QUESTION $3[25$ marks$]$

Rashgard Ltd sells portable waterproof speakers to hypermarkets. You have been

asked to assist in the preparation of the annual financial statements for the year ended

$31$ March $2024.$ The following statement of comprehensive income has been

prepared by the bookkeeper.

R

Retained income $31$ March $202396571$

Sales $283200$

Purchases $112006$

Import duty $16992$

Salaries $35683$

Rent $23081$

Interest $4248$

General expenses $32143$

Profit $43188$

On investigation of the above statement of comprehensive income, you discover the

following;

$1.$ The bookkeeper had not journalised the reversing entry for the accrual at $31$

March $2023$ of rent paid in advance of R $3156$ and sales received in advance

of R$9444.$ Both these amounts are related to April $2023.$ All other reversing

entries have been processed.

$2.$ Interest represents payments of interest for the year on a loan of R$42480.$ The

interest rate is $15\%$ per annum, and there have been no repayments during the

year.

$3.$ The inventory per the statement of financial position at $31$ March $2023$ was

R$8890$ which represented $70$ speakers valued at R$127.$

$4.$ There were $80$ speakers on hand at $31$ March $2024.$ Of these, $8$ were

considered worthless. Rashgard Ltd accounts for inventory on the periodic

using the FIFO basis of allocating costs.

$5.$ The purchases and purchase returns records for the year were as follows;

$9$ HFAC$130-1-$JanJun$2024-$SA$1-$GC$-$V$\mathrm{.}2-25032024$

Purchases

June $396$ units at R$120$ each

October $450$ units at R$132$ each

February $142$ units at R $144$ each

March $56$ units at R$156$ each $($after trade discount$)$

Purchase returns

July $56$ units at R$120$ each

March $12$ units at R$156$ each

$6.$ A Chinese supplier entered the market in late March and was selling its

speakers at R$212$ each. The normal selling price of Rashgard was R$283.$

$7.$ During March $2024,$ a carton of $10$ speakers purchased in March was stolen.

Rashgard is not insured for losses of this nature.

$8.$ No taxation or dividends are payable for the year.

Required;

a$)$ Record the journal entries to finalise the books for the year ended $31$ March $2024$

for items $1,2,6$ and $7$ only. Narrations are not required. If no entry is required,

state this fact and give a reason for your answer. $(10$ marks$)$

b$)$ Prepare the statement of comprehensive income for the year ended $31$ March

$2024,$ taking $(18)$ above into account.