Notes:1. The Business uses the FIFO Inventory System.2. At December 31, 2021 the Business owed £10,000 in Wages which had notyet been paid.3. The Equipment originally cost £450,000, has a ten year life and is expectedto have a Salvage Value of £50,000 at the end of its useful life.4. Taxation for 2021 is estimated as 30% and to be paid in 2022.Required:(a) Prepare a Statement of Profit or Loss for Allison Ltd for year ended 31stDecember 2021 and a Statement of Financial Position as at that date. The Balances in the Statement of Financial Performance for Allison Ltd at December31* 2020 were as follows.Cash (Dr Balance)Inventory (9 Compressors @ £5,000 each)35,00045,00010,000450,0002,00015,000150,00010,00012,000Accounts ReceivableEquipmentPrepaid RentAccounts PayableAccumulated DepreciationTaxes PayableWages PayableRetained Profit205,000Capital150,000During 2021 the following transactions occurred:January - Paid the Accounts Payable Balance owed to Suppliers at the end of 2020January - Received Accounts Receivable Balance owed by Customers at the end of2020January - Obtained a Loan for $100,000 to be repaid in five years. Interest ischarged at 10% and payable each December 31*February - Purchased 20 Compressors at £6,000 each, 30% in Cash and the balanceof 70% on CreditFebruary - Sold 24 Compressors for £16,000 each, 40% for Cash and the balanceof 60% on accountMarch - Paid Cash for Wages of £36,000April - Paid 2020 taxesMay - Received Cash from Customers who bought Compressors in February £50,000June - Paid £30,000 to Accounts PayableJuly - Paid £8,000 for Rent which is charged at £1,000 per monthAugust - Purchased a one-year insurance policy for £6,000September - Paid £9,000 Advertising for 2021October - Invested further Capital of £30,000November - Paid £12,000 Utility Bill for 2021December - Paid £40,000 for Wages

Name: Notes:1. The Business uses the FIFO Inventory System.2. At December 3
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: Notes:1. The Business uses the FIFO Inventory System.2. At December 31, 2021 the Business owed £10,000 in Wages which had notyet been paid.3. The Equipment originally cost £450,000, has a ten year life and is expectedto have a Salvage Value of £50,0