The trial balance and additional information were extracted from the accounting records of Mimosa Traders on 28 February 2019, the end of the financial year.

MIMOSA TRADERS

PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2019

	Debit (R)	Credit (R)
Balance sheet accounts section
Capital		750 000
Drawings	60 000
Land and buildings	570 000
Vehicles at cost	420 000
Equipment at cost	300 000
Accumulated depreciation on vehicles		240 000
Accumulated depreciation on equipment		168 000
Fixed deposit: Sipho Bank	90 000
Trading inventory	77 310
Debtors control	88 800
Allowance for credit losses		4 500
Bank	36 990
Cash float	4 500
Creditors control		83 340
Mortgage loan: Sipho bank (16% p.a.)		150 000
Nominal accounts section
Sales		943 950
Cost of sales	270 000
Sales returns	6 000
Salaries and wages	267 000
Bad debts	8 400
Consumable stores	13 680
Rates and taxes	35 700
Motor expenses	60 000
Repairs	10 770
Telephone	20 310
Electricity and water	30 370
Bank charges	3 770
Insurance	38 940
Interest on a mortgage loan	12 000
Interest on fixed deposit		6 750
Rent income		78 000
	2 424 540	2 424 540

Additional information:

1. On 28 February 2019 a cheque for R400 was received from a debtor whose account was previously written off. No entry has been made for this.

2. A debtor, G. Roberts, was declared insolvent. An amount of R200, which represented 40% of the debt, was received from this insolvent estate but not yet recorded. The balance of his account must also be written off.

3. The allowance for credit losses must be increased by R500.

4. Stocktaking on 28 February 2019 revealed the following stock on hand:

4.1 Trading inventory R77 000
4.2 Consumable stores R500

5. Part of the building has been sublet since 01 March 2018 at a monthly rental of R6 000. Make the necessary adjustment to rent income

6. The insurance total includes an annual insurance premium of R4 800 that was paid for the next period 01 June 2018 to 31 May 2019

7. Provide for outstanding interest on the mortgage loan. The loan was obtained on 1 March 2018

8. Interest of R2 250 was still owing on the fixed deposit on 28 February 2019. The fixed deposit matures on 01 September 2019.

9. The bank statement for February 2019 was received after the cash journals were posted to the ledger. The following must be still recorded:

Service fees R270
Cash deposit fee R120

10. Provide for depreciation as follows:

10.1 On equipment at 15% p.a. on cost.
10.2 On vehicles at 20% p.a. on the diminishing balance. Note: A vehicle that cost R120 000 was purchased on 01 December 2018. The purchase has been recorded.

QUESTION THREE 
Record journal entries in the books of Mimosa Traders for February 2019
NB: Narrations must be omitted.

QUESTION FOUR 
Prepare a statement of profit & loss and comprehensive income for the year ended 28 February 2019