QUESTION 3 (20 MARKS) REQUIRED Prepare the Statement of Financial Position as at 28 February 2022. The notes to the financial statements are not required. Show workings in the space provided in the answer book. INFORMATION The trial balance, adjustments and additional information given below were extracted from the accounting records of Metro Limited on 28 February 2022, the end of the financial year. METRO LIMITED PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022 Debit (R) Credit (R) Balance sheet accounts section Ordinary share capital (100 000 shares) 2 000 000 Retained earnings 620 000 Vehicles at cost 1 800 000 Equipment at cost 1 200 000 Accumulated depreciation on vehicles 900 000 Accumulated depreciation on equipment 380 000 Trading inventory 700 000 Debtors control 320 000 Provision for bad debts 40 000 Bank 1 820 000 Cash float 20 000 Creditors control 400 000 South African Revenue Services: Company tax 100 000 Long-term loan: Aries Bank (16% p.a.) 800 000 Nominal accounts section Sales 4 850 000 Cost of sales 2 400 000 Sales returns 50 000 Salaries and wages 840 000 Bad debts 50 000 Consumable stores 20 000 Rent expense 280 000 Motor expenses 150 000 Bad debts recovered 20 000 Telephone 70 000 Electricity and water 110 000 Bank charges 30 000 Insurance 40 000 Interest on mortgage loan 60 000 Commission income 50 000 10 060 000 10 060 000 Adjustments and additional information 1. According to physical stocktaking done on 28 February 2022, trading inventory on hand amounted to R680 000. 2. Consumable stores unused according to stocktaking amounted to R2 000 on 28 February 2022. 3. No entry has been made for a commission of 10% earned but not received on 500 items that were sold for R600 each. 4. Received a cheque for R6 000 from an insolvent debtor, J. Marsh, who was only able to pay 30% of her debt. The balance of her account must now be written off. No entries were made for these transactions. 5. The provision for bad debts must be decreased to R15 000. 6. The telephone account for February 2022 was due to be paid on 03 March 2022, R7 000. 7. The rental agreements signed with the lessor (landlord) are as follows: R300 000 for the period 01 January 2021 to 31 December 2021, and R360 000 for the period 01 January 2022 to 31 December 2022. Make the necessary adjustment. 8. The loan from Aries Bank was obtained on 01 September 2021. Provide for the outstanding interest. (Interest is not capitalised.) Loan repayments (excluding interest) are expected to amount to R120 000 in the next financial year. 9. The insurance total includes an annual premium of R18 000 that was paid for the period 01 June 2021 to 31 May 2022. 10. The bank statement for February 2022 reflected bank charges of R1 800 that have not been recorded. 11. The electricity and water statement for February 2022 included an amount of R10 000 for a deposit required by the municipality. This was recorded in the water and electricity account. 12. Provide for depreciation as follows: 12.1 On equipment at 15% per annum using the fixed instalment method. 12.2 On vehicles at 25% per annum on the carrying value (as at 01 March 2021). 13. An account received from Heidi Motors to replace the tyres on the delivery vehicle of the business, R20 000, has not been recorded. 14. The profit after tax for the year ended 28 February 2022, after taking the above into account, was R272 790. 15. The company tax for the financial year amounted to R116 910. 16. The directors proposed a final dividend of 36 cents per share.