Financial statements of Evgeni Gifts Ltd

Mr and Mrs Evgeni run a private company, Evgeni Gifts Ltd, selling gifts and Jewellery items from the Far-East. Mr Evgeni has asked you to prepare set of financial statement for the year ended 31 December 2021 as soon as possible. The company’s accountant had to take time off due to health issues. The following balances have been extracted from the records of the company for the year ended 31 December 2021. Audit and Accountancy 1,100 Advertising 1,000 Bank 1,750 Creditors 9,200 Long Term Bank Loan 2,900 Debtors 43,250 Directors remuneration 52,000 Electricity 3,200 Insurance 1,950 Fixtures and Fittings At Cost 120,000 Accumulated depreciation (at 1.1.2021) 45,000 Motor Vehicle At Cost 48,000 Accumulated depreciation (at 1.1.2021) - 2,650 Office expenses 6,300 Ordinary £1 shares (issued and fully paid) 25,000 Profit and loss account (at 1.1.2021) 26,075 Purchases 195,000 Rent and rates 8,200 Sales - 410,000 Stock (at 1.1.2021) 15,200 Wages and salaries 23,500 Bank Interest 375 £520,825 £520,825 Additional Information: 1. Stock at 31st December 2021 valued at cost amounted to £22,500. 2. Depreciation is to be provided on fixtures and fittings at 20% on cost, and at 10% on reducing balance method for motor vehicle. 3. Provision is to be made for electricity for £725. 4. Insurance paid in advance at 31st December 2021 was £525. Required 1. Prepare Income statement for the year ended 31st December 2021. (10Marks) 2. Prepare Balance Sheet as at 31st December 2021. (15 Marks) 3. Identify FIVE accounting concepts that have been applied in the preparation of financial Statements and explain their meaning. (10 Marks)