Question
Prepare the Statement of Financial Position as at 28 February 2022. The notes to the financial statements are not required. (20 Marks) INFORMATION The trial
Prepare the Statement of Financial Position as at 28 February 2022. The notes to the financial statements are not required. (20 Marks)
INFORMATION
The trial balance, adjustments and additional information given below were extracted from the accounting records of Woodford Limited for the financial year ended 28 February 2022.
WOODFORD LIMITED
PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022
Debit R | Credit R | |
Balance sheet accounts section | ||
Capital | 1 000 000 | |
Retained earnings | 300 000 | |
Land and buildings | 878 000 | |
Vehicles at cost | 572 000 | |
Equipment at cost | 480 000 | |
Accumulated depreciation on vehicles | 384 000 | |
Accumulated depreciation on equipment | 168 000 | |
Fixed deposit: Fin Bank (9% p.a.) | 144 000 | |
Trading inventory | 123 000 | |
Debtors control | 146 000 | |
Provision for bad debts | 8 000 | |
Bank | 120 000 | |
Cash float | 7 000 | |
South African Revenue Services: Company tax | 30 000 | |
Creditors control | 134 000 | |
Mortgage loan: Fin Bank (12% p.a.) | 240 000 | |
Nominal accounts sectio | ||
Sales | 1 635 000 | |
Cost of sales | 432 000 | |
Sales returns | 9 000 | |
Salaries and wages | 427 000 | |
Bad debts | 13 000 | |
Stationery | 21 000 | |
Rates and taxes | 57 000 | |
Motor expenses | 96 000 | |
Directors fees | 120 000 | |
Audit fees | 20 000 | |
Repairs to building | 17 000 | |
Telephone | 32 000 | |
Electricity and water | 48 000 | |
Bank charges | 6 000 | |
Insurance | 62 000 | |
Interest on mortgage loan | 19 000 | |
Interest on fixed deposit | 10 000 | |
3 879 000 | 3 879 000 |
Adjustments and additional information
1. The telephone account for February 2022 was due to be paid on 03 March 2022, R4 000.
2. A debtor, P. Martin, was declared insolvent. His account must now be written off, R3 000.
3. Stocktaking on 28 February 2022 revealed the following on hand: 3.1 Trading inventory R121 000 3.2 Stationery R1 000
4. The provision for bad debts must be increased by R700.
5. Directors fees unpaid amounted to R14 000.
6. The insurance total includes an amount of R6 000 that was paid for the next accounting period.
7. Provide for the outstanding interest on the mortgage loan, R9 800. Interest is not capitalised. Loan repayments (excluding interest) totalling R30 000 are expected to be made in the next financial year.
8. Provide for outstanding interest on fixed deposit. Interest is not capitalised. The investment in fixed deposit was made on 01 March 2021 and it matures on 28 February 2024.
9. Provide for depreciation as follows:
9.1 On equipment, R72 000. 9.2 On vehicles, R37 600.
10. Company tax for the financial year ended 28 February 2022 amounted to R39 860.
11. The profit after tax for the year ended 28 February 2022 amounted to R93 000, AFTER the above was taken into account.
12. A final dividend of 80 cents per share was declared by the directors.
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