(20) QUESTION 3 The trial balance, adjustments and additional information given below were extracted from the accounting records of Mkhize Traders on 28 February 2017, the end of the financial year. FINANCIAL STATEMENTS REQUIRED Prepare the Statement of Financial Position of Mkhize Traders as at 28 February 2017. The notes to the financial statements are not required. Where applicable, show calculations in brackets. INFORMATION CONCHA TRADERS PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017 Credit (R) Debit (R) Balance sheet accounts section Capital Drawings Vehicles at cost 162 000 70000 180 000 120 000 Equipment at cost 90 000 Accumulated depreciation on vehicles Accumulated depreciation on equipment Trading inventory 38 000 70 000 32 000 Debtors control 4 000 Provision for bad debts 22 000 Bank 2 000 40 000 Cash float 80 000 Creditors control Mortgage loan: Aries Bank (16% p.a. ) 33 PROGRAMME HANDBOOK: JANUARY 2019 INTAKE MANCOSA: HIGHER CERTIFICATE IN ACCOUNTING Nominal accounts section Sales 485 000 240 000 5 000 Cost of sales Sales returns 84 000 Salaries and wages Bad debts 2000 Consumable stores 28 000 Rent expense 15 000 Bad d ses recovered 2000 7 000 Telephone Electricity and water Bank charges 11 000 3 000 4 000 Insurance 6 000 Interest on mortgage loan Commission income 5 000 906 000 906 000 Adjustments and additional information The net profit according to the Statement of Comprehensive Income, after taking the following into account was R38 970: 1. According to physical stocktaking done on 28 February 2017, trading inventory on hand amounterd te Consumable stores used during the financial year amounted to R1 800, according to a physical count No entry has been made for a commission of 10% earned but not received on 500 items that were sold for R60 each. No entry has been made for a cheque for R600 that was received from an insolvent debtor, J. Marsh who was only able to pay 30 % of her debt . The balance of her account must now be written off as well 2 4. The provision for bad debts must be decreased to R1 500. The telephone account for February 2017 has not yet been paid, R700. The rental agreements signed with the lessor (landlord) are as follows: R30 000 for the period 01 January 2016 to 6 7. December 2016, and R36 000 for the period 01 January 2017 to Make the necessary adjustment. The loan from Aries Bank was obtained on 01 September 2016. Provide for the outstanding interest. (Interest is not capitalised.) R20 000 of the amount owing to Aries Bank will be repaid during the next December 2017. 8 financial year. The insurance total includes an annual premium of R1 800 that was paid for the period 01 June 2016 to 31 May 2017. The bank statement for February 2017 reflected bank charges of R180 that have not yet been recorded. city and water account was debited with an amount of R1 000 for the personal electricity was paid for with a business cheque. 11. account of Provide for depreciation as follows: 12 On equipment at 15% pe 12.2 On vehicles at 25% ner um on cost. An account received from Heidi Motors to replace two tyres on the delivery vehicle of the business, R2 000, has not been recorded. 12.1 diminishing balance. an 13 PROGRAMME HANDBOOK: JANUARY 2019 INTAKE