AF-01 · Accounting Fundamentals · Long-form (15 marks) Priya Nair is a sole trader. Her trial balance at 31 December 2026 contains the following (£): sales 412,000; purchases 238,000; opening inventory 31,000; wages 62,000; rent 24,000; other expenses 9,000; irrecoverable debts already written off 1,800 (included in the receivables below); trade receivables 47,000; allowance for receivables brought forward 1,500; plant at cost 80,000 with accumulated depreciation brought forward 24,000. Adjustments: (1) closing inventory at cost is £36,500; (2) wages of £2,000 are owed at the year end; (3) £4,000 of the rent relates to 2027; (4) plant is depreciated at 20% per year on the reducing-balance method; (5) the receivables allowance is to be 5% of receivables after the write-off above (the £1,800 write-off has NOT yet been deducted from the £47,000). (a) Calculate cost of sales. [2 marks] (b) Calculate the combined wages and rent charge for the year. [3 marks] (c) Calculate the depreciation charge for the year. [2 marks] (d) Calculate the total charge for irrecoverable debts and the change in the allowance for receivables. [3 marks] (e) Calculate net profit for the year. [3 marks] (f) Explain in two or three sentences why closing inventory is valued at the lower of cost and net realisable value. [2 marks]