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QUESTION FOUR ( 2 0 MARKS ) The following information relates to Richfield Distributors: Pre - adjustment trial balance of Richfield Distributors as at 3
QUESTION FOUR
MARKS
The following information relates to Richfield Distributors:
Preadjustment trial balance of Richfield Distributors as at December
The following adjustment must still be accounted for:
Packaging material on hand at December to the value of
The longterm borrowing was entered into on October according to the agreement, interest is payable biannually at a rate of vper annum.
Advertisements includes an amount of R paid for January
Rental income includes an amount in respect of January
Interest on fixed deposit has not yet been received for the last two months of the financial year. Interest is calculated at a rate of per annum.
Insurance includes an amount of R paid for the period November to October
The telephone account of R for December has not yet been paid.
Equipment of Rcost price was purchased on July
Depreciation must be provided as follows:
a Vehicle: per annum on the diminishing balance method
b Equipment: per annum on the diminishing balance method
The account of LooseEnds Ltd a debtor who owes the entity R must still be written off as irrecoverable.
It was determined that on December the allowance for credit losses should amount to R
Required
Prepare the journal entries with narration of the above additional information or adjustments given.
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