Question 1 (20 Marks)

Prepare the Statement of Financial Position of Scampi Traders as at 28 February 2022. Note: The Statement of Comprehensive Income and the notes to the financial statement are not required.

INFORMATION

The information provided below was extracted from the accounting records of Scampi Traders on 28 February 2022, the end of the financial year.

SCAMPI TRADERS

PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022

	Debit (R)	Credit (R)
Balance sheet accounts section
Capital		240 950
Drawings	114 000
Vehicles at cost	285 000
Equipment at cost	165 000
Accumulated depreciation on vehicles		138 000
Accumulated depreciation on equipment		54 000
Trading inventory	105 000
Debtors control	48 000
Provision for bad debts		6 600
Bank	35 850
Creditors control		61 500
Mortgage loan: Maxi Bank (16% p.a.)		105 000
Nominal accounts section
Sales		742 500
Cost of sales	360 000
Sales returns	4 500
Salaries and wages	129 000
Bad debts	1 500
Consumable stores	2 300
Rent expense	34 500
Motor expenses	26 700
Bad debts recovered		1 300
Telephone	9 300
Electricity and water	18 600
Bank charges	3 700
Insurance	8 100
Interest on mortgage loan	7 800
Commission income		9 000
	1 358 850	1 358 850

ADDITIONAL INFORMATION AND ADJUSTMENTS

1. According to physical stocktaking on 28 February 2022, the following were on hand: 1.1 Trading inventory, R103 000 1.2 Consumable stores, R200.

2. Rent has been paid up to 31 March 2022. Note: The rental was increased by R350 per month with effect from 01 February 2022.

3. A debtor who owed R1 000 was declared insolvent. Forty percent (40%) of the amount owing was received from his insolvent estate on 27 February 2022 and recorded. The balance of his account must now be written off. 4. The provision for bad debts must be decreased by R300.

5. Provide for outstanding interest on the loan from Maxi Bank. Interest is not capitalized. The loan was obtained on 01 March 2021. Loan repayments (excluding interest) totaling R20 000 are expected to be made in the next financial year.

6. The telephone account for February 2022 was due to be paid on 03 March 2022, R800.

7. According to the bank statement, service fees of R200 were levied by the bank. This has not been recorded.

8. Received an amount for R500 from H. Smit whose account was written off previously. No entry was made for this.

9. A debtor whose account of R4 000 was overdue for one month must be charged interest at a rate of 15% per annum.

10. Provide for depreciation as follows:

10.1 On equipment at 10% per annum on cost.

10.2 On vehicles, R19 650.

11. The net profit for the year ended 28 February 2022, AFTER taking the above into account, was R102 050.