ACCOUNTING PAP GRADE 11 The gross salary of one of the employees was understated by R5 000. His pension deduction is calculated at 7% of his gross salary. No adjustment is required in respect of medical aid as all employees pay a fixed amount. The employer contributes R2 for every R1 paid by the employee towards pension. The necessary adjustment needs to be made. 5 Bank charges for February 2019, R4 100, have not been recorded. 6. A physical stock-take on 28 February 2019, revealed the following: Stock to the value of R2 400 could not be accounted for. Consumables that were not used during the current period amounted to R3 400. Stationery used R62 700. 7. Provision for bad debts must be increased with R450. 8. Interest on loan is capitalised but has not yet been entered. The loan statement from ABC Bank reflects: Balance on 1 March 2018 R500 000 Loan repayments during the year R126 000 Balance on 28 February 2019 R440 000 9. Advertising includes an amount of R27 000 paid for six advertisements in the Daily News. By 28 February 2019 only three of these advertisements had appeared in the newspaper. 10. The debtors' account of D Giggs, R6 000, must be written off. 11 . The rent increases every year on 1 September with 10%. Rent for February 2019 is still outstanding. Rent was R12 500 per month before the increase. 12. Interest on overdraft for February 2019, R1 570, has not been entered. 13. Depreciation for the year amounted to R45 000. 14. The net profit for the year after all the adjustments had been considered, was R1 311 455. 15. Sundry expenses is the missing figure that needs to be calculated.2.2 INCOME STATEMENT Required: You are provided with information relating to BB Spaza. Prepare the Income Statement for the year ended 28 February 2019. (35) Information: Extract from the Trial Balance as at 28 February 2019 DEBIT CREDIT Sales (IZYEMME | INCOME . 9 690 000 Cost of sales 6 800 000 Debtors Allowances 140 000 Stationery 65 000 Bank charges 96 400 Rent Income 143 750 Advertising 45 000 Bad debts 16 000 Sundry Expenses ? Interest on fixed deposit 8 750 Commission income 48 250 Bad debts recovered 4 300 Discount received 7 100 Discount allowed 4 500 Salaries and wages 960 000 Pension contribution 80 000 Medical aid contribution 53 400 Consumables 32 100 Municipal charges 70 000 Telephone 92 000 Adjustments and additional information 1 . One of the debtors whose account had been written off a long time ago returned. He paid the amount he owed, R2 800. - BAD Discount on an unpaid cheque has not been cancelled, R300. During the year, some stock, R24 500, and consumables, R2 200, were destroyed in a fire. The insurance covered 75% of the loss on the trading stock. The money has been received. The consumables are not covered in the insurance policy. No entries had been made.ACCOUNTING PAPER 1 GRADE 11 ANSWER BOOK QUESTION 2.2 INCOME STATEMENT FOR YEAR ENDED Sales (9 690 000 (6 800 000) Cost of sales Gross profit Other operating income Rent income (143 750 Commission income 48 250 Bad Debts recovered (4 300 Discount Received 7 100 Gross operating income Operating expenses Stationery Bank charges (96 400 Advertising (45 000 Bad Debts (16 000 Sundry Expenses Discount allowed (4 500 Salaries and wages (960 000 Pension contribution (80 000 Medical aid contributions 53 400 Consumables (32 100 Municipal charges 70 000 Telephone 92 000 Depreciation 45 000 Operating profit Interest income 8 750 Profit before interest expense Interest Expense Net profit for the year 1 311 455 35 40 P.T.O
