SECTION A

[100 Marks]

Answer ALL questions in this section.

QUESTION 1

REQUIRED Use the information provided below to prepare the Statement of Comprehensive Income for the year ended 28 February 2022.

the end of the financial year.

WHETSTONE STORES

PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022

Debit (R)	Credit (R)
Balance sheet accounts section
Capital		3 759 100
Drawings	310 000
Land and buildings	2 840 000
Vehicles at cost	2 100 000
Equipment at cost	1 500 000
Accumulated depreciation on vehicles		1 200 000
Accumulated depreciation on equipment		840 000
Investment: Med Bank (8 % p.a.)	450 000
Debtors control	444 000
Provision for bad debts		22 000
Bank	602 700
Creditors control		418 000
Loan: Med Bank (18% p.a.)		750 000
Nominal accounts section
Sales		5 600 000
Opening stock	200 000
Purchases	2 150 000
Purchases returns		118 000
Sales returns	60 000
Salaries and wages	1 234 000
Bad	42 000
Stationery	68 000
Rates and taxes	178 000
Motor expenses	300 000
Repairs and maintenance	52 000
Telephone	100 000
Electricity and water	150 000
Bank charges	18 000
Advertising	194 000
Interest on mortgage loan	130 000
Interest on investment		32 000
Rent income		383 600
	13 122 700	13 122 700

Adjustments and additional information

1. According to stocktaking done on 28 February 2022, the following were on hand:

1.1 Trading inventory R240 000 1.2 Stationery R6 000.

2. A debtor who was declared insolvent paid R4 200, which represented 60% of the amount owed, to Whetstone Stores. The amount that was received has been recorded but the rest of his account must now be written off.

3. The provision for bad debts must be adjusted to R20 000.

4. Interest is outstanding on the investment, which was made on 01 February 2021. The maturity date is 31 July 2022.

5. The long-term loan from Med Bank was obtained on 01 March 2021. A repayment of R100 000 was made and recorded on 31 August 2021. Provide for the outstanding interest. Interest is not capitalised.

6. An account for R2 000 to replace broken window panes has been received. This has not been recorded and payment was due to be made during March 2022.

7. The advertising amount includes a contract for R30 000, in respect of monthly advertisements of equal value, that was taken for the period 01 December 2021 to 31 May 2022.

8. Rent has been received for the period 01 March 2021 to 31 March 2022. Note: Rent was increased by 10% with effect from 01 September 2021.

9. The telephone account for February 2022 was due to be paid on 02 March 2022, R10 000.

10. Provide for depreciation as follows:

10.1 On vehicles at 20% p.a. on the diminishing balance.

10.2 On equipment at 10% p.a. on cost.