8. Joe Slow, a debtor previously written off as a bad debt, paid R500 to honour his debt. Required: Q.4.1 Prepare the Statement of profit or loss and other comprehensive income of Glassware Traders for the year ended 31 July 2019.
8. Joe Slow, a debtor previously written off as a bad debt, paid R500 to honour his debt. Required: Q.4.1 Prepare the Statement of profit or loss and other comprehensive income of Glassware Traders for the year ended 31 July 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
IT IS NOT INCOMPLETE, look at pages numbers please. This is the full question.
Please do 4.1.
Transcribed Image Text:Question 4
The following information was taken from the books of Glassware Traders, a sole trader owned
and run by Light Dlamini, at the end of the financial year:
Pre-adjustment trial balance of Glassware Traders as at 31 July 2019
Statement of financial position section
Capital
300 000
Drawings
105 000
Debtors Control
62 000
Creditors Control
93 000
Inventory
160 000
Land and Buildings
400 000
Loan: ABBA Bank
200 000
Bank
45 000
Nominal accounts section
Sales
1 340 000
Cost of Sales
640 000
Salaries and Wages
360 000
Telephone
140 000
Advertising
65 000
Stationery
25 000
Insurance
45 000
Rent Income
26 000
Credit Losses
2 000
2 004 000
2 004 000
Ignore VAT.
Additional information:
1.
Debtors owing R2 500 must be written off as irrecoverable.
2.
An allowance for credit losses must be created, R3 100.
O The Independent Institute of Education (Pty) Ltd 2019
Page 9 of 13
Transcribed Image Text:nformation:
2 of 2
--ors owing R2 500 must be written off as irrecoverable.
2.
An allowance for credit losses must be created, R3 100.
O The Independent Institute of Education (Pty) Ltd 2019
Page 9 of 13
19
2019
3.
An amount of R4 500 for an insurance premium has already been paid for August 2019.
4.
Glassware Traders has rented out a storeroom since 1 August 2018 and receives a rental of
R2 000 per month.
5.
Interest on Loan is calculated at 12% per annum. The loan was negotiated and received on
30 September 2018. No capital and interest payments have been made to date. A capital
repayment of R50 000 is due to be paid on 1 October 2019.
6.
According to a physical stock-take, the following was on hand on 31 July 2019:
Trading Inventory R156 000;
Stationary R14 500.
7.
An amount of R5 000 for an advertisement that was published on 25 July 2019 has not yet
been paid.
8.
Joe Slow, a debtor previously written off as a bad debt, paid R500 to honour his debt.
Required:
Q.4.1
Prepare the Statement of profit or loss and other comprehensive income of
Glassware Traders for the year ended 31 July 2019.
Q.4.2
Prepare the following notes to the financial statements for the year ended 31 July
2019:
Q.4.2.1
Inventories
Q.4.2.2
Trade and other Receivables
Q.4.2.3
Trade and other Payables
Expert Solution
Step 1
An income statement is a financial report that indicates the revenue and expenses of a business. It also indicates when a business is profitable or losing money for a given time span. The income statement, including the balance sheet and cash flow statement, aids in the understanding of the company's financial performance.
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