QUESTION 1 (25 marks) IOU Traders Statement of profit/loss and other comprehensive income For the year ended 31 December 2019 R R 900 000 (680 000 220 000 Sales Cost of Sales: Gross profit Other income: Profit on sale of shares Rent received 127 000 3 000 124 000 (100 000) Expenses: Salaries and wages Water and electricity Stationery Commission paid 40 000 20 000 10 000 30 000 Profit before interest and finance costs Interest received Interest paid 247 000 40 000 (20 000) Net profit for the year 267 000 IOU Traders Statement of Financial Position On 31 December 2019 2019 2018 R R R R ASSETS Noncurrent assets Land and Buildings Investment: ABC Bank @ 10% 600 000 600 000 200 000 400 000 400 000 200 000 580 000 400 000 Current assets Inventory Trade debtors Share investment Cash and cash equivalents 200 000 60 000 30 000 290 000 120 000 84 000 34 000 162 000 TOTAL ASSETS 1 180 000 1 000 000 1 012 000 725 000 EQUITY AND LIABILITIES Equity Opening balance Capital contributed Net income for the year Drawings 725 000 140 000 267 000 (120 000) 525 000 0 200 000 0 168 000 275 000 Current Liabilities Accrued expenses Trade creditors Short-term bank loan 58 000 110 000 0 19 000 160 000 96 000 TOTAL EQUITY AND LIABILITIES 1 180 000 1 000 000 Additional information: 1. Land and buildings to the value of R200 000 were sold during the year under review. No depreciation is written off on land and buildings