Question
QUESTION 5 FINANCIAL STATEMENTS (20) The trial balance, adjustments and additional information given below were extracted from the accounting records of Concha Traders on 28
QUESTION 5 FINANCIAL STATEMENTS (20)
The trial balance, adjustments and additional information given below were extracted from the accounting records of Concha Traders on 28 February 2017, the end of the financial year.
REQUIRED
Prepare the Statement of Financial Position of Concha Traders as at 28 February 2017. The notes to the financial statements are not required. Where applicable, show calculations in brackets.
INFORMATION
CONCHA TRADERS
PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017
Debit (R)
Credit (R)
Balance sheet accounts section
Capital
162 000
Drawings
70 000
Vehicles at cost
180 000
Equipment at cost
120 000
Accumulated depreciation on vehicles
90 000
Accumulated depreciation on equipment
38 000
Trading inventory
70 000
Debtors control
32 000
Provision for bad debts
4 000
Bank
22 000
Cash float
2 000
Creditors control
40 000
Mortgage loan: Aries Bank (16% p.a.)
80 000
Nominal accounts section
Sales
485 000
Cost of sales
240 000
Sales returns
5 000
Salaries and wages
84 000
Bad debts
5 000
Consumable stores
2 000
Rent expense
28 000
Motor expenses
15 000
Bad debts recovered
2 000
Telephone
7 000
Electricity and water
11 000
Bank charges
3 000
Insurance
4 000
Interest on mortgage loan
6 000
Commission income
5 000
906 000
906 000
MANCOSA: BCOM (SUPPLY CHAIN MANAGEMENT) YEAR 1
PROGRAMME HANDBOOK: JANUARY 2018 INTAKE
72
72
Adjustments and additional information
The net profit according to the Statement of Comprehensive Income, after taking the following into account, was R38 970:
1.
According to physical stocktaking done on 28 February 2017, trading inventory on hand amounted to R68 000.
2.
Consumable stores used during the financial year amounted to R1 800, according to a physical count.
3.
No entry has been made for a commission of 10% earned but not received on 500 items that were sold for R60 each.
4.
No entry has been made for a cheque for R600 that was received 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 as well.
5.
The provision for bad debts must be decreased to R1 500.
6.
The telephone account for February 2017 has not yet been paid, R700.
7.
The rental agreements signed with the lessor (landlord) are as follows:
R30 000 for the period 01 January 2016 to 31 December 2016, and
R36 000 for the period 01 January 2017 to 31 December 2017.
Make the necessary adjustment.
8.
The loan from Aries Bank was obtained on 01 September 2016. Provide for the outstanding interest. (Interest is not capitalised.) R20 000 of the amount owing to Aries Bank will be repaid during the next financial year.
9.
The insurance total includes an annual premium of R1 800 that was paid for the period
01 June 2016 to 31 May 2017.
10.
The bank statement for February 2017 reflected bank charges of R180 that have not yet been recorded.
11.
The electricity and water account was debited with an amount of R1 000 for the personal electricity account of the proprietor, that was paid for with a business cheque.
12.
Provide for depreciation as follows:
12.1
On equipment at 15% per annum on cost.
12.2
On vehicles at 25% per annum on the diminishing balance.
13.
An account received from Heidi Motors to replace two tyres on the delivery vehicle of the business, R2 000, has not been recorded.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started