenses Bad debts Trade receivables and trade payables Cash at bank Inventory at 1 May 2018 10% Loan Loan interest paid Carriage outwards Commission received Purchases and Revenue Purchases returns and sales returns Discount allowed and discount received Provision for doubtful debts Equipment at cost Provision for depreciation on equipment 1 May 2018 Motor vehicles at cost Provision for depreciation on motor vehicles 1 May 2018 [15 marks] (c) Discuss, with examples, any three qualitative characteristics of financial information [6 marks) 30,000 2,500 1,400 112,000 9,600 1,200 1,460 216,000 5,000 800 1,040 96,000 28,800 72,000 400,300 21,600 400,300 ADDITIONAL INFORMATION 1. The closing inventory at 30 April 2019 was valued at $ 8,400. 2. At 30 April 2019, Loan interest owing amounted to $500 Heat and light outstanding was $ 760 Insurance was prepaid by $920 3. During the year, John had withdrawn, for his own use, goods costing $3,600. This has not been recorded in the accounts. 4. Commission receivable of $300 was owing to John at 30 April 2019. 5. The provision for doubtful debts is to be 2% of the trade receivables