Ms$.$ Smith opened a vibrant bookstore in September $2022,$ situated in the heart of

Cape Town, named "Smith's Reading Den". The bookstore has a financial yearend of

$31$ August.

You have been provided with a trial balance for Smith's Reading Den spanning from

$1$ September $2022$ up until $31$ July $2023.$

Smith's Reading Den Trial Balance as at $31$ July $2023$:

Account Debit

$($R$)$

Credit

$($R$)$

Bank $105000$

Inventory $($Books$)80000$

Accumulated Depreciation $$ Fixtures and

Fittings $12000$

Office Supplies $($asset$)2500$

Fixtures and Fittings $50000$

Point$-$of$-$Sale $($POS$)$ System $($Asset$)30000$

Trade Receivables $35000$

Trade Payables $18000$

Accumulated Depreciation $$ POS System $15000$

Sales $647500$

Cost of Goods Sold $314000$

Salaries Expense $132000$

Utility Bills $44000$

Capital $150000$

Drawings $50000$

Total $842500842500$

During the month of August, the following transactions took place and must still

be accounted for:

$01$ August $2023$: Ms$.$ Smith deposited an additional R$100000$ into the business

bank account. On the same day, she secured a loan of R$80000$ from a local bank.

$02$ August $2023$: Signed a two$-$year lease for the shop space, costing R$20000$ per

month. Ms$.$ Smith immediately paid the rent for August and an additional R$20000$

as a security deposit, totaling a payment of R$40000.$

$03$ August $2023$: Ms$.$ Smith hired Mr$.$ Mkhize as the store manager, with an agreed

monthly salary of R$22000,$ which is due on the $25$th of every month.

$05$ August $2023$: Purchased books for R$65000$ cash from "Literary Distributors

Inc."

$06$ August $2023$: Obtained office supplies on credit, valued at R$4000,$ from "Office

Essentials Ltd$."$

$07$ August $2023$: Ordered books from "Bookworld Ltd$"$ on credit. The total cost of

the books was R$95000.$

$11$ August $2023$: Smith's Reading Den made a sale to "Elite Schools Ltd$."$ on credit,

invoicing them R$40000$ for books that originally cost the store R$28000.$

$25$ August $2023$: Mr$.$ Mkhize's monthly salary of R$22000$ for August was disbursed.

$31$ August $2023$: To enhance the customer checkout experience, a new point$-$ofsale system was purchased for R$45000.$ An upfront payment of R$20000$ was

made, with the remaining R$25000$ to be settled in four equal monthly instalments.

$31$ August $2023$: The point$-$of$-$sales system showed a total amount of cash sales

achieved during the month amounting to R$33600.$ The books that were sold had

been initially acquired for R$24000.$

$31$ August $2023$: Invested in the store's ambiance by buying bookshelves and

seating arrangements, which cost R$55000$ in cash.

$31$ August $2023$: Utility bills for the month, amounting to R$4500,$ were paid.

$31$ August $2023$: A debtor, "Elite Schools Ltd$.",$ made a payment, settling $80\%$ of

their outstanding credit amount.

$31$ August $2023$: Smith's Reading Den made a payment of $75\%$ to "Bookworld Ltd$"$

as part$-$payment for the books that were previously purchased on credit.

$31$ August $2023$: Smith's Reading Den had R$3500$ office supplies left that they

would use in the future. REQUIRED:

$1\mathrm{.}1$ Calculate the profit or loss for the month of August $2023.$

$(10$ marks$)$

$1\mathrm{.}2$ Assume a loss of R$27900$ was made during August $2023.$ Prepare the

Statement of Financial Position for Smith's Reading Den for the financial year

ending $31$ August $2023.$