Prepare the adjusting journal entries required in the records of Summit Solutions (Pty) Ltd for the year ended 31 December 2022, for

transactions 1-7 listed under the Notes

NOTES:

1. Insurance expense: In December 2022, the fixed monthly insurance debit order was not processed due to an oversight by the insurance company. This was rectified by SS's managing director, Sam, who informed the insurance company. On 2 January 2023, the insurance debit order was processed twice, resulting in a total deduction of R55 000 from SS's bank account. The trial balance needs to be adjusted to account for this transaction.

2. Inventory: SS's conducted an inventory count on 31 December 2022 and determined that the closing inventory on hand was valued at R160 000. No inventory was reported as damaged or stolen during the count. The trial balance has not been updated with this information.

3. Investment / Interest income: SS's investment earns interest every third month. The interest earned for the last quarter of 2022 amounted to R2 250 and was only received on 10 January 2023. The accountant still needs to process this transaction.

4. Rent expense: The pre-adjusted trial balance includes 13 months' worth of rental expenses. The rent for January 2023 was paid on 28 December 2022. The monthly rental expense has remained unchanged over the last 2 years.

5. Rent income: SS's receives R20 000 per month as rent income according to a sub-letting agreement. The rent for January 2023 was received on 29 December 2022. The pre-adjusted trial balance currently reflects 13 months' worth of rent income.

6. Salary expense: SS's awards annual bonuses to its employees, which are paid on 1 January of the following financial year. The company policy is to calculate bonuses at a rate of 4% of the total salary expense account on 31 December of the current financial year.

7. Stationery: All stationery purchases are expensed during the year. On 31 December 2022, the accountant found unused stationery worth R10 000 on hand.

Additional Information: Except for the accounts affected by notes 1-7 mentioned above, assume that all other accounts in the pre-adjusted trial balance are complete and accurate for the financial year ending 31 December 2022.

1.2 Prepare the Statement of Financial Position of Summit Solutions (Pty) Ltd for the financial year ended 31 December 2022. Assume that after all the necessary adjustments relating to transactions 1-7, Summit Solutions (Pty) Ltd has an updated/final Retained earning balance of R1 566 950 for 31 December 2022. (20 marks)

Summit Solutions (Pty) Ltd, also known as SS, is a privately owned company located in South Africa and operates on a December year-end. SS has been conducting business for the last decade. Below is the pre-adjustment trial balance of SS : Receivables control Rent expense Rent income Retained earnings - 01/01/2022 Salary expense Sales Stationery expense Sundry expenses 120000 465000 5 260000 2023100 6 520000 960000 7 50000 635040018504001850 1 Prepare the adjusting journal entries required in the records of Summit Solutions (Pty) Ltd for the year ended 31 December 2022, for transactions 1-7 listed under the Notes. Show all workings, and reference accordingly. Journal dates and narrations are not required. Your response should be presented in the following format: (15 marks)