Prepare the Statement of Financial Position of Solero Traders as at 28 February 2023.

Note: Where applicable, show workings in the spaces provided. The Statement of Comprehensive Income and notes to the financial statements are NOT required.

INFORMATION

The information given below was extracted from the accounting records of Solero Traders on 28 February 2023, the end of the financial year.

SOLERO TRADERS

PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2023

Debit (R) Credit (R)

Balance sheet accounts section DR CR

Capital 1 471 100 CR

Drawings 650 750 DR

Vehicles at cost 1 700 000 DR

Equipment at cost 1 000 000 DR

Accumulated depreciation on vehicles 840 000 CR

Accumulated depreciation on equipment 320 000 CR

Trading inventory 632 000 DR

Debtors control 294 000 DR

Provision for bad debts 14 000 CR

Bank 200 000 DR

Petty cash 3 100 DR

Creditors control 372 000 CR

Mortgage loan: Reef Bank (15% p.a.) 620 000 CR

Nominal accounts section

Sales 4 454 000 CR

Cost of sales 2 160 000 DR

Sales returns 34 000 DR

Salaries and wages 766 000 DR

Bad debts 10 000 DR

Consumable stores 14 000 DR

Rent expense 208 000 DR

Motor expenses 160 000 DR

Bad debts recovered 6 000 CR

Telephone 56 000 DR

Electricity and water 110 000 DR

Bank charges 22 000 DR

Insurance 48 000 DR

Interest on mortgage loan 85 250 DR

Commission income 56 000 CR

TOTAL DR: 8 153 100 TOTAL CR: 8 153 100

Adjustments and additional information

1. According to physical stocktaking on 28 February 2023, the following were on hand:

1.1 Trading inventory, R622 000 1.2 Consumable stores, R2 000.

2. Rent has been paid up to 31 March 2023.

3. A debtor who owed R6 000 could not be traced. It was decided to write off his account.

4. The provision for bad debts must be increased to R14 400.

5. Provide for the outstanding interest on the mortgage loan for the last month of the financial year. The loan balance is expected to be reduced by R60 000 in the next financial year by means of monthly repayments.

6. The insurance total includes an annual premium of R12 000 that was paid on 01 June 2022.

7. Bank charges which appeared on the February 2023 bank statement have not been recorded, R800.

8. On 28 February 2023 an amount of R1 000 was received from P. Villers whose account was written off on 08 January 2023. No entry was made for this receipt.

9. A payment of R6 000 for the telephone account was erroneously debited to the drawings account. Correct the error.

10. A debtor whose account was overdue must be charged R200 interest.

11. R400 was paid from petty cash for wages to a temporary employee. No entry was made for this.

12. Provide for depreciation as follows:

12.1 On equipment at 10% on cost.

12.2 On vehicles at 20% per annum on the diminishing balance.

13. The net profit for the year ended 28 February 2023, after considering the above adjustments and additional information, was R561 600