Wildberry (Pty) Ltd is a newly founded company which commenced business on the 01 June 2019, after seeing a gap in the market for a boutique Gin distillery. Wildberry (Pty) Ltd rents premises in Springfield, Durban and has multiple distributors around the country. They are planning on exporting their Gin in the near future. Wildberry (Pty) Ltd uses the periodic inventory system. Wildberry (Pty) Ltd is a VAT Vendor. All transactions are VAT inclusive unless otherwise mentioned. In preparation of their financial statements, it was noted that the following transactions have not been recorded.

Extract of balances from the Trial Balance of Wildberry (Pty) Ltd as at 31 May 2020beforetaking into account the additional information:

• Bank
• Receivables
• Payables
• VAT Control account
• PPE
• Additional Information:

R 45 008CrR 748 922

R 819 631

R 38 900CrR 2 987 900

1. A long - term loan of R 580 000 was received by the company from one of directors, Mr Leon King on the 01 May 2020 at a 12% annual interest rate (EFT order). The loan is repayable in full at the end of May 2025. No transactions pertaining to this loan have been recorded.
2. Credit sales to the amount of R 135 800 were made to Jingo Wholesalers on the 28 May 2020, a settlement discount of 2% for 30 days settlement agreed upon. No entries were made.
3. A debt of R 18 900 to debtor P. Timms needs to be written off as irrecoverable.
4. Jingo Wholesalers returned goods to the invoice value of R 15 600 as there were duplications in their order from their part. No entries were made
5. Ditto Ltd a debtor, still needs to be charged R 588 interest on their overdue account, in the Receivables List Ledger (correct in the Receivables control account)
6. A debtor Fresh Ltd paid their account, R 54 677 after 2% settlement discount, directly into the bank account of Wildberry (Pty) Ltd, no entry was recorded. This payment was 60 days overdue and the allowance for discount allowed needs to be reversed, and the shortfall

collected from Fresh Ltd.

7 Interest on the bank overdraft of R 7 208 was directly debited to the bank account for the month of May 2020, no record was made.

8 A correction needs to be made for an incorrect posting from the Sales Journal to the Receivables List Ledger. Credit sales of R 68 700 to Jingo Wholesalers on the 15 May 2020 were erroneously posted to Dingo Wholesalers.

9 A debtor, SHOTS Ltd with a credit balance of R 18 900 needs to be transferred to the Creditors Ledger.

Q.1.1

Prepare the relevant outstanding journal entries in the General Journal of Wildberry (Pty) Ltd for the year ended 31 May 2020, in preparation of the financial statements.Narrations are not required.

(30)

Q.1.2

Complete the Receivables Control account in the General Ledger of Wildberry (Pty) Ltd for the year ended 31 May 2020.

(6)

Q.1.3

Complete the Vat Control account in the General Ledger of Wildberry (Pty) Ltd for the year ended 31 May 2020.

(5)

Q.1.4

Wildberry (Pty) Ltd are considering changing to the perpetual inventory system due to stock challenges. Advise them on the advantages this inventory system would contribute in their business over the periodic inventory system.

(4)