S Man runs a small business, MANDLAS, from home. S Man does not keep proper accounting records. He needs to calculate the entity’s profit/loss and requests your assistance. You established the following: BALANCES AS AT 30 APRIL 2013 2012 R R Furniture at carrying value 22 950 25 500 Tools and equipment at carrying value 46 350 51 500 Inventory: Trading 10 500 15 200 Investment in shares - Solution Pty (Ltd) 25 000 - Bank (favourable) - 12 480 Bank (overdraft) 8 500 - Long-term loan 15 500 19 000 Creditors 9 520 9 520 Credit card 5 380 - 32 Days Notice Deposit 21 000 - Prepaid expenses 1 850 - Accrued income 2 430 - Income received in advance 3 800 5 000 Accrued expenses 1 600 - 1300 Additional information a) S Man withdrew R20 000 during the 2013 year for own use. b) During the 2013 financial year S Man deposited R30 000 from his personal bank account into the business bank account. c) The interest on the long-term loan for the 2013 financial year must still be provided for. Interest is charged at 11% per annum on the outstanding balance on 30 April. REQUIRED: 3.1 Prepare the statement of financial position of MANDLAS as at 30 April 2013. (16) All the necessary calculations must be shown. 3.2 Prepare the statement of assets and liabilities as at 30 April 2012 and calculate the equity balance as at 30 April 2012. (6) 3.3 Calculate the estimated profit or loss for the year ended 30 April 2013.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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S Man runs a small business, MANDLAS, from home. S Man does not keep proper accounting records. He needs to calculate the entity’s profit/loss and requests your assistance. You established the following: BALANCES AS AT 30 APRIL 2013 2012 R R Furniture at carrying value 22 950 25 500 Tools and equipment at carrying value 46 350 51 500 Inventory: Trading 10 500 15 200 Investment in shares - Solution Pty (Ltd) 25 000 - Bank (favourable) - 12 480 Bank (overdraft) 8 500 - Long-term loan 15 500 19 000 Creditors 9 520 9 520 Credit card 5 380 - 32 Days Notice Deposit 21 000 - Prepaid expenses 1 850 - Accrued income 2 430 - Income received in advance 3 800 5 000 Accrued expenses 1 600 - 1300 Additional information a) S Man withdrew R20 000 during the 2013 year for own use. b) During the 2013 financial year S Man deposited R30 000 from his personal bank account into the business bank account. c) The interest on the long-term loan for the 2013 financial year must still be provided for. Interest is charged at 11% per annum on the outstanding balance on 30 April. REQUIRED: 3.1 Prepare the statement of financial position of MANDLAS as at 30 April 2013. (16) All the necessary calculations must be shown. 3.2 Prepare the statement of assets and liabilities as at 30 April 2012 and calculate the equity balance as at 30 April 2012. (6) 3.3 Calculate the estimated profit or loss for the year ended 30 April 2013.

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