SECTION B Question 1 Mr. and Mrs. Sharma run a small private company selling swimwear from China Mr. Sharma has asked you to prepare set of financial statement for the year ended 31 December 2020 as soon as possible as the previous accountant left the company at very short notice Cr E 8.900 2.200 De f Audit and Accountancy 500 Advertising 900 Bank 1,500 Creditors Long Term Bank Loan Debtors 41.350 Directors remuneration 8,500 Electricity 2.800 Insurance 1.700 Fixtures and Fittings Al Cost 80,000 Accumulated depreciation (at 1.12020) Motor Vehicle At Cost 25,000 Accumulated depreciation (at 1.1 2020) Office expenses 5,700 Ordinary 1 shares issued and fully paid) Profit and loss account (at 1.12020) Purchases 160,000 Rent and rates 7.500 Sales Stock (at 1.1.2020) 14,000 Wages and salaries 21.000 Bank Interest 200 E370,650 40.000 1,350 20.000 13,200 285,000 E370 650 Additional Information: 1. Stock at 31 December 2020 valued at cost amounted to 18000 2. Depreciation is to be provided on factures and frings at 25% on Cost 10% on reducing balance method for motor vehicle 3. Provision is to be made for electricity for 250 4. Insurance paid in advance at 31 December 2020 amounted to 400 Required 1. Prepare Income statement for the year ended 31st December 2020 (10Maris) 2. Prepare Balance Sheet as at 31st December 2020 (15 Marks) 3. Identity FIVE accounting concepts that have been applied in the preparation of financial Statements and explain their meaning (10 Marks) Total 35 Marks