Bad debts Discount allowed 12 000 20 000 Discount received 14 000 Electricity and water 152 000 Interest on fixed deposit 4 000 Interest on overdraft 2000 Insurance 30 000 Salaries 450 000 Bank charges 16 000 Rent income 130 000 Municipal rates 78 000 9 178 000 9 178 000 Additional information and adjustments 1. The bookkeeper did not record the following debit entries that appeared on the February 2024 bank statement: 1.1 Bank charges R1 400 1.2 Interest on overdraft R200 2. The financial year-end 2.1 Trading inventory 2.2 Stationery R1000 inventory count revealed the following inventories: R240 000 3. Vehicles are to be depreciated at R150 000 per year. 4. Depreciation on equipment amounted to R219 200. 5. Provide for R5 000 outstanding interest on the fixed deposit. Interest is not capitalised. The investment in fixed deposit was made on 01 March 2023 and it matures on 28 February 2026. 6. The loan was obtained from Zap Bank on 01 February 2024. Provide for the outstanding interest for February 2024, R2 760. Interest is not capitalised. Repayments (excluding interest) totalling R24 000 are expected to be made during the financial year ended 28 February 2025. 7. The tenant has already paid the rent of R10 000 for the first month of the next financial year. 8. The municipal rates statement for the year ended 29 February 2024 reflected that R6 000 was paid in advance for the next financial year. 9. A debtor who owed R2 000 was declared insolvent. Her account must now be written off. 10. A provision for bad debts of R15 000 must be created. 11. The net profit for the year ended 29 February 2024, after taking the above into account, amounted to R613 440. 3/1 Answer ALL the questions. QUESTION 1 (100 MARKS) (20 Marks) REQUIRED Prepare the Statement of Financial Position as at 29 February 2024. INFORMATION The trial balance, additional information and adjustments given below were obtained from the records of Torga Traders on 29 February 2024, the end of the financial year. TORGA TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2024 Debit (R) Credit (R) Balance sheet accounts section Capital Drawings Land and buildings at cost 3 530 000 362 000 2 340 000 Equipment at cost 1 600 000 Vehicles at cost 1 000 000 Accumulated depreciation on equipment 504 000 Accumulated depreciation on vehicles 252 000 Fixed deposit: Zap Bank (9% p.a.) 100 000 Trading inventory 244 000 Debtors control 302 000 Bank Cash float 98 000 2000 Creditors control Loan: Zap Bank (18% p.a.) 376 000 184 000 Nominal accounts section Sales Cost of sales Sales returns Advertising Stationery 4 086 000 2 340 000 70 000 50 000 8 000

Bad debts Discount allowed 12 000 20 000 Discount received 14 000 Electricity and water 152 000 Interest on fixed deposit 4 000 Interest on overdraft 2000 Insurance 30 000 Salaries 450 000 Bank charges 16 000 Rent income 130 000 Municipal rates 78 000 9 178 000 9 178 000 Additional information and adjustments 1. The bookkeeper did not record the following debit entries that appeared on the February 2024 bank statement: 1.1 Bank charges R1 400 1.2 Interest on overdraft R200 2. The financial year-end 2.1 Trading inventory 2.2 Stationery R1000 inventory count revealed the following inventories: R240 000 3. Vehicles are to be depreciated at R150 000 per year. 4. Depreciation on equipment amounted to R219 200. 5. Provide for R5 000 outstanding interest on the fixed deposit. Interest is not capitalised. The investment in fixed deposit was made on 01 March 2023 and it matures on 28 February 2026. 6. The loan was obtained from Zap Bank on 01 February 2024. Provide for the outstanding interest for February 2024, R2 760. Interest is not capitalised. Repayments (excluding interest) totalling R24 000 are expected to be made during the financial year ended 28 February 2025. 7. The tenant has already paid the rent of R10 000 for the first month of the next financial year. 8. The municipal rates statement for the year ended 29 February 2024 reflected that R6 000 was paid in advance for the next financial year. 9. A debtor who owed R2 000 was declared insolvent. Her account must now be written off. 10. A provision for bad debts of R15 000 must be created. 11. The net profit for the year ended 29 February 2024, after taking the above into account, amounted to R613 440. 3/1 Answer ALL the questions. QUESTION 1 (100 MARKS) (20 Marks) REQUIRED Prepare the Statement of Financial Position as at 29 February 2024. INFORMATION The trial balance, additional information and adjustments given below were obtained from the records of Torga Traders on 29 February 2024, the end of the financial year. TORGA TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2024 Debit (R) Credit (R) Balance sheet accounts section Capital Drawings Land and buildings at cost 3 530 000 362 000 2 340 000 Equipment at cost 1 600 000 Vehicles at cost 1 000 000 Accumulated depreciation on equipment 504 000 Accumulated depreciation on vehicles 252 000 Fixed deposit: Zap Bank (9% p.a.) 100 000 Trading inventory 244 000 Debtors control 302 000 Bank Cash float 98 000 2000 Creditors control Loan: Zap Bank (18% p.a.) 376 000 184 000 Nominal accounts section Sales Cost of sales Sales returns Advertising Stationery 4 086 000 2 340 000 70 000 50 000 8 000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 10P: Balance Sheet The following is a list (in random order) of KIP International Products Companys...

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