Can you please help me with question 1 and 2
The accounting period of GG Traders (Gani and Gerber) ends annually on 30 April. A list of balances and totals in the business' Pre-Adjustment Trial Balance on 30 April 2020 and the adjustments taken into account on this date are provided. (55) REQUIRED: 1. Draw up the Income Statement on 30 April 2020. 2. Post to the following General ledger accounts: 2.1 Current account: Gani 2.2 Appropriation account 3. Should the partners be satisfied with the control of operating expenses? Gerber feel that Gani's drawings are unreasonable. Quote figures to support her opinion. How does this effect the business? 5. The business urgently needs a vehicle which is expected to cost R480 000. In your opinion how should the business finance this vehicle? Give a reason for your answer (2) Gani and Gerber are not happy with their return from this business. Explain to them why, in view of the economic climate, whether they should be / should not be happy. Motivate your answer by referring to the economic fluctuations that was caused by the current virus. (5) INFORMATION: Extract of balances and totals on 30 April 2020: (before any adjustments were taken into account) Capital: Gani Capital: Gerber Current Account: Gani (Cr) Current Account: Gerber (Cr) Drawings Account: Gani Drawings Account: Gerber Land and Buildings R320 000 400 000 2 492 180 460 70 086 600 000 Equipment Accumulated Depreciation on Equipment Trading Stock Debtors Control Provision for bad debts Sales Cost of Sales Debtors Allowances Wages Telephone Stationery Bad Debts Rent Income Water and Electricity Insurance Rates and Taxes Discount Allowed Discount Received Repairs Bank Charges Unemployment Insurance Fund Contribution 260 000 74 000 71 588 62 930 3 080 2 595 080 1 728 000 3 080 320 400 12 884 10 296 3748 38 500 10 452 25 080 6 820 2 940 3 276 9 074 5 966 3 200 ADDITIONAL INFORMATION AND ADJUSTMENTS 1. The following mistakes must still be corrected: Partner Gani approved a donation of trading stock on 30 April 2020 (selling price R4 500) to the local orphanage. The business uses a mark-up of 50% on the cost price. The accountant, however, recorded the transaction as Drawings: Gani. The total of the following subsidiary book was posted to the accounts involved in the General ledger as R4 748. Creditors allowances Journal - April 2020 Creditors Control R3 656 Stationery R3 656 An invoice received from Civil Courts has been recorded in the books at an increase of R64 000 under Land and Buildings. However, the invoice shows the following information: Building a storeroom R44 000 Repairs to existing building R16 000 Repairs to private residence of Gani R 4 000 R64 000 Stock on hand on 30 April 2020 according to physical stocktaking was as follows: Trading Stock R71 260 Stationery R 620 2. The accounting period of GG Traders (Gani and Gerber) ends annually on 30 April. A list of balances and totals in the business' Pre-Adjustment Trial Balance on 30 April 2020 and the adjustments taken into account on this date are provided. (55) REQUIRED: 1. Draw up the Income Statement on 30 April 2020. 2. Post to the following General ledger accounts: 2.1 Current account: Gani 2.2 Appropriation account 3. Should the partners be satisfied with the control of operating expenses? Gerber feel that Gani's drawings are unreasonable. Quote figures to support her opinion. How does this effect the business? 5. The business urgently needs a vehicle which is expected to cost R480 000. In your opinion how should the business finance this vehicle? Give a reason for your answer (2) Gani and Gerber are not happy with their return from this business. Explain to them why, in view of the economic climate, whether they should be / should not be happy. Motivate your answer by referring to the economic fluctuations that was caused by the current virus. (5) INFORMATION: Extract of balances and totals on 30 April 2020: (before any adjustments were taken into account) Capital: Gani Capital: Gerber Current Account: Gani (Cr) Current Account: Gerber (Cr) Drawings Account: Gani Drawings Account: Gerber Land and Buildings R320 000 400 000 2 492 180 460 70 086 600 000 Equipment Accumulated Depreciation on Equipment Trading Stock Debtors Control Provision for bad debts Sales Cost of Sales Debtors Allowances Wages Telephone Stationery Bad Debts Rent Income Water and Electricity Insurance Rates and Taxes Discount Allowed Discount Received Repairs Bank Charges Unemployment Insurance Fund Contribution 260 000 74 000 71 588 62 930 3 080 2 595 080 1 728 000 3 080 320 400 12 884 10 296 3748 38 500 10 452 25 080 6 820 2 940 3 276 9 074 5 966 3 200 ADDITIONAL INFORMATION AND ADJUSTMENTS 1. The following mistakes must still be corrected: Partner Gani approved a donation of trading stock on 30 April 2020 (selling price R4 500) to the local orphanage. The business uses a mark-up of 50% on the cost price. The accountant, however, recorded the transaction as Drawings: Gani. The total of the following subsidiary book was posted to the accounts involved in the General ledger as R4 748. Creditors allowances Journal - April 2020 Creditors Control R3 656 Stationery R3 656 An invoice received from Civil Courts has been recorded in the books at an increase of R64 000 under Land and Buildings. However, the invoice shows the following information: Building a storeroom R44 000 Repairs to existing building R16 000 Repairs to private residence of Gani R 4 000 R64 000 Stock on hand on 30 April 2020 according to physical stocktaking was as follows: Trading Stock R71 260 Stationery R 620 2
