QUESTION TWO 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...... 100 000 117 000 Trade debtors 10 400 Allowance for credit losses. 600 Bank... 106 200 Cash float.. 1 200 Capital-Zizu... 283 400 Drawings 26 480 Long term borrowing: DLM Finance.... 50 000 Trade creditors........ 19 100 Sales 763 580 Sales returns.. 2 400 Page 3 of 8 Rental income Settlement discounts received 31 200 1 300 10 000 Interest on investment Credit losses recovered Cost of sales Credit losses 240 330 800 Packing materials used 1 100 Insurance 9 400 Telephone 4 500 2800 Advertisements 4000 Settlement discounts granted Other expenses 760 70 200 Additional Information: 1. The following information is available for Property, plant and equipment: Type of Property, plant and equipment Cr 31 Accumulated - 2020 - Depreciation at R 1 Jan. 2020-R Land & buildings 300 000 NA 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 21 Trading goode on hand was R114 500, and 22 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 2001. 4. Rental income was received from Zaru's only want. The rent includes the January 2011 rental. Rent remained constant over the il 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: The statement of profit or loss and other comprehensive income, and 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 & bulldings and total are not required. 2.1 (5) Show all workings. Your answer must comply with the requirements of the International Financial Reporting Standards (IFRS) appropriate to this business