QUESTION $1(20$ Marks$)$

REQUIRED

Prepare the Statement of Financial Position as at $29$ February $2024.$

INFORMATION

The trial balance, additional information and adjustments given below were obtained from the records

of Torga Traders on $29$ February $2024,$ the end of the financial year.

TORGA TRADERS

PRE$-$ADJUSTMENT TRIAL BALANCE AS AT $29$ FEBRUARY $2024$

Debit $($R$)$ Credit $($R$)$

Balance sheet accounts section

Capital $3530000$

Drawings $362000$

Land and buildings at cost $2340000$

Equipment at cost $1600000$

Vehicles at cost $1000000$

Accumulated depreciation on equipment $504000$

Accumulated depreciation on vehicles $252000$

Fixed deposit: Zap Bank $(9\%$ p$.$a$.)100000$

Trading inventory $244000$

Debtors control $302000$

Bank $98000$

Cash float $2000$

Creditors control $376000$

Loan: Zap Bank $(18\%$ p$.$a$.)184000$

Nominal accounts section

Sales $4086000$

Cost of sales $2340000$

Sales returns $70000$

Advertising $50000$

Stationery $8000$

Bad debts $12000$

Discount allowed $20000$

Discount received $14000$

Electricity and water $152000$

Interest on fixed deposit $4000$

Interest on overdraft $2000$

Insurance $30000$

Salaries $450000$

Bank charges $16000$

Rent income $130000$

Municipal rates $78000$

$91780009178000$

Additional information and adjustments

$1.$ The bookkeeper did not record the following debit entries that appeared on the February $2024$

bank statement:

$1\mathrm{.}1$ Bank charges R$1400$

$1\mathrm{.}2$ Interest on overdraft R$200$

$2.$ The financial year$-$end inventory count revealed the following inventories:

$2\mathrm{.}1$ Trading inventory R$240000$

$2\mathrm{.}2$ Stationery R$1000$

$3.$ Vehicles are to be depreciated at R$150000$ per year.

$4.$ Depreciation on equipment amounted to R$219200.$

$5.$ Provide for R$5000$ outstanding interest on the fixed deposit. Interest is not capitalised. The

investment in fixed deposit was made on $01$ March $2023$ and it matures on $28$ February $2026.$

$6.$ The loan was obtained from Zap Bank on $01$ February $2024.$ Provide for the outstanding interest

for February $2024,$ R$2760.$ Interest is not capitalised. Repayments $($excluding interest$)$ totalling

R$24000$ are expected to be made during the financial year ended $28$ February $2025.$

$7.$ The tenant has already paid the rent of R$10000$ for the first month of the next financial year.

$8.$ The municipal rates statement for the year ended $29$ February $2024$ reflected that R$6000$ was

paid in advance for the next financial year.

$9.$ A debtor who owed R$2000$ was declared insolvent. Her account must now be written off.

$10.$ A provision for bad debts of R$15000$ must be created.

$11.$ The net profit for the year ended $29$ February $2024,$ after taking the above into account,

amounted to R$613440$