Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Financial Reporting and Analysis QUESTION 1 P. Gumede is the proprietor of PG Stores. He commenced trading on 01 March 2017. At the end of

image text in transcribedimage text in transcribed

Financial Reporting and Analysis

QUESTION 1

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 in brackets. Note: The notes to the financial statements and Statement Of Changes In Equity are not required

INFORMATION

PG STORES

PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2019

image text in transcribedimage text in transcribedimage text in transcribed
Debit (R) Credit (R) Balance sheet accounts section Capital 870 700 Drawings 234 000 Land and buildings 608 700 Vehicles at cost 275 000 Equipment at cost 203 000 Accumulated depreciation on vehicles 94 000 Accumulated depreciation on equipment 70 000 Trading inventory 140 000 Debtors control 103 000 Provision for bad debts 5 000 Bank 4 000 Cash float 1 500 Petty cash 500 Creditors control 60 000 Loan: Tek Bank (12% p.a.) 96 000 Nominal accounts section Sales 1 277 000 Cost of sales 700 000 Sales returns 15 000 Wages 123 000 Bank charges 4 000 Rent income 66 000 Packing materials 37 000 Advertising 18 000 Rates 7 000 Bad debts 2 000 Discount allowed 1 000 Discount received 2 000 Stationery 20 000 Interest on loan 10 000 Water and electricity 9 000 Insurance 16 000 Telephone 9 000 2 540 700 2 540 700PG STORES STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2019 R Sales ? Cost of sales (700 000) Gross profit Other operating income Rent income 2 Discount received 2 000 Gross operating income Operating expenses 2 Wages 123 000 Bank charges 4 000 Packing materials 37 000 Advertising 18 000 Rates 7 000 Bad debts Discount allowed 1 000 Stationery 2 Water and electricity 9 000 Insurance Telephone Operating profit Interest income Interest expense Net profit for the yearPG STORES STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2019 ASSETS R Non-current assets Property, plant and equipment Current assets Inventories Trade and other receivables Trade debtors Provision for bad debts Prepaid expenses ? Accrued income 2 Cash and cash equivalents 6 000 Bank 4 000 Cash float 1 500 Petty cash 500 Total assets EQUITY AND LIABILITIES Equity Capital Non-current liabilities Loan: Tek Bank Current liabilities Trade and other payables Creditors control 60 000 Income received in advance Accrued expenses Total equity and liabilities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Accounting

Authors: Frederick D. Choi, Gary K. Meek

7th Edition

978-0136111474, 0136111475

More Books

Students also viewed these Accounting questions