Zen Medicinals $($Pty$)$ Ltd is a company located in the heart of the Free State, specialising in the distribution of high$-$quality naturopathic medicines and supplements to the broader public via its physical locations and online dispensary. They have been in operation for the past $10$ years and their financial year period ends on $30$ September.

Statement of Profit or Loss for the year ending on $30$ September $2023$

R

Sales

$1616175$

Less: Cost of sales

$1309539$

Opening inventory

$550814$

PLUS: Purchases

$758725$

MIN: Closing Inventory

$0$

Gross profit

$306636$

Other income

$331518$

Commission received

$207678$

Interest received

$27000$

Proceeds on sale of equipment

$9350$

Rental income

$87490$

Expenses

$301290$

Bad debts

$29535$

Insurance

$158003$

Salaries and Wages

$56750$

Rent expense

$20845$

Stationery

$8690$

Telephone

$7788$

Water and electricity

$17890$

Profit$/($Loss$)$ for the year

$336864$

Statement of Financial Position as at $30$ September $2023$

R

ASSETS

NON$-$CURRENT ASSETS

$4574460$

Equipment

$9872500$

LESS: Accumulated Depreciation $(1$ October $2022)$

$5807615$

Motor vehicles

$935825$

LESS: Accumulated depreciation $(1$ October $2022)$

$426250$

Fixed deposit: KOVSIE bank

$841335$

CURRENT ASSETS

$368793$

Trade debtors

$217877$

Provision for bad debt

$-23940$

Cash and cash equivalents

$174856$

TOTAL ASSETS

$5784588$

EQUITY AND LIABILITIES

EQUITY

$5573212$

Share capital

$2958000$

Retained earnings

Opening balance

$2452413$

Profit$/($Loss$)$ for the year

$336864$

LESS: Drawings

$174790$

NON$-$CURRENT LIABILITIES

Loan: Zuzu Bank

$41000$

CURRENT LIABILITIES

Trade creditors

$170376$

TOTAL EQUITY AND LIABILITIES

$5784588$

Additional Information:

$1.$

Physical stock stated that inventory to the value of R $25230$ was counted

$2.$

$1$ April $2023,$ Zen bought a new Cash register and POS system as the old system was no longer supported by the vendor. This Cash register and POS system was purchased for R$50250.$ The cash purchase was correctly accounted for.

$3.$

On $30$ September $2023,$ it was noted that sales totalling R$15000$ to a debtor

was incorrectly recorded as R$51000.$ The cost of sales was, however recorded correctly.

$4.$

Equipment sold on $1$ February $2023$ originally cost R$29000$ and was purchased on $1$ March $2021.$ This was the only equipment sold during this year. Only the selling price was recorded.

$5.$

Zen$$s depreciation accounting policy states the following:

$5\mathrm{.}1$

Equipment has a useful life of $3$ years and is depreciated based on the straight$-$line method. No residual value is applicable.

$5\mathrm{.}2$

Vehicles have a useful life of $4$ years and are depreciated based on the reduced balanced method over the related useful life. No new vehicles were purchased during the current year. No residual value is applicable to this asset type.

$6.$

Zen paid their annual liability insurance on $1$ June $2023$ totalling R$60000.$ Insurance premiums at subjected to a $5\%$ escalation on $1$ August every year.

$7.$

Received the rental for the small offices rented to a local Reiki specialist. This payment was received on the $1$ August and paid in full for the $6-$month contract signed on the date of payment. This was Zen$$s only rental contract for the year.

$8.$

Received the water and electricity account for September $2023$ and October $2023$ on the $15$th of November $2023.$ The accounts were R $4980$ and R $3851$ respectively and has not yet been included in the financial records.

$9.$

The long$-$term loan carries interest at $4\mathrm{.}5\%.$ On $28$ February $2023,$ a capital payment of R$25000$ was made and recorded in the account immediately. Provide for the outstanding interest.

$10.$

Zen withdrew R$100000$ out of their existing investment at Kovsie Bank on $1$ June $2023.$ The interest of this investment changed from $6\mathrm{.}5\%$ to $7\mathrm{.}25\%$ on $1$ July $2023.$ No interest has yet been received.

$11.$

Due to the recent decay in the economic environment, Zen $($Pty$)$ Ltd expects that $15\%$ of outstanding debtors at year$-$end may become uncollectable. The provision for bad debts still need to be made.

$12.$

During the recent stock count it was noted that R $500$ of stationary was not yet used

$13.$

Due recent growth in operations, $3$ new staff members were employed in August $2023.$ However, they did not receive their sign on bonus, of R$2000$ per individual due to a clerical error. They were reimbursed on the $1$st of October $2023$

Required

Make the year$-$end adjustments and prepare the final financial statements for the year