Question

In: Accounting

QUESTION THREE [20] The following list of balances was taken from the books of Orange Traders,...

QUESTION THREE [20]

The following list of balances was taken from the books of Orange Traders, a fruit and vegetable distributor as at 28 FEBRUARY 2019, the end of the financial year: Capital	60500
Drawings	3 400
Loan: NRB	70 000
Inventory: 1 March 2018	13 760
Provision for bad debts	150
Sales	250620
Purchases	116040
Sales returns	250
Purchases returns	1 150
Rent income	10 500
Salaries and wages	77 500
Railage on sales	1 600
Interest on loan	6 300
Packing material	3 600
Discount received	400
Bad debts	300
Stationery	5 400
Insurance	660
Printing	1 350
Railage on purchases	2 500

Additional Information:

(a) Inventory on hand at 28 February 2019 amounts to R 15 350.

(b) Depreciation must be provided as follows: Vehicles R 3 400

Equipment R 560

(c) The loan was granted on 1 March 2017 at 12% p.a., payable every three months.

Interest for the period 1 December 2018 to 28 February 2019 is payable on

1 March 2019.

(d) A store room was sublet from 1 June 2018 at R 1 050 per month.

(e) An amount of R120 was paid to Vesta Insurers as an advance premium for March 2019.

(f) An account of R1 350 was received from Prints Printers for the printing of

documents. This must still be recorded.

Required:

Prepare the Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2019.

Expert Solution

Ans.

Orange Traders

Income Statement for the year ended feb. 28th, 2019

Particulars

Amount

(Revenue)

Gross Sales

2,50,620

Less: Sales Return

-250

Net Sales

2,50,370

Rent Income

10500

Rent- Sublet (1050*9)

9450

Discount Received

400

Total Revenue

2,70,720

(Expenses)

Opening inventory

13760

Add: Purchases

116040

Less: Purchase Return

-1150

Less: Closing Inventory

-15350

Add: Railage on purchase

2500

Cost of Goods Sold

115800

Salary & wages

77500

Railgare on sales

1600

Packing Materials

3600

Bad Debts

300

Stationery

5400

Insurance (660 - 120)

540

Printing

1350

Depreciation (3400+560)

3960

Interest on loan

6300

Add: Outstanding Interest

2100

( 70000*12/100*3/12)

Total Expenses

218450

Net Profit (Revenue - Expenses) 52,270

Notes:

1. It is assumed that which store room was sublet is other than on which rent of R 10500 was received and it is accrued.

2. Prepaid Insurance premium R 120 is reduced from insurance paid amount as the same was for march 2019 month.

3. Outstanding of R 1350 was provided in printing expenses as the same was payable as on 28.02.2019.

ekkarill92 answered 2 years ago

QUESTION 1 The following list of balances was extracted from the books of Ketumbar Enterprise as...

QUESTION 1 The following list of balances was extracted from the books of Ketumbar Enterprise as at 30 June 2019. RM Purchases 84,750 Sales 149,750 Return inwards 3,250 Return outwards 2,250 Drawings 4,750 Inventory (1 July 2018) 12,950 Buildings 79,750 Motor vehicles (cost RM34,750) 22,150 Fixtures and fittings (cost RM24,250) 19,350 Cash at bank 15,600 Salaries 16,550 Carriage inwards 3,150 Carriage outwards 4,300 Account receivable 29,750 Account payable 14,750 Water and electricity 3,640 Insurance 2,160 Provision for...

The books of Subuko traders in tea showed the following balances as at 31 March 2018:...

The books of Subuko traders in tea showed the following balances as at 31 March 2018: Shs. Opening stock of tea 100,000 Purchases – Tea 400,000 Salaries paid 80,000 Buildings 95,000 Cash in hand 2,000 Cash at bank 135,000 Rent, rates and council taxes 15,000 Insurance premium paid 3,000 Miscellaneous receipts 10,000 Sales 720,000 Discounts allowed 4,750 Bad debts 3,250 Building repairs 2,900 Miscellaneous expenses 8,700 Advertisement 20,000 Commission to sales manager 32,400 Furniture and fittings 35,000 Air conditioners 30,000...

“The following balances were taken from Jane's books who is a sole trader and operates a...

“The following balances were taken from Jane's books who is a sole trader and operates a catering business. Jane's trial balance for the year to 30th June 2019 was as follows: Trial Balance Dr (£) Cr (£) Equipment at cost 42,000 Accumulated depreciation of equipment as at 1st July 2018 35,000 Inventory as at 1st July 2018 50,800 Debtors 32,000 Bank / cash 112,678 Creditors 23,027 Provision for doubtful debts as at 1st July 2018 1,280 Long term...

The following account balances are taken from the books of Country Club on 31 December 2017....

The following account balances are taken from the books of Country Club on 31 December 2017. Revenues and expenses are for the year ended 31 December 2017. The retained profits balance is as at 1 January 2017. Account Value ($) Accounts Receivable 29826 Accounts Payable 25242 Promotional Expense 54245 Cash 5420.0 Food Sales 15215 Cost of food sold 13080 Dividend payments 8138 Electricity Expense 6385 Furniture and fittings 42,500 Inventory 22,500 Land and buildings 75,000 Bank loan payable 43,750 Equipment...

The following is a list of the accounts and balances taken from the adjusted trial balance...

The following is a list of the accounts and balances taken from the adjusted trial balance at December 31, 2021 for, Meilleur Merchants. The list of accounts is in alphabetical order. All accounts have normal balances. Meilleur uses a periodic inventory system and the earnings approach to recognize revenue. Account Balance Dec. 31 1 Accounts payable $15,000 2 Accounts receivable 30,000 3 Accumulated depreciation—building 15,500 4 Accumulated depreciation—equipment 10,000 5 Advertising expense 4,500 6 Building 84,600 7 S. Meilleur, capital...

Willies Traders had the following balances (amongst others) in their books on 1 May 20.7: Vehicles...

Willies Traders had the following balances (amongst others) in their books on 1 May 20.7: Vehicles R820 000 Accumulated depreciation: vehicles R130 000 During the year ended 30 April 20.8, the following transactions took place pertaining to vehicles: On 30 Oct 20.7, a new vehicle was bought for R242 000 cash. On 1 Jan 20.8, an old vehicle, which had been bought on 1 Oct 20.5 for R245 000, was sold on credit for R138 000. Willies Traders depreciates all...

The following balances were taken from the books of Sheffield Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Sheffield Corp. on December 31, 2017. Interest revenue $87,000 Accumulated depreciation—equipment $41,000 Cash 52,000 Accumulated depreciation—buildings 29,000 Sales revenue 1,381,000 Notes receivable 156,000 Accounts receivable 151,000 Selling expenses 195,000 Prepaid insurance 21,000 Accounts payable 171,000 Sales returns and allowances 151,000 Bonds payable 101,000 Allowance for doubtful accounts 8,000 Administrative and general expenses 98,000 Sales discounts 46,000 Accrued liabilities 33,000 Land 101,000 Interest expense 61,000 Equipment 201,000 Notes payable 101,000 Buildings 141,000...

The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest...

The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest revenue $87,950 Accumulated depreciation—equipment $41,950 Cash 52,950 Accumulated depreciation—buildings 29,950 Sales revenue 1,381,950 Notes receivable 156,950 Accounts receivable 151,950 Selling expenses 195,950 Prepaid insurance 21,950 Accounts payable 171,950 Sales returns and allowances 151,950 Bonds payable 101,950 Allowance for doubtful accounts 8,950 Administrative and general expenses 98,950 Sales discounts 46,950 Accrued liabilities 33,950 Land 101,950 Interest expense 61,950 Equipment 201,950 Notes payable 101,950 Buildings 141,950...

The following balances were taken from the books of Shamrock Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Shamrock Corp. on December 31, 2017. Interest revenue $87,050 Accumulated depreciation—equipment $41,050 Cash 52,050 Accumulated depreciation—buildings 29,050 Sales revenue 1,381,050 Notes receivable 156,050 Accounts receivable 151,050 Selling expenses 195,050 Prepaid insurance 21,050 Accounts payable 171,050 Sales returns and allowances 151,050 Bonds payable 101,050 Allowance for doubtful accounts 8,050 Administrative and general expenses 98,050 Sales discounts 46,050 Accrued liabilities 33,050 Land 101,050 Interest expense 61,050 Equipment 201,050 Notes payable 101,050 Buildings 141,050...

The following balances were taken from the books of Alonzo Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Alonzo Corp. on December 31, 2017. Interest revenue $86,000 Accumulated depreciation—equipment $40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable 155,000 Accounts receivable 150,000 Selling expenses 194,000 Prepaid insurance 20,000 Accounts payable 170,000 Sales returns and allowances 150,000 Bonds payable 100,000 Allowance for doubtful accounts 7,000 Administrative and general expenses 97,000 Sales discounts 45,000 Accrued liabilities 32,000 Land 100,000 Interest expense 60,000 Equipment 200,000 Notes payable 100,000 Buildings 140,000...