QUESTION 1 The following balances appeared in the books of BidTru Traders as at 01 March 2016 R Capital Land and buildings (Land, R80 000) 780 000 Motor Vehicles 350 000 Equipment 90 000 10 p a Fixed Deposit 60 000 12 p a Loan 45 000 Inventory 14 450 Accumulated depreciation Buildings 115 000 Accumulated depreciation Motor Vehicles 179 000 Accumulated depreciation Equipment 31 500 Accounts Payable 71 630 Bank (favourable) 69 660 Accounts receivable 107 580 Allowance for doubtful debts 4 850 Stationery 4 600 Transactions for the month of March The owner withdrew inventory with a cost price of R9 600 for his personal use Stationery and inventory was purchased during the month on credit, R13 440 and R324 300 respectively Sales made for the month totalled R355 400, of which 30 was on credit and the remaining for cash The cost of the inventory sold was R284 320 The business purchased equipment that cost R40 000 The owner paid 40 immediately from his personal savings and the balance to be settled by the business at a later stage An insurance contract was entered into for the period 01 March 2016 to 31 May 2016, the three months premiums were paid up front, amounting to R12 000 T Parrot, a debtor, was declared insolvent His estate paid 30c in the rand on a total debt of R2 800, the balance to be written off as irrecoverable The bank statement reflected bank charges of R55 for the month of March and interest received from the fixed deposit as R3 000 Depreciation should be provided as follows 5 on the straight line method on buildings 20 on the straight line method on motor vehicles 10 on the reducing balance method of equipment The monthly payment for the interest portion on the loan had not been made Stationery of R1 800 was on hand on 31 March 2016 a The allowance for doubtful debts is to be calculated as 5 of the outstanding accounts receivable at month end You are required to Prepare the accounting equation on the worksheet provided and balance the equation Prepare the Statement of Profit or Loss, Statement of Changes in Equity and the Statement of Financial Position of BidTru Traders for the year ended 31 March 2016

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Posted on Jul 17, 2024

QUESTION 1

The following balances appeared in the books of BidTru Traders as at 01 March 2016:

	R
Capital	?
Land and buildings (Land, R80 000)	780 000
Motor Vehicles	350 000
Equipment	90 000
10%p.a. Fixed Deposit	60 000
12%p.a. Loan	45 000
Inventory	14 450
Accumulated depreciation: Buildings	115 000
Accumulated depreciation: Motor Vehicles	179 000
Accumulated depreciation: Equipment	31 500
Accounts Payable	71 630
Bank (favourable)	69 660
Accounts receivable	107 580
Allowance for doubtful debts	4 850
Stationery	4 600

Transactions for the month of March:

Stationery and inventory was purchased during the month on credit, R13 440 and R324 300 respectively.

Sales made for the month totalled R355 400, of which 30% was on credit and the remaining for cash. The cost of the inventory sold was R284 320.

The business purchased equipment that cost R40 000. The owner paid 40% immediately from his personal savings and the balance to be settled by the business at a later stage.

An insurance contract was entered into for the period 01 March 2016 to 31 May 2016, the three months premiums were paid up front, amounting to R12 000.

T. Parrot, a debtor, was declared insolvent. His estate paid 30c in the rand on a total debt of R2 800, the balance to be written off as irrecoverable.

The bank statement reflected bank charges of R55 for the month of March and interest received from the fixed deposit as R3 000.

The allowance for doubtful debts is to be calculated as 5% of the outstanding accounts receivable at month end.

You are required to:

Prepare the accounting equation on the worksheet provided and balance the equation.
Prepare the Statement of Profit or Loss, Statement of Changes in Equity and the Statement of Financial Position of BidTru Traders for the year ended 31 March 2016.