Samke Limited sells new equipment and repairs equipment for their regular customers. The following information was extracted from the accounting records for the financial year ended 30 June 2021
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.
![10.2.3 ACCOUNTING 1: ASSIGNMENT 2
QUESTION ONE
Samke Limited sells new equipment and repairs equipment for their regular customers.
The following information was extracted from the accounting records for the financial
year ended 30 June 2021
1. Extracted from the Pre-Adjustment Trial Balance at 30 June 2021:
R
Fixed deposit
Inventory: Trade goods
Debtors control
Machinery
Accumulated depreciation: Machinery
Long term borrowing: Finhouse
Sales
Debtors allowances
Cost of sales
Service fee income (in respect of repair services)
Rent income
Interest income
Salaries and wages
Audit fees
Directors fees
Consumable stores
Bank charges
Travel and entertainment - Directors
2.
2.1
2.2
2.4
auditors are owed a further R28 000 in audit fees.
Bank charges of R310 reflected on the June 2021 bank statement have not
yet been entered in the books.
2.3 The stock count on 30 June 2021 revealed the following on hand:
• Inventory: Trade goods; R202 000
• Consumable stores; R900
2.5
Adjustments and additional information:
The internal auditors have identified the following errors or omissions:
160 000
219 800
39 090
224 000
130 000
The tenant paid the July and August rent in June 2021. The rent was
increased by R700 per month on 1 January 2021.
Provide for depreciation on machinery at 10% p.a. on the diminishing-balance
method. Note that new machinery costing R30 000 was purchased on 31
December 2020, (this was recorded correctly).
2.6 Interest on the loan was capitalised. The loan statement from Finhouse on
30 June 2021 reflects the following:
281 200
1 680 000
17 000
1 050 000
297 140
105 000
11 200
294 640
30 000
230 000
51 100
5 240
15 910
FINHOUSE
Loan statement at 30 June 2021
Balance on 1 July 2020
Interest charged
Monthly instalments of R4 300 x 12 paid
Balance on 30 June 2021
[100]
[20]
R332 800
?
R 51 600
R326 000
The interest expense for the year has not yet been entered in the books.
2.7 A credit note issued to a debtor, S Moon, dated 28 June 2021 was not recorded
in the books. The credit note was for price reduction on unsatisfactory repair of a
piece of equipment, R540.
Required:
Prepare a Statement of profit or loss and other comprehensive income for the year
ended 30 June 2021 in compliance with International Financial Reporting Standards
appropriate to Samke Ltd's business activities.
(20)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51274a08-ce26-47fb-8b1d-9af822806607%2Fe10a991b-504f-4df7-bcb3-634314fa950f%2Fcxbx3jc_processed.jpeg&w=3840&q=75)
Step by step
Solved in 2 steps with 1 images
