Question 5

The trial balance, adjustments and additional information given below were extracted from the accounting records of C ONCHA Traders on the 28 February 2017, the end of financial year.

Required

Prepare the Statement for 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 ADJUSTNENTS TRIAL BALANCE ON 28 FEBRAURY 2018
	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	2000
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	4000
Interest on mortgage loan	6000
Commission income		5 000
	906 000	906 000

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 don on the 28 February 2017, trading inventory on hand amounted to R68 000.

2. Consumables stores used during the financial year amounted to R1800, according to 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 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 R 1500.

6. The telephone account for February 2017 has not yet been paid, R 700.

7. The rental agreements signed with the lessor (landlord)are as follows

R 30 000 for the period 01 January to 31 December 2016 AND.

R 36 000 for the period 01 January to 31 December 2017.

Make the necessary arrangement

8 The loan from Aries Bank was obtained on September 2016.Provide for the outstanding interest. (Interest is not capitalised.) R 20 000 of the amount owing to Aries Bank will be repaid during the next financial year.

9 The insurance total includes an annual premium of R1800 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 debit with an amount of R1000 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 R 2000, has not been recorded.