REQUIRED Use the information provided below to prepare the Statement of Comprehensive Income for the year ended 28 February 2022. INFORMATION The trial balance, adjustments and additional information given below were extracted from the accounting records of Whetstone Stores on 28 February 2022, the end of the financial year. WHETSTONE STORES PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022 Balance sheet accounts section Capital Drawings Land and buildings Vehicles at cost Equipment at cost Accumulated depreciation on vehicles Accumulated depreciation on equipment Investment: Med Bank (8 % p.a.) Debtors control Provision for bad debts Bank Creditors control Loan: Med Bank (18% p.a.) Nominal accounts section Sales Opening stock Purchases Purchases returns Sales returns Salaries and wages Bad debts Stationery Rates and taxes Motor expenses Repairs and maintenance Telephone Electricity and water Bank charges Advertising Interest on mortgage loan Interest on investment Rent income 1. 1.1 1.2 2. 3. 4. Debit (R) 5. 310 000 2 840 000 2 100 000 1 500 000 450 000 444 000 602 700 200 000 2 150 000 60 000 1 234 000 42 000 68 000 178 000 300 000 52 000 100 000 150 000 18 000 194 000 130 000 13 122 700 Credit (R) 3 759 100 1 200 000 840 000 22 000 418 000 750 000 Adjustments and additional information According to stocktaking done on 28 February 2022, the following were on hand: Trading inventory R240 000 Stationery R6 000. A debtor who was declared insolvent paid R4 200, which represented 60% of the amount owed, to Whetstone Stores. The amount that was received has been recorded but the rest of his account must now be written off. The provision for bad debts must be adjusted to R20 000. Interest is outstanding on the investment, which was made on 01 February 2021. The maturity date is 31 July 2022. The long-term loan from Med Bank was obtained on 01 March 2021. A repayment of R100 000 was made and recorded on 31 August 2021. Provide for the outstanding interest. Interest is not capitalised. 5 600 000 118 000 32 000 383 600 13 122 700
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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