QUESTION 1 [75]

(Integrated question)

The information below was extracted from the books of Malibongwe Traders for the year ending 31 December 2019. IGNORE VAT

Analyse the information given carefully, and work through all the questions in the chronological order giving appropriate responses to each.

Make certain that you articulate your thinking by presenting a well laid out presentation that will reflect your own knowledge and understanding of the topics below.

Take cognizance of the fact that cheating inhibits the ability for personal development and gives a false impression of achievements.

The question consists of part A and Part B

PART B [40 marks]

LIST OF BALANCES / TOTALS	R
Inventory (31/12/2019 )	95 440
Land and buildings	220 000
Drawings	46 690
Interest Received	5 100
Capital	210 000
Trade Receivables	26 700
10% Long-Term Loan	118 000
Fixed Deposit	25 000
Bank (CR)	15 030
Rent received	74 110
Stationery	10 130
Trade Payables	23 840
Credit sales	310 000
Cash sales	73 570
Account Payable allowances	2 100
Account Receivable allowances	1 700
Purchases	141 000
Donations Expenses	4 500
Rates and taxes	8 180
Interest on Loan	3 230
Bank charges	1 370
Salaries and wages	103 080
Railage on goods	1 300

Additional information:

1. Stationery on hand amounted to R 390.
2. The amount of R 2 890 for credit losses recovered were erroneously credited to Account Receivable Control.
3. The profits realized on asset disposal were omitted from the trial balance.
4. Closing inventory was R89 170.
5. Write off an amount of R1 700 as irrecoverable.
6. Create an allowance for credit losses of 10% on good trade receivables.
7. A replacement Vehicle was bought and delivered on the 21 December 2019.
8. The proceeds from the disposal of asset were omitted in the bank account.

YOU ARE REQUIRED TO:

1. Prepare The Statement of Financial Position for the year ending 31 December 2019. (18 marks))