Prepare the statement of financial position Please note, this question was answered on another post although I do not think the answer is correct as it requires the answer to be in the same format as in the study guide. I will provide an example of a similar question from the study guide.

Midway Traders is owned by Mr K. Rabada. His accountant, Mr V. Philander, prepared the Statement of Comprehensive Income for the year ended 29 February 2020. However he unexpectedly fell ill and was unable to prepare the remaining financial statements. Mr K. Rabada requires your assistance in preparing the Statement of Financial Position. The net profit, pre-adjustment trial balance, adjustments and additional information from accountants records as at 29 February 2020 were retrieved and are presented below.

REQUIRED Prepare the Statement of Financial Position as at 29 February 2020. Note:

* Use the format from your study guide.

* The notes to the financial statements are not required.

INFORMATION The information given below was retrieved from the accounting records maintained by the accountant of Midway Traders on 29 February 2020, the end of the financial year:

The example answer given in the study guide looks like this.

ADJUSTMENTS AND ADDITIONAL INFORMATION 1. Physical stocktaking on 29 February 2020 showed the following inventories: 1.1 Trading inventory R150 000; 1.2 Stationery R3 000. 2. Write off the account of debtor, R. Smith, R2 000. 3. The provision for bad debts must be increased by R1 000. 4. Rent income amounts to R16 000 per month. Make the necessary adjustment. 5. The water and electricity account for February 2020 was due to be paid on 02 March 2020, R11 000. 6. Rates and taxes include an amount of R15 000 that was paid for the period 01 January 2020 to 31 March 2020. 7. An amount of R800 appeared in the February 2020 bank statement for bank charges. This transaction was not recorded. 8. The investment in fixed deposit was made on 01 March 2019 and matures on 31 August 2020. Make the necessary adjustment for the interest. 9. The loan from Pep Bank was obtained on 01 February 2020. Provide for the outstanding interest. Interest is not capitalised. Note: Loan repayments during the next financial year are expected to total R50 000. 10. Provide for depreciation as follows: 10.1 On equipment at 10% p.a. on cost. 10.2 On vehicles at 20% p.a. using the diminishing balance method. 11. The net profit, according to the Statement of Comprehensive Income for the year ended 29 February 2020, amounted to R429 140 after the above adjustments and additional information were taken into account. PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 20.15 Debit (R) Credit (R) 395 700 87 000 400 000 90 000 22 000 40 000 Balance Sheet Accounts Section Capital Drawings Land and buildings Equipment Accumulated depreciation on equipment (01 March 20.14) Fixed deposit: Ben Bank (12% p.a.) Loan: Zen Bank (16% p.a.) Trading inventory Debtors control Provision for bad debts Creditors control Bank Cash float 40 000 70 220 34 420 1 900 49 600 12 480 1 000 563 000 298 000 4 000 52 800 3 200 Nominal Accounts Section Sales Cost of sales Sales returns Rent income Interest on fixed deposit Bank charges Water and electricity Telephone Insurance Interest on loan Rates and taxes Salaries and wages Consumable stores Advertising 1 800 12 540 3 500 3 900 7 500 16 400 40 640 1 600 3 200 1 128 200 1 128 200 Financial Reporting and Analysis Adjustments and additional information 1. According to a physical stocktaking the following inventories were on hand on 28 February 20.15 Merchandise R69 000 Consumable stores R200 2. Rates and taxes included a payment of R4 080 for the period 01 January 20.15 to 30 June 2015 3. Depreciation is provided annually on equipment at 10%p.a. using the diminishing balance method. Note: Equipment costing R30 000 was purchased on credit on 01 February 20.15. The purchase has not been recorded. 4. Rent for February 20.15 is still outstanding. 5. A portion of the interest on loan has been paid in advance. The unsecured loan was obtained on 28 February 20.14. Equal annual repayments of R10 000 will commence on 01 March 20.15. 6. 7. On 28 February 20.15, a cheque of R500 was received from O.Henry whose account was previously written off as irrecoverable. No entry has been made for this. A debtor, A. Donald who owed R800, is dedared insolvent. His estate paid Ajax Traders a first and final dividend of 60 cents in the Rand. This has been recorded. The balance of his account must now be written off. 8. The provision for bad debts must be adjusted to 5% of trade debtors. 9. The fixed deposit at Ben Bank was made on 01 March 20.14 and matures on 30 June 20.15. Provide for the outstanding interest on fixed deposit 10. Service fees according to the bank statement for February 20.15 have not yet been recorded, R160. 11. The telephone account for February 20.15 has not yet been paid, R320 Ajax Traders STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 20.15 Note R 2 490 950 490 9500 165 635 69 200 3 42 615 ASSETS Non-current assets Property, plant and equipment Current assets Inventories Trade and other receivables Trade debtors (34 420 - 320) Provision for bad debts (1900 - 195) Prepaid expenses (2 720 +1 100) Accrued income (4 800 + 1 600) Cash and cash equivalents Fixed deposit: Ben Bank (12%p.a.) Bank (12 480 + 500 160) Cash float (1000) Total assets 34 100 (1 705) 3 820 6 400 53 820 40 000 12 820 1 000 656 585 Financial Reporting and Analysis 536 665 536 665 30 000 30 000 EQUITY AND LIABILITIES Equity Capital Non-current liabilities Long term borrowings Current liabilities Trade and other payables Trade creditors (49 600 + 30 000) Accrued expenses (320) Current portion of long term borrowings Total equity and liabilities 89 920 79 920 79 600 320 10 000 656 585 ADJUSTMENTS AND ADDITIONAL INFORMATION 1. Physical stocktaking on 29 February 2020 showed the following inventories: 1.1 Trading inventory R150 000; 1.2 Stationery R3 000. 2. Write off the account of debtor, R. Smith, R2 000. 3. The provision for bad debts must be increased by R1 000. 4. Rent income amounts to R16 000 per month. Make the necessary adjustment. 5. The water and electricity account for February 2020 was due to be paid on 02 March 2020, R11 000. 6. Rates and taxes include an amount of R15 000 that was paid for the period 01 January 2020 to 31 March 2020. 7. An amount of R800 appeared in the February 2020 bank statement for bank charges. This transaction was not recorded. 8. The investment in fixed deposit was made on 01 March 2019 and matures on 31 August 2020. Make the necessary adjustment for the interest. 9. The loan from Pep Bank was obtained on 01 February 2020. Provide for the outstanding interest. Interest is not capitalised. Note: Loan repayments during the next financial year are expected to total R50 000. 10. Provide for depreciation as follows: 10.1 On equipment at 10% p.a. on cost. 10.2 On vehicles at 20% p.a. using the diminishing balance method. 11. The net profit, according to the Statement of Comprehensive Income for the year ended 29 February 2020, amounted to R429 140 after the above adjustments and additional information were taken into account. PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 20.15 Debit (R) Credit (R) 395 700 87 000 400 000 90 000 22 000 40 000 Balance Sheet Accounts Section Capital Drawings Land and buildings Equipment Accumulated depreciation on equipment (01 March 20.14) Fixed deposit: Ben Bank (12% p.a.) Loan: Zen Bank (16% p.a.) Trading inventory Debtors control Provision for bad debts Creditors control Bank Cash float 40 000 70 220 34 420 1 900 49 600 12 480 1 000 563 000 298 000 4 000 52 800 3 200 Nominal Accounts Section Sales Cost of sales Sales returns Rent income Interest on fixed deposit Bank charges Water and electricity Telephone Insurance Interest on loan Rates and taxes Salaries and wages Consumable stores Advertising 1 800 12 540 3 500 3 900 7 500 16 400 40 640 1 600 3 200 1 128 200 1 128 200 Financial Reporting and Analysis Adjustments and additional information 1. According to a physical stocktaking the following inventories were on hand on 28 February 20.15 Merchandise R69 000 Consumable stores R200 2. Rates and taxes included a payment of R4 080 for the period 01 January 20.15 to 30 June 2015 3. Depreciation is provided annually on equipment at 10%p.a. using the diminishing balance method. Note: Equipment costing R30 000 was purchased on credit on 01 February 20.15. The purchase has not been recorded. 4. Rent for February 20.15 is still outstanding. 5. A portion of the interest on loan has been paid in advance. The unsecured loan was obtained on 28 February 20.14. Equal annual repayments of R10 000 will commence on 01 March 20.15. 6. 7. On 28 February 20.15, a cheque of R500 was received from O.Henry whose account was previously written off as irrecoverable. No entry has been made for this. A debtor, A. Donald who owed R800, is dedared insolvent. His estate paid Ajax Traders a first and final dividend of 60 cents in the Rand. This has been recorded. The balance of his account must now be written off. 8. The provision for bad debts must be adjusted to 5% of trade debtors. 9. The fixed deposit at Ben Bank was made on 01 March 20.14 and matures on 30 June 20.15. Provide for the outstanding interest on fixed deposit 10. Service fees according to the bank statement for February 20.15 have not yet been recorded, R160. 11. The telephone account for February 20.15 has not yet been paid, R320 Ajax Traders STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 20.15 Note R 2 490 950 490 9500 165 635 69 200 3 42 615 ASSETS Non-current assets Property, plant and equipment Current assets Inventories Trade and other receivables Trade debtors (34 420 - 320) Provision for bad debts (1900 - 195) Prepaid expenses (2 720 +1 100) Accrued income (4 800 + 1 600) Cash and cash equivalents Fixed deposit: Ben Bank (12%p.a.) Bank (12 480 + 500 160) Cash float (1000) Total assets 34 100 (1 705) 3 820 6 400 53 820 40 000 12 820 1 000 656 585 Financial Reporting and Analysis 536 665 536 665 30 000 30 000 EQUITY AND LIABILITIES Equity Capital Non-current liabilities Long term borrowings Current liabilities Trade and other payables Trade creditors (49 600 + 30 000) Accrued expenses (320) Current portion of long term borrowings Total equity and liabilities 89 920 79 920 79 600 320 10 000 656 585