Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 25 820 100 000 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 ....... Allowance for credit losses 117 000 10 400 600 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. 2 400 Rental income.. 31 200 1 300 Settlement discounts received Interest on investment.. Credit losses recovered. 10 000 240 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: Accumulated Type of Property, plant and equipment Cost at 31 Dec. 2020 - Depreciation at R 1 Jan. 2020 - R Land & buildings 300 000 N/A Vehicle 80 000 22 400 Equipment 18 000 3 420 Additional information: 1. The following information is available for Property, plant and equipment: Type of Property, plant and equipment Cost at Accumulated 31 Dec. 2020 - Depreciation at R 1 Jan. 2020 - R Land & buildings 300 000 N/A Vehicle 80 000 22 400 Equipment 18 000 3 420 Equipment at cost - R18 000: includes equipment bought for cash at a cost of R4 000 on 1 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. 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 Prepare the columns for only Vehicles and Equipment as they would 2.2 be shown in the Property, plant and equipment note. Columns for land & buildings and total are not required. Show all workings. Your answer must comply with the requirements of the International Financial Reporting Standards (IFRS) appropriate to this business

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Governmental Accounting Auditing And Financial Reporting

Authors: Stephen J. Gauthier

1st Edition

0891252754, 978-0891252757

More Books

Students also viewed these Accounting questions

Question

What attracts you about this role?

Answered: 1 week ago

Question

How many states in India?

Answered: 1 week ago

Question

HOW IS MARKETING CHANGING WITH ARTIFITIAL INTELIGENCE

Answered: 1 week ago