Question

QUESTION 5 FINANCIAL STATEMENTS (20) The trial balance, adjustments and additional information given below were extracted from the accounting records of Concha Traders on 28 February 2017, the end of the financial year. REQUIRED Prepare the Statement of Financial Position of Concha Traders as at 28 February 2017. Please use an example of THE STATEMENT OF FINANCIAL POSITION FROM THE SOUTH AFRICAN ACCOUNTING SYSTEM. The notes to the financial statements are not required. Where applicable, show calculations in brackets. INFORMATION CONCHA TRADERS PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017 Debit (R) Credit (R) Balance sheet accounts section Capital 162 000 Drawings 70 000 Vehicles at cost 180 000 Equipment at cost 120 000 Accumulated depreciation on vehicles 90 000 Accumulated depreciation on equipment 38 000 Trading inventory 70 000 Debtors control 32 000 Provision for bad debts 4 000 Bank 22 000 Cash float 2 000 Creditors control 40 000 Mortgage loan: Aries Bank (16% p.a.) 80 000 Nominal accounts section Sales 485 000 Cost of sales 240 000 Sales returns 5 000 Salaries and wages 84 000 Bad debts 5 000 Consumable stores 2 000 Rent expense 28 000 Motor expenses 15 000 Bad debts recovered 2 000 Telephone 7 000 Electricity and water 11 000 Bank charges 3 000 Insurance 4 000 Interest on mortgage loan 6 000 Commission income 5 000 906 000 906 000 MANCOSA: BBA YEAR 1 PROGRAMME HANDBOOK: JANUARY 2018 INTAKE 72 72 Adjustments and additional information The net profit according to the Statement of Comprehensive Income, after taking the following into account, was R38 970: 1. According to physical stocktaking done on 28 February 2017, trading inventory on hand amounted to R68 000. 2. Consumable stores used during the financial year amounted to R1 800, according to a physical count. 3. No entry has been made for a commission of 10% earned but not received on 500 items that were sold for R60 each. 4. No entry has been made for a cheque for R600 that was received from an insolvent debtor, J. Marsh, who was only able to pay 30% of her debt. The balance of her account must now be written off as well. 5. The provision for bad debts must be decreased to R1 500. 6. The telephone account for February 2017 has not yet been paid, R700. 7. The rental agreements signed with the lessor (landlord) are as follows: R30 000 for the period 01 January 2016 to 31 December 2016, and R36 000 for the period 01 January 2017 to 31 December 2017. Make the necessary adjustment. 8. The loan from Aries Bank was obtained on 01 September 2016. Provide for the outstanding interest. (Interest is not capitalised.) R20 000 of the amount owing to Aries Bank will be repaid during the next financial year. 9. The insurance total includes an annual premium of R1 800 that was paid for the period 01 June 2016 to 31 May 2017. 10. The bank statement for February 2017 reflected bank charges of R180 that have not yet been recorded. 11. The electricity and water account was debited with an amount of R1 000 for the personal electricity account of the proprietor, that was paid for with a business cheque. 12. Provide for depreciation as follows: 12.1 On equipment at 15% per annum on cost. 12.2 On vehicles at 25% per annum on the diminishing balance. 13. An account received from Heidi Motors to replace two tyres on the delivery vehicle of the business, R2 000, has not been recorded.

Answer 1

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