QUESTION 2 (20 Marks) REQUIRED Prepare the Statement of Comprehensive Income for the year ended 29 February 2020. Use the following format as a guide: PENTEL TRADERS STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 29 FEBRUARY 2020 Sales Cost of sales Gross profit Other operating income Gross operating income Operating expenses Operating profit Interest income Interest expense Net profit for the year vmc INFORMATION The trial balance, adjustments and additional information given below were obtained from the records of Pentel Traders on 29 February 2020, the end of the financial year. PENTEL TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2020 Debit (R) Credit (R) Balance sheet accounts section Capital 681 800 Drawings 82 000 Land and buildings 489 000 Vehicles at cost 190 000 Equipment at cost 63 000 Accumulated depreciation on vehicles 32 000 Accumulated depreciation on equipment 23 400 Trading inventory 46 000 Debtors control 34 000 Provision for bad debts 1 900 Bank 1 100 Petty cash 100 Creditors control 30 400 Loan: Met Bank (15%) 30 000 Nominal accounts section Sales 420 000 Cost of sales 233 000 Sales returns 5 000 Wages 41 000 Bank charges 3 000 Rent income 27 000 Packing materials 12 000 Advertising 6 000 Rates 4 000 Bad debts 1 000 Discount allowed 2 000 Discount received 700 Stationery 9 000 Interest on loan 4 000 Water and electricity 7 000 Insurance 9 000 Telephone 7 000 1 247 200 1 247 200 vmc Adjustments and additional information 1. A physical count revealed the following inventories on 29 February 2020: 1.1 1.2 Trading inventory Packing materials R43 000 R1 000 2. Received an account from Wheel Centre for replacing the tyres on the motor vehicle, R6 000. No entry has been made for this. 3. The account of debtor, J. Parsons, who owed R1 000 must be written off as irrecoverable. 4. A debtor whose account of R3 000 was overdue for one month must be charged interest at a rate of 12% per annum. 5. The provision for bad debts must be reduced to R1 700. 6. Provide for outstanding interest on loan, R500. 7. The telephone account for February 2020 was due to be paid on 03 March 2020, R700. 8. The insurance account includes the annual building insurance premium that was paid for the period 01 June 2019 to 31 May 2020, R2 400. 9. The bookkeeper did not record an amount of R200 that was reflected on the March bank statement for service fees. 10 Rent has been received for March 2020. Note: The rent was increased by R500 per month with effect from 01 February 2020. 11. Provide for depreciation as follows: 11.1 On vehicles at 20% per annum on the diminishing balance. 11.2 On equipment at 10% per annum on cost. Note: A computer with a cost price of R10 000 was purchased on 01 September 2019. The purchase has been recorded.