QUESTION TWO [30] Zizu owns a general dealer shop. The following information was provided. List of pre-adjustment balances as at 31 December 2020. R 398 000 25 820 Property, plant and equipment at cost additional information 1) Total accumulated depreciation at 1 January 2020 Fixed deposit: Third Bank.... Inventory: Trade goods.. Trade debtors ...... 100 000 117 000 10 400 Allowance for credit losses. 600 Bank... 106 200 Cash float.. 1 200 283 400 26 480 Capital-Zizu.. Drawings.. Long term borrowing: DLM Finance. Trade creditors.. 50 000 19 100 Sales 763 580 Sales returns 2400 Page 3 of 8 31 200 Rental income Settlement discounts received 1 300 Interest on investment.. 10 000 Credit losses recovered. 240 Cost of sales. 330 800 1 100 Credit losses Packing materials used. 9 400 Insurance 4 500 Telephone 2 800 Advertisements 4 000 Settlement discounts granted 760 Other expenses 70 200 Additional information: 1. The following information is available for Property, plant and equipment: Type of Property, plant and equipment Cost at 31 Dec. 2020 - Accumulated Depreciation at 1 Jan. 2020 - R R Land & buildings 300 000 NIA Vehicle 80 000 22 400 Equipment 18 000 3420 Equipment at cost - R18 000: includes equipment bought for cash at a cost of R4 000 on 1 July 2020. Provide depreciation for the year for all property, plant and equipment as follows: Equipment: 10% per year on the diminishing balance method. Vehicle : 20% per year on the diminishing balance method. 2. Results of a physical stock taken on 31 December 2020 revealed that: 2.1 Trading goods on hand was R114 500, and 2.2 Packing material on hand was R1 960. 3. Advertisement cost of R4 000 is exclusively for an advertising campaign covering the period 1 May 2020 to 28 February 2021. 4. Rental income was received from Zizu's only tenant. The rent includes the January 2021 rental. Rent remained constant over the full period. Page 4 of 8 5. The long term borrowing was taken on 30 September 2020. Interest is payable every 6 months at a rate of 18% per year. 6. Interest on the fixed deposit at Third Bank has not yet been received for November 2020 and December 2020. Interest is calculated at 12% per year. 7. Insurance includes an amount of R1 500 paid for a 12 month period ending on 31 October 2021. 8. The December 2020 telephone account of R330 has not yet been recorded. 9. A debtor's account of R1 000 has long been outstanding. The debtor's insolvent estate paid 60% of the debt. The balance needs to be written-off. 10. It was agreed that the "allowance for credit losses" account needs to be adjusted to show a balance of only R500. Required: Prepare the following for Zizu's General Dealers for the financial year ending 31 December 2020: 2.1 The statement of profit or loss and other comprehensive income, and (25) 2.2 Prepare the columns for only Vehicles and Equipment as they would be shown in the Property, plant and equipment note. Columns for land & buildings and total are not required. (5) Show all workings. Your answer must comply with the requirements of the International Financial Reporting Standards (IFRS) appropriate to this business. QUESTION TWO [30] Zizu owns a general dealer shop. The following information was provided. List of pre-adjustment balances as at 31 December 2020. R 398 000 25 820 Property, plant and equipment at cost additional information 1) Total accumulated depreciation at 1 January 2020 Fixed deposit: Third Bank.... Inventory: Trade goods.. Trade debtors ...... 100 000 117 000 10 400 Allowance for credit losses. 600 Bank... 106 200 Cash float.. 1 200 283 400 26 480 Capital-Zizu.. Drawings.. Long term borrowing: DLM Finance. Trade creditors.. 50 000 19 100 Sales 763 580 Sales returns 2400 Page 3 of 8 31 200 Rental income Settlement discounts received 1 300 Interest on investment.. 10 000 Credit losses recovered. 240 Cost of sales. 330 800 1 100 Credit losses Packing materials used. 9 400 Insurance 4 500 Telephone 2 800 Advertisements 4 000 Settlement discounts granted 760 Other expenses 70 200 Additional information: 1. The following information is available for Property, plant and equipment: Type of Property, plant and equipment Cost at 31 Dec. 2020 - Accumulated Depreciation at 1 Jan. 2020 - R R Land & buildings 300 000 NIA Vehicle 80 000 22 400 Equipment 18 000 3420 Equipment at cost - R18 000: includes equipment bought for cash at a cost of R4 000 on 1 July 2020. Provide depreciation for the year for all property, plant and equipment as follows: Equipment: 10% per year on the diminishing balance method. Vehicle : 20% per year on the diminishing balance method. 2. Results of a physical stock taken on 31 December 2020 revealed that: 2.1 Trading goods on hand was R114 500, and 2.2 Packing material on hand was R1 960. 3. Advertisement cost of R4 000 is exclusively for an advertising campaign covering the period 1 May 2020 to 28 February 2021. 4. Rental income was received from Zizu's only tenant. The rent includes the January 2021 rental. Rent remained constant over the full period. Page 4 of 8 5. The long term borrowing was taken on 30 September 2020. Interest is payable every 6 months at a rate of 18% per year. 6. Interest on the fixed deposit at Third Bank has not yet been received for November 2020 and December 2020. Interest is calculated at 12% per year. 7. Insurance includes an amount of R1 500 paid for a 12 month period ending on 31 October 2021. 8. The December 2020 telephone account of R330 has not yet been recorded. 9. A debtor's account of R1 000 has long been outstanding. The debtor's insolvent estate paid 60% of the debt. The balance needs to be written-off. 10. It was agreed that the "allowance for credit losses" account needs to be adjusted to show a balance of only R500. Required: Prepare the following for Zizu's General Dealers for the financial year ending 31 December 2020: 2.1 The statement of profit or loss and other comprehensive income, and (25) 2.2 Prepare the columns for only Vehicles and Equipment as they would be shown in the Property, plant and equipment note. Columns for land & buildings and total are not required. (5) Show all workings. Your answer must comply with the requirements of the International Financial Reporting Standards (IFRS) appropriate to this business