SECTION A Answer ALL questions in this section. QUESTION 1 [100 Marks] Adjustments and additional information (20 Marks) 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. REQUIRED Use the information provided below to prepare the Statement of Comprehensive Income for the year ended 28 February 2022. INFORMATION 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. The trial balance, adjustments and additional information given below were extracted from the accounting records of Whetstone Stores on 28 February 2022, the end of the financial year. 3. The provision for bad debts must be adjusted to R20 000. 4. WHETSTONE STORES PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022 5. Debit (R) Credit (R) Balance sheet accounts section Capital 3 759 100 Drawings 310 000 6. Land and buildings 2 840 000 Vehicles at cost 2 100 000 Interest is outstanding on the investment, which was made on 01 February 2021. The maturity date is 31 July 2022. 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. 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. Equipment at cost 1 500 000 7. Accumulated depreciation on vehicles 1 200 000 Accumulated depreciation on equipment 840 000 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. Investment: Med Bank (8 % p.a.) 450 000 8. Debtors control Provision for bad debts Bank 444 000 22 000 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. 602 700 9. Creditors control 418 000 10. Loan: Med Bank (18% p.a.) 750 000 The telephone account for February 2022 was due to be paid on 02 March 2022, R10 000. Provide for depreciation as follows: Nominal accounts section Sales Opening stock 10.1 On vehicles at 20% p.a. on the diminishing balance. 5 600 000 10.2 200 000 On equipment at 10% p.a. on cost. Purchases Purchases returns Sales returns Salaries and wages 2 150 000 118 000 60 000 1 234 000 42 000 Bad debts 68 000 Stationery 178 000 Rates and taxes 300 000 Motor expenses Repairs and maintenance 52 000 100 000 Telephone 150 000 Electricity and water 18 000 Bank charges 194 000 Advertising Interest on mortgage loan Interest on investment Rent income 130 000 13 122 700 32 000 383 600 13 122 700