QUESTION 1(20 MARKS)P. Gumede is the proprietor of PG Stores. He commenced trading on 01 March 2017. At the end of the second year of trading, his bookkeeper resigned unexpectedly and Mr Gumede found that the financial statements forthe year ended 28 February 2019 were incomplete.He requires your assistance in completing them. The pre-adjustment trial balance, adjustments and additional information that were extracted from the accounting records as at 28 February 2019 are presentedbelow.REQUIREDComplete the financial statements (that appear after the adjustments and additional information) with the missing amounts and details. The entire statements must be submitted. Where applicable, show your workings in brackets.Note: The notes to the financial statements and Statement Of Changes In Equity are not required.INFORMATIONPG STORESPRE-ADJUSTMENT TRIAL BALANCE AS AT28 FEBRUARY 2019Debit (R)Credit (R)Balance sheet accounts sectionCapital870700Drawings234 000Land and buildings608 700Vehicles at cost275 000Equipment at cost203 000Accumulated depreciation on vehicles94 000Accumulated depreciation on equipment70 000Trading inventory140 000Debtors control103 000Provision for bad debts5 000Bank4 000Cash float1 500Petty cash500Creditors control60 000Loan: Tek Bank(12% p.a.)96 000Nominal accounts sectionSales1277 000Cost of sales700 000Sales returns15 000Wages123 000Bank charges4 000Rent income66 000Packing materials37 000Advertising18 000Rates7 000Bad debts2 000Discount allowed1 000Discount received2 000Stationery20 000Interest on loan10 000Water and electricity9 000Insurance16 000Telephone9 0002540 7002540 700ADJUSTMENTS AND ADDITIONAL INFORMATION1.No entry was made for trading inventory that was taken by the proprietor for his personal use, R2000.2.Inventories on 28 February 2019according to physical stocktaking were as follows:2.1Trading inventoryR1350002.2StationeryR20003.The telephone accountof R1000 for February 2019was erroneously paid twice, on 25 February 2019 and 27 February 2019.4.Rent has been received up to 31 January2019.5.A debtor, P. Peter, was declared insolvent. On 28 February 2019, his insolvent estate paid a first and final dividend of 60 cents in the Rand. Anamountof R1800 wasreceivedand recorded. The balance of his account must now be written off.6.The provision for bad debts must be increased by R1000.7.The insurancetotalincludes an amount of R7 200 that was paid for the period 01 November2018to 31 October2019.8.Interest on loan for February 2019has not yet been paid. Interest is not capitalised. Note: A repaymentofR18000 (excluding interest) isexpected to be made in March 2019to reduce the loan balance. 9.Depreciation must be brought into account each year as follows:9.1On vehicles at 20% per annum using the diminishing balance method.9.2On equipment at 15% per annum on cost.Note: Equipment with a cost price of R20000 was purchased and recorded on 01 December 2018.REFER TO THEINCOMPLETEFINANCIAL STATEMENTS THAT FOLLOW AND FILL IN THE MISSING AMOUNTS ANDDETAILS. WHERE APPLICABLE, SHOW YOUR WORKINGS IN BRACKETS.HIGHLIGHT YOUR ANSWERS FOR THE MISSING AMOUNTS OR SHOW THEM IN BOLD PRINT.PG STORESSTATEMENTOF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2019RSales?Cost of sales(700000)Gross profit?Other operating income?Rent income?Discount received2 000Gross operating income?Operating expenses?Wages123 000Bank charges4 000Packing materials37 000Advertising18 000Rates7 000Bad debts?Discount allowed1 000Stationery?Water and electricity9 000Insurance?Telephone?????Operating profit?Interest income0Interest expense?Net profit for the year?PG STORESSTATEMENT OF FINANCIAL POSITIONAS AT 28 FEBRUARY 2019ASSETSRNon-current assets?Property, plant and equipment?Current assets?Inventories?Trade and other receivables?Trade debtors?Provision for bad debts?Prepaid expenses?Accrued income?Cash and cash equivalents6 000Bank4 000Cash float1 500Petty cash500Total assets?EQUITY AND LIABILITIESEquityCapital?Non-current liabilities?Loan: Tek Bank?Current liabilities?Trade and other payables?Creditors control60 000Income received in advance?Accrued expenses??Total equity and liabilities?