QUESTION 1 Adekunle & Sons Nigeria Limited is a manufacturing company based in Kano. The company prepares its financial statements to 31 December each year. The following information relates to the year ended 31 December 2023: (i) The company pays rent of N3,600,000 per annum for its factory premises. Rent is paid quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The cash book shows total rent payments of N4,500,000 during 2023. (ii) Electricity bills are received quarterly in arrears. The bill for the quarter ended 30 November 2023 amounted to N480,000 and was paid in December 2023. No bill had been received for December 2023 as at the year-end. Based on the previous quarter's bill, electricity cost is estimated at N160,000 per month. (iii) The company took out a one-year insurance policy on 1 September 2023 and paid a premium of N720,000 in full on that date. (iv) Staff salaries for December 2023 amounting to N1,200,000 were not paid until 15 January 2024. Required: (a) Explain the accruals concept as required by IAS 1 – Presentation of Financial Statements and state why it is important in the preparation of financial statements. (5 marks) (b) Calculate the amounts to be recognised in the Statement of Profit or Loss for the year ended 31 December 2023 in respect of each of items (i) to (iv) above. (10 marks) (c) Prepare the relevant extracts from the Statement of Financial Position as at 31 December 2023, showing all accruals and prepayments arising from items (i) to (iv). (5 marks) (Total: 20 marks)