Question 2(Marks:30)

Tedsad Stores has been in business for a year and the following information was extracted from the business' books. The financial year end is February, Tedsad Stores is NOT a VAT vendor and uses the Perpetual Inventory system.

Preadjustment Trial Balance on 29 February 2020

Statement of Financial Position section Fol Debit (R) Credit (R)

Capital B1 270 000

Drawings B2 20 000

Land and Buildings B3 190 000

Vehicles at cost B4 140 000

Equipment at cost B5 100 000

Accumulated depreciation on vehicles B6 80 000

Accumulated depreciation on equipment B7 56 000

Fixed deposit B8 30 000

Trading Inventory B9 25 770

Debtors Control B10 29 600

Allowance for credit losses B11 2 000

Bank B12 12 330

Cash Float B13 1 500

Creditors Control B14 27 780

Mortgage Loan B15 48 000

Nominal accounts section

Sales N1 268 400

Cost of Sales N2 90 000

Sales Returns N3 2 000

Salaries and Wages N4 59 000

Credit Losses N5 2 800

Consumable Stores N6 4 560

Advertising N7 11 900

Maintenance and repairs N8 27 590

Telephone N9 6 770

Electricity and water N10 6 790

charges N11 4 590

Insurance N12 12 980

Rent Income N13 26 000

778 180 778 180

Adjustments not taken into account:

1) An account for advertising, R300, is still owing to the local newspaper and has not been recorded.

2) The rent for March 2020 has already been received. There were no increases in rent during the year.

3) Insurance includes an amount of R3 450 in respect of the next financial year

4) The account of a debtor, D Moss, must be written off, R300.

5) The interest on the fixed deposit, R2 550 had not yet been received from the bank. 6) After the annual stocktake, the following items were on hand:

Trading InventoryR25 000

Consumable Stores R560

7) Depreciation for the year has not yet been recorded: VehiclesR28 000

Equipment R15 000

Required:

Q.2.1 Prepare the statement of profit or loss and other comprehensive income of Tedsad Stores for the year ended 29 February 2020.

Q.2.2 Prepare the trade and other receivables note to the financial statements for the year ended 29 February 2020.