QUESTION 1 (40 marks) Simbas Safezone buys and sells protective equipment such as hard hats, safety glasses, earplugs, safety shoes, gloves and masks. They also offer safety training to individuals and business clients. The firm's PRE-ADJUSTED trial balance as at 31 December 2020 is presented below. Simbas Safezone pre-adjusted trial balance as at 31 December 2020 Debit Credit 132 000 Capital Retained earnings 165 150 Bank loan (15%) 250 000 Motor vehicles, at cost 375 000 75 000 Accumulated depreciation: Motor vehicles (1 January 2020) Investment: Fixed deposit account Inventory (1 January 2020) 96 000 470 000 Trade receivables 200 000 Cash at bank 91 300 Trade payables 200 800 Sales 1 031 000 Fees income 215 000 Interest income 4 800 Purchases 333 000 Drawings 50 000 Rent expense 128 400 Insurance expense 130 000 Advertising expense 11 600 Stationery expense 30 200 Salaries and wages 125 000 Telephone expense 7 000 Interest expense 26 250 2 073 750 2 073 750 Assume all the appropriate reversal entries relating to the prior year were processed correctly on 1 January 2020. On 30 September 2020, a cheque for R100 000 was issued to repay a portion of the 15% bank loan. This repayment has already been accounted for in the books of Simbas Safezone. Interest on the loan is payable semi-annually in arrears on 1 July and 1 January. Interest on the loan for half a year has thus already been paid on 1 July 2020 and accounted for in the books of Simbas Safezone. The bookkeeper has not yet accrued for the interest on the loan that will be paid on 1 January 2021. The bookkeeper has also not recorded (or adjusted for the following items relating to the financial year ended 31 December 2020: A telephone bill of R1 000 relating to the month of December 2020 was received on 5 January 2021 and has not been accounted for. . The insurance expense of R130 000 (see the pre-adjustment trial balance) includes an amount of R84 000 paid on 31 August 2020 covering the year from 1 September 2020 to 31 August 2021. . The fixed deposit investment was made on 1 May 2020 and earns interest at 10% per annum. The interest on this investment is received quarterly in arrears (on 1 August, 1 November, 1 February and 1 May). Interest income was thus received on 1 August 2020 and 1 November 2020 and accounted for in the records of Simbas Safezone. The fees income of R215 000 (refer to trial balance) includes an amount of R13 000 (received in December 2020), which relates to safety training provided in January 2021. The physical count conducted on 31 December 2020 revealed that inventory on hand had a cost of R310 000 and a net realisable value (NRV) of R305 000. According to the non-current assets register, vehicles are depreciated at 20% per annum using the straight-line method of depreciation. The bookkeeper has not yet provided for this year's depreciation. It was discovered that a specific debtor who owed R7 000 was untraceable. It was decided to write the debt off as irrecoverable. REQUIRED: 1.1 Prepare the statement of comprehensive income for Simbas Safezone for the year ended 31 December 2020. Show all your workings. (20 marks) 1.2 Prepare the statement of financial position for Simbas Safezone as at 31 December 2020. (20 marks)