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. Balance sheet account section: Capital CR 3530000 Drawings DR 362000 Land and building at cost DR 2340000 Equipment at cost DR 1600000 Vehicles at cost DR 1000000 Accumulated depreciation on equipment CR 504000 Accumulated depreciation on vehicles CR 252000 Fixed depoist Zap bank (9% p.a) DR 100000 Training inventory DR 244000 Debtors control DR 302000 Bank CR 98000 Cash float DR 2000 Creditors control CR 376000 Loan Zap bank (18% p.a) CR 184000 NOMINAL ACCOUNT SECTION Sales DR 4086000 Cost of sales DR 2340000 Sales returns DR 70000 Advertising DR 50000 Stationery DR 8000 Bad debts DR 12000 Discount allowed DR 20000 Discount received CR 14000 Electricity and water DR 152000 Interest on fixed deposit CR 4000 Interest on ocerdraft DR 2000 Insurance DR 30000 Salaries DR 450000 Bank charges DR 16000 Rent income CR 130000 Municipal rates DR 78000 TOTAL DR / CR 9178000 Please consider 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 inventory count revealed the following inventories: 2.1 Trading inventory R240 000 2.2 Stationery R1 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.

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. Balance sheet account section: Capital CR 3530000 Drawings DR 362000 Land and building at cost DR 2340000 Equipment at cost DR 1600000 Vehicles at cost DR 1000000 Accumulated depreciation on equipment CR 504000 Accumulated depreciation on vehicles CR 252000 Fixed depoist Zap bank (9% p.a) DR 100000 Training inventory DR 244000 Debtors control DR 302000 Bank CR 98000 Cash float DR 2000 Creditors control CR 376000 Loan Zap bank (18% p.a) CR 184000 NOMINAL ACCOUNT SECTION Sales DR 4086000 Cost of sales DR 2340000 Sales returns DR 70000 Advertising DR 50000 Stationery DR 8000 Bad debts DR 12000 Discount allowed DR 20000 Discount received CR 14000 Electricity and water DR 152000 Interest on fixed deposit CR 4000 Interest on ocerdraft DR 2000 Insurance DR 30000 Salaries DR 450000 Bank charges DR 16000 Rent income CR 130000 Municipal rates DR 78000 TOTAL DR / CR 9178000 Please consider 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 inventory count revealed the following inventories: 2.1 Trading inventory R240 000 2.2 Stationery R1 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.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 4MCQ

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