Mortgage loan: Leo Bank (18% p.a.) 160 000 Nominal accounts section Sales 1 000 000 Cost of sales 480 000 Sales returns 8 000 Salaries and wages 178 000 Bad debts 2 000 Stationery 4 000 Rent expense 42 880 Motor expenses 34 000 Bad debts recovered 2 000 Telephone 14 000 Electricity and water 24 000

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
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 8E: Cost of Goods Sold, Income Statement. and Statement of Comprehensive Income Gaskin Company derives...
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Please assist to prepare statement of comprehensive income Adjustments and additional information 1. According to the physical stocktaking completed on 28 February 2021, the following inventories were on hand: 1.1 Trading inventory, R136 000 1.2 Stationery, R600. 2. An account received from Airtel Fitters on 28 February 2021 for the installation of an air conditioning unit in one of the vehicles was debited to the motor expenses account in error, R6 000. 3. No entry has been made for interest at 12% p.a. that was charged for two months on the overdue account of a debtor who owed R6 000. 4. An electronic funds transfer for R1 330 was made to Royal Traders on 28 February 2021 from a debtor, after a settlement discount of 5% was deducted. No entries have been made for this transaction. 5. The provision for bad debts must be decreased to R3 000. 6. The telephone account for February 2021 was due to be paid on 02 March 2021, R1 400. 7. Rent expense has been paid up to 31 March 2021. Note: The rental was increased by 10% with effect from 01 December 2020. Make the necessary adjustment. 8. Interest on loan for February 2021 has not been paid, 9. The insurance total includes an annual premium of R4 800 that was paid for the period 01 June 2020 to 31 May 2021. 10. Cash deposit fees of R600 that appeared in the February 2021 bank statement were left out in error when the cash journals for February 2021 were prepared and posted. 11. Provide for depreciation as follows: 11.1 On equipment at 10% per annum on cost. Note: Equipment that cost R20 000 was purchased on 01 September 2020. The purchase has been recorded. 11.2 On vehicles at 20% per annum on the diminishing balance.
Creditors control
82 800
Mortgage loan: Leo Bank (18% p.a.)
160 000
Nominal accounts section
Sales
1 000 000
Cost of sales
480 000
Sales returns
8 000
Salaries and wages
178 000
Bad debts
2 000
Stationery
4 000
Rent expense
42 880
Motor expenses
34 000
Bad debts recovered
2 000
Telephone
14 000
Electricity and water
24 000
Bank charges
6 000
Insurance
12 000
Interest on mortgage loan
26 400
Commission income
10 000
1811 800
1811 800
Transcribed Image Text:Creditors control 82 800 Mortgage loan: Leo Bank (18% p.a.) 160 000 Nominal accounts section Sales 1 000 000 Cost of sales 480 000 Sales returns 8 000 Salaries and wages 178 000 Bad debts 2 000 Stationery 4 000 Rent expense 42 880 Motor expenses 34 000 Bad debts recovered 2 000 Telephone 14 000 Electricity and water 24 000 Bank charges 6 000 Insurance 12 000 Interest on mortgage loan 26 400 Commission income 10 000 1811 800 1811 800
QUESTION 1 Prepare the Statement of Comprehensive Income of Royal Traders for the year ended 28
February 2021.
INFORMATION
The trial balance, adjustments and additional information given below were extracted from the accounting records of
Royal Traders on 28 February 2021, the end of the financial year.
ROYAL TRADERS
PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2021
Debit (R)
Credit (R)
Balance sheet accounts section
Capital
301 000
Drawings
134 720
Vehicles at cost
360 000
Equipment at cost
240 000
Accumulated depreciation on vehicles
186 000
Accumulated depreciation on equipment
62 000
Trading inventory
140 000
Debtors control
62 000
Provision for bad debts
8 000
Bank
42 800
Cash float
1 000
Transcribed Image Text:QUESTION 1 Prepare the Statement of Comprehensive Income of Royal Traders for the year ended 28 February 2021. INFORMATION The trial balance, adjustments and additional information given below were extracted from the accounting records of Royal Traders on 28 February 2021, the end of the financial year. ROYAL TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2021 Debit (R) Credit (R) Balance sheet accounts section Capital 301 000 Drawings 134 720 Vehicles at cost 360 000 Equipment at cost 240 000 Accumulated depreciation on vehicles 186 000 Accumulated depreciation on equipment 62 000 Trading inventory 140 000 Debtors control 62 000 Provision for bad debts 8 000 Bank 42 800 Cash float 1 000
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