Question 3 (Marks: 30) The following pre-adjustment trial balance appeared in the books of Central Perk Furniture Store at the end of their financial year. IGNORE VAT. B6 Pre-adjustment trial balance of Central Perk Furniture Store for the year ended 31 March 2020. Fol. Debit (R) Credit (R) Statement of financial position section Capital B1 500 000.00 Drawings B2 25 000.00 Land and buildings B3 865 000.00 Vehicles B4 220 987.00 Equipment B5 156 760.00 Accumulated depreciation: Equipment 54 320.00 (1 April 2019) Accumulated Depreciation: Vehicles B7 22 580.00 (1 April 2019) Bank B8 22 430.00 Debtors Control 35 600.00 Allowance for Credit Losses- 1 April 2019 B10 1 780.25 Petty Cash B11 1 378.98 Trading inventory (1 April 2019) B12 27 865.43 Mortgage Loan 287 650.00 Creditors Control B14 31 420.00 SARS(UIF/SDL/PAYE) B15 23 290.65 B9 B13 The Independent Institute of Education (Pty) Ltd 2020 Page 5 of 7 Fol. Debit (R) Credit (R) N1 1 167 371.07 N2 25 340.87 N3 520 389.76 N4 76 540.32 NS 10 987.45 N6 63 200.00 N7 5 320.48 N8 2478.90 N9 17 430.22 Nominal accounts section Sales Sales Returns Purchases Purchases returns Service Income Rent Income Interest on debtors accounts Credit losses recovered Telephone and fax Credit Losses Office refreshments Cleaning materials Stationery Railage Inwards Insurance Electricity Interest on creditors Accounts Advertising Wages and Salaries N10 9650.55 N11 6 540.76 N12 5 340 98 N13 4498.27 N14 1976.54 N15 50 600.00 N16 12 356.45 N17 5 478.67 N18 26 754.23 N19 156 430.28 Entertainment N20 14 560.70 Fuel N21 34 569.43 2 246 939.12 2 246 939.12 Additional Information: 1. Provide for depreciation as follows: On motor vehicles: 15% per annum on reducing balance method. On equipment: 10% on cost. Note a new piece of equipment was purchased on 1 September 2019 costing R54 000. This has been recorded properly. The Independent Institute of Education (Pty) Ltd 2020 Page 6 of 7 20 2020 2. 3. The owner took trading inventory for personal use. The selling price was R4 800 (VAT IS not applicable). The mark up is 50% on cost price. The transaction has not been processed. The periodic inventory method is utilised by Central Perk Furniture Store. The telephone and fax invoice for March 2020 of R2 430.15 has not yet been paid. A debtor, C. Bing who owed R6 500 has been declared insolvent. The business received 35 cents on the Rand from the insolvent estate. This transaction must still be recorded. The remaining balance may be written off as irrecoverable. The allowance for credit losses must be adjusted to the amount of R1 600. Insurance expenses for April 2020 have been prepaid. The monthly premium has remained the same for the past two years. Rent income for April 2020 of R4 200 has been received in advance. Service income of Rs 430 has not been received for March 2020. The stock take revealed the following: 5. 6. 7. 8. 9. Trading inventory - R15 640.32 Cleaning materials-R1 432.76 Stationery-R568.43 Required: Journalise the adjustments (First voucher number = No. 101). Note - The subsidiary journals have been closed off, so all additional transactions are recorded in the general journal. No journal narrations or folio numbers are required. You are not required to journalise the closing transfers Question 3 (Marks: 30) The following pre-adjustment trial balance appeared in the books of Central Perk Furniture Store at the end of their financial year. IGNORE VAT. B6 Pre-adjustment trial balance of Central Perk Furniture Store for the year ended 31 March 2020. Fol. Debit (R) Credit (R) Statement of financial position section Capital B1 500 000.00 Drawings B2 25 000.00 Land and buildings B3 865 000.00 Vehicles B4 220 987.00 Equipment B5 156 760.00 Accumulated depreciation: Equipment 54 320.00 (1 April 2019) Accumulated Depreciation: Vehicles B7 22 580.00 (1 April 2019) Bank B8 22 430.00 Debtors Control 35 600.00 Allowance for Credit Losses- 1 April 2019 B10 1 780.25 Petty Cash B11 1 378.98 Trading inventory (1 April 2019) B12 27 865.43 Mortgage Loan 287 650.00 Creditors Control B14 31 420.00 SARS(UIF/SDL/PAYE) B15 23 290.65 B9 B13 The Independent Institute of Education (Pty) Ltd 2020 Page 5 of 7 Fol. Debit (R) Credit (R) N1 1 167 371.07 N2 25 340.87 N3 520 389.76 N4 76 540.32 NS 10 987.45 N6 63 200.00 N7 5 320.48 N8 2478.90 N9 17 430.22 Nominal accounts section Sales Sales Returns Purchases Purchases returns Service Income Rent Income Interest on debtors accounts Credit losses recovered Telephone and fax Credit Losses Office refreshments Cleaning materials Stationery Railage Inwards Insurance Electricity Interest on creditors Accounts Advertising Wages and Salaries N10 9650.55 N11 6 540.76 N12 5 340 98 N13 4498.27 N14 1976.54 N15 50 600.00 N16 12 356.45 N17 5 478.67 N18 26 754.23 N19 156 430.28 Entertainment N20 14 560.70 Fuel N21 34 569.43 2 246 939.12 2 246 939.12 Additional Information: 1. Provide for depreciation as follows: On motor vehicles: 15% per annum on reducing balance method. On equipment: 10% on cost. Note a new piece of equipment was purchased on 1 September 2019 costing R54 000. This has been recorded properly. The Independent Institute of Education (Pty) Ltd 2020 Page 6 of 7 20 2020 2. 3. The owner took trading inventory for personal use. The selling price was R4 800 (VAT IS not applicable). The mark up is 50% on cost price. The transaction has not been processed. The periodic inventory method is utilised by Central Perk Furniture Store. The telephone and fax invoice for March 2020 of R2 430.15 has not yet been paid. A debtor, C. Bing who owed R6 500 has been declared insolvent. The business received 35 cents on the Rand from the insolvent estate. This transaction must still be recorded. The remaining balance may be written off as irrecoverable. The allowance for credit losses must be adjusted to the amount of R1 600. Insurance expenses for April 2020 have been prepaid. The monthly premium has remained the same for the past two years. Rent income for April 2020 of R4 200 has been received in advance. Service income of Rs 430 has not been received for March 2020. The stock take revealed the following: 5. 6. 7. 8. 9. Trading inventory - R15 640.32 Cleaning materials-R1 432.76 Stationery-R568.43 Required: Journalise the adjustments (First voucher number = No. 101). Note - The subsidiary journals have been closed off, so all additional transactions are recorded in the general journal. No journal narrations or folio numbers are required. You are not required to journalise the closing transfers