EXERCISE $1\mathrm{.}181\mathrm{.}18$

On $1$ January $2023$ A$.$ Jantjie, a general dealer trading as Bargain Basement, had the following balances in the

ledger:

R

Furniture and fixtures, at cost less depreciation $240000$

Motor vehicles, at cost less depreciation $160000$

Inventory $320000$

Cash at bank $288000$

Capital $1008000$

A$.$ Jantjie operates his business on a cash basis and does not grant or receive credit. The cash transactions for

the year are summarised below:

R

Inventory purchased $640000$

Sales $1160000$

Cost of goods sold $576000$

Rent expense $48000$

Insurance expense $19200$

Wages expense $80000$

Electricity expense $8800$

Office supplies expense $4000$

Miscellaneous expenses $4800$

Commission income $176000$

Drawings $400000$

In addition to the cash transactions, Jantjie decided that accounting entries should be recorded at

$31$ December in respect of the following:

$R_{?}$

Unused office supplies on hand $1600$

Depreciation : Furniture and fixtures $10\%$ per annum

: Motor vehicles $25\%$ per annum

The insurance expense of R$19200$ was the annual premium on a fire policy covering the period $1$

April $2023$ to $31$ March $2024.$

Use the following account numbers and titles:

REAL ACCOUNTS NOMINAL ACCOUNTS

$10$ Capital $41$ Sales

$12$ Drawings $42$ Cost of sales

$21$ Furniture and fixtures $50$ Depreciation expense

$24$ Motor vehicles $51$ Rent expense

$31$ Inventory $52$ Insurance expense

$32$ Office supplies $53$ Wages expense

$33$ Cash at bank $54$ Heating and lighting expense

$34$ Prepaid expense $55$ Office supplies expense

$56$ Miscellaneous expenses

$57$ Commission income

$60$ Trading summary

$61$ Profit and loss summary

REQUIRED:

$($a$)$ Open ledger accounts and enter the balances at $1$ January $2023.$

$($b$)$ Record thetransactions for the year given in $2.$ and $3.$ above in the ledger accounts. Thetransactions in $2.$

must be recorded before considering and recording the transactions in $3.$

$($c$)$ Take out a trialbalance.

$($d$)$ Prepare the Statement of Comprehensive Income of Bargain Basement for the year ended

December $2023.$

$($e$)$ Prepare the Statement of Financial Position of Bargain Basement at $31$ December $2023.$