Adjustments and additional information

1.

Physical stocktaking on 28 February 31 December 2020 revealed the following inventories:

1.1

Trading inventory, R90 000

1.2

Stationery, R200.

2.

A notice from the municipality reflected an amount of R200 that was paid for municipal rates for the next financial

year.

3.

Depreciation must be provided for as follows:

3.1 On vehicles, R16 000.

3.2

On equipment, R10 000.

4.

A debtor, who owed R1 000, was declared insolvent. Received R400 of the amount owing from his insolvent

estate. The balance of his account must now be written off. No entries were made for these transactions.

5.

The insurance total includes a premium of R100 that was paid for January 2021.

6.

An amount of R2 000 was due to be paid for audit fees on 02 January 2021.

7.

The provision for bad debts must be increased to R2 200.

8.

Provide for interest on debentures that is yet to be paid, R26 000.

9.

The company tax for the year amounted to R33 000. The profit after tax AFTER taking the above information

into account was R75 700.

10.

The final dividend declared on 31 December 2020 amounted to R50 000

ID Page view A Read aloud Add text (20 Marks) QUESTIONS Prepare the Statement of Financial Position as at 31 December 2020. The notes to the financial statements are not required. Show working in the spaces provided INFORMATION The information given below was extracted from the accounting records of Mertwent Lid on 31 December 2020 (the end of the financial year) MEREWENT LTD PRE-ADJUSTMENT TRIAL BALANCE AS AT 31 DECEMBER 2020 Debit (R) Credit (R) Balance Sheet Accounts Section Ordinary share capital 320 000 Retained earnings 40 000 Land and buildings 540 000 Vehides (cost) 130 000 Equipment (cost) 100 000 Accumulated depreciation on vehicles 50 000 Accumulated depreciation on equipment 40 000 Debentures (10% pa) 260 000 Debtors control 36 000 Provision for bad debts 2000 Bank 23 000 Creditos control 93 000 South African Revenue Services Company tax) 29 000 South African Revenue Services (Company tax) 29 000 Nominal accounts section Sales 757 000 Opening inventory 110 000 Purchases 411000 Sales returns 5 000 Purchases returns 33 000 Carriage on purchases 8 000 Maintenance 7000 Municipal rates 5000 Carriage on sales 10 000 Wages and salaries 80 000 Stationery 1000 Bad debts 2000 Sundry expenses 7000 Insurance 3000 Telephone 7000 Water and electricity 8 000 Directors les 48000 Auditor's fees 5000 5000 Auditor's fees 20 000 Ordinary share dividends 1 595 000 1 595 000 Adjustments and additional information 1 Physical stocktaking on 28 February 31 December 2020 revealed the following inventories: 1.1 Trading inventory, R90 000 1.2 Stationery, R200. 2 A notice from the municipality reflected an amount of R200 that was paid for municipal rates for the next financial year 3 Depreciation must be provided for as follows: 3.1 On vehidles, R16 000 32 On equipment, R10 000 4 A debtor, who owed R1 000, was declared insolvent. Received R400 of the amount owing from his insolvent estate. The balance of his account must now be written off. No entries were made for for these transactions 5 The insurance total includes a premium of R100 that was paid for January 2021 E D Page view l A Read aloud | Add text On equipment, R10 000 A debtor, who owed R1 000, was declared insolvent. Received R400 of the amount owing from his insolvent estate. The balance of his account must now be written off. No entries were made for these transactions. 5. The insurance total includes a premium of R100 that was paid for January 2021. An amount of R2 000 was due to be paid for audit fees on 02 January 2021. 7. The provision for bad debts must be increased to R2 200. 8 Provide for interest on debentures that is yet to be paid, R26 000. 9. The company tax for the year amounted to R33 000. The profit after tax AFTER taking the above information into account was R75 700. 10 The final dividend declared on 31 December 2020 amounted to R50 000 Online Answer Booklet EE 1 A B I E & U X2 x WERT 20 MARKS QUESTION 5 MEREWENT LTD STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 ASSETS Workings (if any) R Non-current assets Current assets Online Answer Booklet 7 A B I SEX U S X2 x2 = I Inventories Trade and other receivables Cash and cash equivalents Total assets Online Answer Booklet lul Will U X2 x ? B 1 EX iti I EQUITY AND LABUITIES Equity Non-current abilities ID Page view A Read aloud Add text (20 Marks) QUESTIONS Prepare the Statement of Financial Position as at 31 December 2020. The notes to the financial statements are not required. Show working in the spaces provided INFORMATION The information given below was extracted from the accounting records of Mertwent Lid on 31 December 2020 (the end of the financial year) MEREWENT LTD PRE-ADJUSTMENT TRIAL BALANCE AS AT 31 DECEMBER 2020 Debit (R) Credit (R) Balance Sheet Accounts Section Ordinary share capital 320 000 Retained earnings 40 000 Land and buildings 540 000 Vehides (cost) 130 000 Equipment (cost) 100 000 Accumulated depreciation on vehicles 50 000 Accumulated depreciation on equipment 40 000 Debentures (10% pa) 260 000 Debtors control 36 000 Provision for bad debts 2000 Bank 23 000 Creditos control 93 000 South African Revenue Services Company tax) 29 000 South African Revenue Services (Company tax) 29 000 Nominal accounts section Sales 757 000 Opening inventory 110 000 Purchases 411000 Sales returns 5 000 Purchases returns 33 000 Carriage on purchases 8 000 Maintenance 7000 Municipal rates 5000 Carriage on sales 10 000 Wages and salaries 80 000 Stationery 1000 Bad debts 2000 Sundry expenses 7000 Insurance 3000 Telephone 7000 Water and electricity 8 000 Directors les 48000 Auditor's fees 5000 5000 Auditor's fees 20 000 Ordinary share dividends 1 595 000 1 595 000 Adjustments and additional information 1 Physical stocktaking on 28 February 31 December 2020 revealed the following inventories: 1.1 Trading inventory, R90 000 1.2 Stationery, R200. 2 A notice from the municipality reflected an amount of R200 that was paid for municipal rates for the next financial year 3 Depreciation must be provided for as follows: 3.1 On vehidles, R16 000 32 On equipment, R10 000 4 A debtor, who owed R1 000, was declared insolvent. Received R400 of the amount owing from his insolvent estate. The balance of his account must now be written off. No entries were made for for these transactions 5 The insurance total includes a premium of R100 that was paid for January 2021 E D Page view l A Read aloud | Add text On equipment, R10 000 A debtor, who owed R1 000, was declared insolvent. Received R400 of the amount owing from his insolvent estate. The balance of his account must now be written off. No entries were made for these transactions. 5. The insurance total includes a premium of R100 that was paid for January 2021. An amount of R2 000 was due to be paid for audit fees on 02 January 2021. 7. The provision for bad debts must be increased to R2 200. 8 Provide for interest on debentures that is yet to be paid, R26 000. 9. The company tax for the year amounted to R33 000. The profit after tax AFTER taking the above information into account was R75 700. 10 The final dividend declared on 31 December 2020 amounted to R50 000 Online Answer Booklet EE 1 A B I E & U X2 x WERT 20 MARKS QUESTION 5 MEREWENT LTD STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 ASSETS Workings (if any) R Non-current assets Current assets Online Answer Booklet 7 A B I SEX U S X2 x2 = I Inventories Trade and other receivables Cash and cash equivalents Total assets Online Answer Booklet lul Will U X2 x ? B 1 EX iti I EQUITY AND LABUITIES Equity Non-current abilities