QUESTION 3 FINANCIAL STATEMENTS OF A COMPANY (20) REQUIRED

Use the trial balance, additional information and adjustments given below to prepare the Statement of Comprehensive Income of Selfie Limited for the year ended 28 February 2018. SELFIE LIMITED PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2018

Balance sheet accounts section	Debit(DR)	Credit(CR)
ordinary share capital		416 000
retained earnings		121 700
land and buildings at cost	480 000
equipment at cost	213 000
vehicles at cost	175 000
accumulated depreciation on equipment		88 000
accumulated depreciation on vehicles		44 000
trading inventory	45 000
debtors control	50 000
provision for bad debts		3 000
Bank overdraft		14 600
creditors control		65 000
Loan:Pano Bank(18% p.a)		50 000
SARS(company tax)	42 800
Nominal accounts section
sales		936 000
cost of sales	356 000
sales returns	24 000
advertising	30 000
stationery	12 000
bad debts	2 000
discount allowed	3 000
discount received		3 000
electricity and water	37 000
telephone	20 000
interest on overdraft	500
directors fees	44 000
audit fees	12 000
insurance	7 000
salaries	190 000
bank charges	5 000
rent income		26 000
municipal rates	20 000
	1 767 300	1 767 300

ADDITIONAL INFORMATION AND ADJUSTMENTS

1. According to physical stocktaking, the following inventories were on hand on 28 February 2018: * Trading inventory R42 000 * Stationery R1 000

2. Advertising includes a payment of R6 000 for advertisements that will be published monthly for the period 01 January 2018 to 30 June 2018.

3. Part of the building has been let to a tenant since 01 March 2017. Rent amounts to R2 000 per month. Make the necessary adjustment.

4. Write off the account of debtor, P. Paul, R300.

5. The provision for bad debts must be decreased to R2 500.

6. Directors fees have been paid up to 31 January 2018. A third director was employed from 01 February 2018. The three directors earn the same remuneration. Provide for the fees still due.

7. The loan from Pano Bank was obtained on 01 February 2018. Provide for the outstanding interest on loan.

8. A notice from the municipality indicated that the rates assessment for the year ended 28 February 2018 has been finalised and it amounts to R24 000 for the financial year.

9. Provide for depreciation as follows: * On vehicles at 20% per year using the diminishing balance method. * On equipment at 15% per year on cost.

10. The company tax for the year ended 28 February 2018 amounts to R40 140.