Question 1 The following adjusting transactions appeared in the accounting records of ROPS Properties (Pty) Ltd: 1. 2. 3. 4. 5. The interest on the bond of R900 000 at 12.5% has not yet been accounted for at year-end. The bond was originally obtained on 1 March 2023 through Bruma Bank. Included in the rental income account was an amount of R90 000, which related to income for November and December 2023. Management decided to write off 25% of the debtors whose accounts were over 90 days. At year-end, the total debtors balance for accounts over 90 days is R175 000. On 31 October, the company received R28 000 from a debtor whose account was written off in the previous year. Depreciation on office equipment should be provided for. Equipment was bought at a cost price of R240 000. On 1 November 2022, the accumulated depreciation for office equipment was R15 800. The company uses the diminishing balance method to calculate the depreciation for office equipment at a rate of 25% per annum. The company's year-end is 31 October 2023: Required: Using the table below, indicate the effects of the above transactions on the accounting equation of ROPS Properties (Pty) Ltd for the year ended 31 October 2023.
Question 1 The following adjusting transactions appeared in the accounting records of ROPS Properties (Pty) Ltd: 1. 2. 3. 4. 5. The interest on the bond of R900 000 at 12.5% has not yet been accounted for at year-end. The bond was originally obtained on 1 March 2023 through Bruma Bank. Included in the rental income account was an amount of R90 000, which related to income for November and December 2023. Management decided to write off 25% of the debtors whose accounts were over 90 days. At year-end, the total debtors balance for accounts over 90 days is R175 000. On 31 October, the company received R28 000 from a debtor whose account was written off in the previous year. Depreciation on office equipment should be provided for. Equipment was bought at a cost price of R240 000. On 1 November 2022, the accumulated depreciation for office equipment was R15 800. The company uses the diminishing balance method to calculate the depreciation for office equipment at a rate of 25% per annum. The company's year-end is 31 October 2023: Required: Using the table below, indicate the effects of the above transactions on the accounting equation of ROPS Properties (Pty) Ltd for the year ended 31 October 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 1
The following adjusting transactions appeared in the accounting records of ROPS
Properties (Pty) Ltd:
1.
2.
3.
4.
5.
The interest on the bond of R900 000 at 12.5% has not yet been
accounted for at year-end. The bond was originally obtained on 1 March
2023 through Bruma Bank.
Included in the rental income account was an amount of R90 000, which
related to income for November and December 2023.
Management decided to write off 25% of the debtors whose accounts
were over 90 days. At year-end, the total debtors balance for accounts
over 90 days is R175 000.
On 31 October, the company received R28 000 from a debtor whose
account was written off in the previous year.
Depreciation on office equipment should be provided for. Equipment was
bought at a cost price of R240 000. On 1 November 2022, the
accumulated depreciation for office equipment was R15 800. The
company uses the diminishing balance method to calculate the
depreciation for office equipment at a rate of 25% per annum.
The company's year-end is 31 October 2023:
Required:
Using the table below, indicate the effects of the above transactions on the
accounting equation of ROPS Properties (Pty) Ltd for the year ended 31 October
2023.
Example: The business rented out property worth R25 000 on credit.
Account to
be debited
Account to
be
credited
No.
Example
Debtor's
control
Sales
Assets
+
25 000
Owner's Liabilities
equity
+
25 000
+
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