content/0/ Study 20/2016 216 QUESTION 1 (20 MARKS) P. Gumede is the proprietor of PG Stores. He commenced trading on 01 March 2017. At the end of the second year of trading, his bookkeeper resigned unexpectedly and Mr Gumede found that the financial statements for the year ended 28 February 2019 were incomplete. He requires your assistance in completing them. The pre-adjustment trial balance, adjustments and additional information that were extracted from the accounting records as at 28 February 2019 are presented below. REQUIRED Complete the financial statements (that appear after the adjustments and additional information) with the missing amounts and details. The entire statements must be submitted. Where applicable, show your workings brackets. Note: The notes to the financial statements and Statement of Changes in Equity are not required. COMPAS ho 1 EX $ % & ( 6 5 7 8 9 0 [ E OP R Y %20Study 620628 1729 por 3/6 INFORMATION PG STORES PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2019 Debit (R) Credit (R) 870 700 234 000 608 700 275 000 203 000 Balance sheet accounts section Capital Drawings Land and buildings Vehicles at cost Equipment at cost Accumulated depreciation on vehicles Accumulated depreciation on equipment Trading inventory Debtors control Provision for bad debts Bank Cash float Petty cash Creditors control Loan: Tek Bank (12% p.a.) 94 000 70 000 140 000 103 000 5 000 4000 1500 500 60 000 96 000 1 277 000 Nominal accounts section Sales Cost of sales Sales returns Wages Bank charges Rent income Packing materials Advertising Rates Baddats 700 000 15 000 123 000 4000 66 000 37 000 18 000 7000 2.00 COMPAS 1 16 C > 96 6 5 7 8 9 O Y P R O w E T S F G D J H M V B.N olugin.php/186213/mod_resource/content/0/Financial%20Reporting%20and%20Analysis%20Case%20Study%20%281%29.pdf htudy Bdf 3/6 94 000 70 000 140 000 103 000 5000 Accumulated depreciation on venlicies Accumulated depreciation on equipment Trading inventory Debtors control Provision for bad debts Bank Cash float Petty cash Creditors control Loan: Tek Bank (12% p.a.) 4000 1500 500 60 000 96 000 1 277 000 700 000 15 000 123 000 4 000 66 000 Nominal accounts section Sales Cost of sales Sales returns Wages Bank charges Rent income Packing materials Advertising Rates Bad debts Discount allowed Discount received Stationery Interest on loan Water and electricity Insurance Telephone 37 000 18 000 7 000 2 000 1 000 2000 20 000 10 000 9000 16 000 9.000 2 540 700 2 540 700 COMPAG IO > & C % @ 9 O 8 7 6 5 2 3 o P Y U E R W G H J K KL F A S D M V N B N ent/0/Finan 20Reporting%20and%20Analysis%20Case%20Study%20%281%29.pdf Open in Acrob ADJUSTMENTS AND ADDITIONAL II OHLATION No entry was made for trading ....tory that was taken by the proprietor for his personal use, R2 000 Inventories on 28 February 2019 according to physical stocktaking were as follows: Trading Inventory R135 000 2.2 Stationery R2 000 3 The telephone account of R1 000 for February 2019 was erroneously paid twice, on 25 February 2019 and 27 February 2019. 4. Rent has been received up to 31 January 2019. 5. A debtor, P. Peter, was declared insolvent. On 28 February 2019, his insolvent estate paid a first and final dividend of 60 cents in the Rand. An amount of R1 800 was received and recorded. The balance of his account must now be written off. 6. The provision for bad debts must be increased by R1 000. 7 The insurance total includes an amount of R7 200 that was paid for the period 01 November 2018 to 31 October 2019. 8 Interest on loan for February 2019 has not yet been paid, Interest is not capitalised. Note: A repayment of R18 000 (excluding interest) is expected to be made in March 2019 to reduce the loan balance 9 Depreciation must be brought into account each year as follows Compaq CG COMPAS 44 49 bas IO ) * & 9 O % $ 8 7 6 5 * 3 4 2 1 { o PC Y R E W L J H G F DANS D S R N M hp/186213/mod_resource/content/O/Financial%20Reporting%20and%20Analysis%20Case %20Study%20%281%29.pdf 4/6 recorded. The balance of his account must now be written off. 6. The provision for bad debts must be increased by R1 000. 7. The insurance total includes an amount of R7 200 that was paid for the period 01 November 2018 to 31 October 2019. 8 Interest on loan for February 2019 has not yet been paid. Interest is not capitalised. Note: A repayment of R18 000 (excluding interest) is expected to be made in March 2019 to reduce the loan balance. 9. Depreciation must be brought into account each year as follows: 9.1 On vehicles at 20% per annum using the diminishing balance method. 9.2 On equipment at 15% per annum on cost. Note: Equipment with a cost price of R20 000 was purchased and recorded on 01 December 2018. REFER TO THE INCOMPLETE FINANCIAL STATEMENTS THAT FOLLOW AND FILL IN THE MISSING AMOUNTS AND DETAILS. WHERE APPLICABLE, SHOW YOUR WORKINGS IN BRACKETS. HIGHLIGHT YOUR ANSWERS FOR THE MISSING AMOUNTS OR SHOW THEM IN BOLD PRINT. COMPAS DI ( ) & % O 9 6 7 8 5 3 2 { O P - Y U T W E R H D F content/0/ Study 20/2016 216 QUESTION 1 (20 MARKS) P. Gumede is the proprietor of PG Stores. He commenced trading on 01 March 2017. At the end of the second year of trading, his bookkeeper resigned unexpectedly and Mr Gumede found that the financial statements for the year ended 28 February 2019 were incomplete. He requires your assistance in completing them. The pre-adjustment trial balance, adjustments and additional information that were extracted from the accounting records as at 28 February 2019 are presented below. REQUIRED Complete the financial statements (that appear after the adjustments and additional information) with the missing amounts and details. The entire statements must be submitted. Where applicable, show your workings brackets. Note: The notes to the financial statements and Statement of Changes in Equity are not required. COMPAS ho 1 EX $ % & ( 6 5 7 8 9 0 [ E OP R Y %20Study 620628 1729 por 3/6 INFORMATION PG STORES PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2019 Debit (R) Credit (R) 870 700 234 000 608 700 275 000 203 000 Balance sheet accounts section Capital Drawings Land and buildings Vehicles at cost Equipment at cost Accumulated depreciation on vehicles Accumulated depreciation on equipment Trading inventory Debtors control Provision for bad debts Bank Cash float Petty cash Creditors control Loan: Tek Bank (12% p.a.) 94 000 70 000 140 000 103 000 5 000 4000 1500 500 60 000 96 000 1 277 000 Nominal accounts section Sales Cost of sales Sales returns Wages Bank charges Rent income Packing materials Advertising Rates Baddats 700 000 15 000 123 000 4000 66 000 37 000 18 000 7000 2.00 COMPAS 1 16 C > 96 6 5 7 8 9 O Y P R O w E T S F G D J H M V B.N olugin.php/186213/mod_resource/content/0/Financial%20Reporting%20and%20Analysis%20Case%20Study%20%281%29.pdf htudy Bdf 3/6 94 000 70 000 140 000 103 000 5000 Accumulated depreciation on venlicies Accumulated depreciation on equipment Trading inventory Debtors control Provision for bad debts Bank Cash float Petty cash Creditors control Loan: Tek Bank (12% p.a.) 4000 1500 500 60 000 96 000 1 277 000 700 000 15 000 123 000 4 000 66 000 Nominal accounts section Sales Cost of sales Sales returns Wages Bank charges Rent income Packing materials Advertising Rates Bad debts Discount allowed Discount received Stationery Interest on loan Water and electricity Insurance Telephone 37 000 18 000 7 000 2 000 1 000 2000 20 000 10 000 9000 16 000 9.000 2 540 700 2 540 700 COMPAG IO > & C % @ 9 O 8 7 6 5 2 3 o P Y U E R W G H J K KL F A S D M V N B N ent/0/Finan 20Reporting%20and%20Analysis%20Case%20Study%20%281%29.pdf Open in Acrob ADJUSTMENTS AND ADDITIONAL II OHLATION No entry was made for trading ....tory that was taken by the proprietor for his personal use, R2 000 Inventories on 28 February 2019 according to physical stocktaking were as follows: Trading Inventory R135 000 2.2 Stationery R2 000 3 The telephone account of R1 000 for February 2019 was erroneously paid twice, on 25 February 2019 and 27 February 2019. 4. Rent has been received up to 31 January 2019. 5. A debtor, P. Peter, was declared insolvent. On 28 February 2019, his insolvent estate paid a first and final dividend of 60 cents in the Rand. An amount of R1 800 was received and recorded. The balance of his account must now be written off. 6. The provision for bad debts must be increased by R1 000. 7 The insurance total includes an amount of R7 200 that was paid for the period 01 November 2018 to 31 October 2019. 8 Interest on loan for February 2019 has not yet been paid, Interest is not capitalised. Note: A repayment of R18 000 (excluding interest) is expected to be made in March 2019 to reduce the loan balance 9 Depreciation must be brought into account each year as follows Compaq CG COMPAS 44 49 bas IO ) * & 9 O % $ 8 7 6 5 * 3 4 2 1 { o PC Y R E W L J H G F DANS D S R N M hp/186213/mod_resource/content/O/Financial%20Reporting%20and%20Analysis%20Case %20Study%20%281%29.pdf 4/6 recorded. The balance of his account must now be written off. 6. The provision for bad debts must be increased by R1 000. 7. The insurance total includes an amount of R7 200 that was paid for the period 01 November 2018 to 31 October 2019. 8 Interest on loan for February 2019 has not yet been paid. Interest is not capitalised. Note: A repayment of R18 000 (excluding interest) is expected to be made in March 2019 to reduce the loan balance. 9. Depreciation must be brought into account each year as follows: 9.1 On vehicles at 20% per annum using the diminishing balance method. 9.2 On equipment at 15% per annum on cost. Note: Equipment with a cost price of R20 000 was purchased and recorded on 01 December 2018. REFER TO THE INCOMPLETE FINANCIAL STATEMENTS THAT FOLLOW AND FILL IN THE MISSING AMOUNTS AND DETAILS. WHERE APPLICABLE, SHOW YOUR WORKINGS IN BRACKETS. HIGHLIGHT YOUR ANSWERS FOR THE MISSING AMOUNTS OR SHOW THEM IN BOLD PRINT. COMPAS DI ( ) & % O 9 6 7 8 5 3 2 { O P - Y U T W E R H D F