Question 1 CACN011: FINANCIAL ACCOUNTING IA- JUNE 2022 [35 marks 52,5 Minutes] Financial Fitness (FF) is a small financial consulting practice owned and managed by Musa Lefu and Davis Musk as its shareholders. The pre-adjustment trial balance of Financial Fitness on 31 March 2022 is as follows: Financial Fitness (PTY) Limited Trial Balance 31 March 2022 Account No. DR CR Bank balances Accounts receivable Rent paid in advance 101 48 075 112 4000 115 4 000 Office supplies on hand 118 1500 Office computers and printers 122 40 000 Motor vehicles 125 100 000 Call deposit held with FNB 128 10 000 Wesbank wheels loan 312 100 000 Trade creditors 309 Fees received in advance 318 1600 7 000 Share capital as of 1 March 2022 401 100 000 Distributions 721 6 000 Fees earned 502 9 000 Petrol expense 501 300 Advertising expense 505 800 Salaries expense 507 2425 Interest expense 518 500 The following internal transactions still need to be considered on 31 March 2022: (i) On 20 March 2022, Ann Parker paid Financial Fitness R7 000 for seven consultations to be provided over the coming months. R7 000 was recorded in the fees received in the advance account. By 31 March 2022, two consultations to the value of R2 000 had been held with her. (ii) On 1 March 2022, Musa transferred R10 000 from the business bank account to a call deposit at the bank, earning interest at 3% per annum. The amount of R10 000 was recorded in the call deposit account. On 31 March 2022, Financial Fitness accounted for the interest earned for the month. (iii) On 1 March 2022, Davis found premises in Hyde Park. The monthly rental for the office space was R1 000 per month. The business paid rent, in advance, for four months on 1 March 2022, and R4 000 was recorded in the rent paid in the advance account. On 31 March 2022, Financial Fitness accounted for the rent expense for the month. (iv) On 31 March 2022, the telephone account for R200 and the light and water account for R300 arrived in the post. These accounts must be paid by 10 April 2022. 21Page