INFORMATION The trial balance, adjustments and additional information given below were obtained from the records of Pentel Traders on 29 February 2020, the end of the financial year. PENTEL TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2020 Debit (R) Credit (R) 681 800 82 000 489 000 190 000 63 000 32 000 23 400 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 Petty cash Creditors control Loan: Met Bank (15%) 46 000 34 000 1 900 1 100 100 30 400 30 000 420 000 233 000 5 000 41 000 3000 27 000 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 12 000 6 000 4000 1 000 2000 700 9 000 4 000 7 000 9 000 7 000 1247 200 1 247 200 QUESTION 2 (20 Marks) REQUIRED Prepare the Statement of Comprehensive Income for the year ended 29 February 2020. Use the following format as a guide: PENTEL TRADERS STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 29 FEBRUARY 2020 Sales Cost of sales Gross profit Other operating income Gross operating income Operating expenses Operating profit Interest income Interest expense Net profit for the year Adjustments and additional information 1. A physical count revealed the following inventories on 29 February 2020: 1.1 Trading inventory R43 000 1.2 Packing materials R1 000 2. Received an account from Wheel Centre for replacing the tyres on the motor vehicle, R6 000. No entry has been made for this. 3. The account of debtor, J. Parsons, who owed R1 000 must be written off as irrecoverable. 4. A debtor whose account of R3 000 was overdue for one month must be charged interest at a rate of 12% per annum. 5. The provision for bad debts must be reduced to R1 700. 6. Provide for outstanding interest on loan, R500. 7. The telephone account for February 2020 was due to be paid on 03 March 2020, R700. 8. The insurance account includes the annual building insurance premium that was paid for the period 01 June 2019 to 31 May 2020, R2 400. 9. The bookkeeper did not record an amount of R200 that was reflected on the March bank statement for service fees. 10 Rent has been received for March 2020. Note: The rent was increased by R500 per month with effect from 01 February 2020. 11. Provide for depreciation as follows: 11.1 On vehicles at 20% per annum on the diminishing balance. 11.2 On equipment at 10% per annum on cost. Note: A computer with a cost price of R10 000 was purchased on 01 September 2019. The purchase has been recorded
