Question 2 The following trial balance has been provided for the Prost business for the year ending 31st December 2021. DR (E) CR (E) 2,700 1,850 Items Returns In Water Bill Accounts Receivable Salaries Bad Debts 42,000 76,000 960 1,485 1.920 Loan Interest Allowance for doubtful debts Machinery Mortgage Carriage in 180,500 421,000 1,840 Loan 5% per annum 39,600 5,450 5,300 Returns out Rent Received Insurance Carriage Out Accumulated Depreciation - Premises 10,000 1,860 69,000 Purchases 131,600 36,400 Opening Inventory Sales 444,500 Premises 1,915,000 Bank 58,900 Cash 4,150 Drawings 2,200 1,460,093 15,082 Capital Accumulated Depreciation - Machinery Accounts Payable TOTALS 5,500 2,467,445 2,467,445 End of Year Adjustments The closing inventory at 31st Dec 2021 is 24,300. The premises are to be depreciated at 3% straight line method. The machinery is to be depreciated at 8% reducing balance method. The Water Bill is pre-paid E280. Salaries amounting to 3,500 are owing to be accrued. The interest rate on the loan for the year is 5 % per year. There are 3 months owing on the loan interest, to be accrued. The allowance for doubtful debts is set at 10% of accounts receivable. It is advised that you draw up an Income Statement and a Balance Sheet from the information given above in order to answer the following questions. Answer the following regarding the Income Statement: 2.1) What are the net sales? 2.2) What is the cost of goods sold? 2.3) What is the Gross Profit? 2.4) What is the total revenues (excluding sales)? 2.5) What is the depreciation expense for the premises this year? 2.6) What is the depreciation expense for the machinery this year? 2.7) What is the Water Bill expense for the Income Statement? 2.8) What is the salaries expense for the income Statement? 2.9) What is the loan interest expense for the income Statement? 2.10) What is the allowance for doubtful debts for the income statement? 2.11) Is the allowance for doubtful debts an expense or a revenue in this case? 2.12) What are the total expenses? 2.13) What is the net profit recorded by the company for 2021? Answer the following regarding the Balance Sheet: 2.14) What is the Accumulated Depreciation on the premises to be reported in the Balance Sheet? 2.15) What is the Accumulated Depreciation on the machinery to be reported in the Balance Sheet? 2.16) What is the total value of the fixed assests to be reported in the Balance Sheet? 2.17) What is the value of the accounts receivable to be reported after the allowance for doubtful debts has been considered? 2.18) What is the total of the pre-paid assets to be recorded in the current assets? 2.19) What is the total for the current assets? 2.20) What is the total of the accrued expenses to be recorded in the current liabilities? 2.21) What is the total for the current liabilities? 2.22) What are the net assets? 2.23) What is the re-calculated capital