The trial balance and additional information given below were extracted from the accounting records of Warrior Traders as at 28 February 2021, the end of the financial year. Warrior Traders Pre-adjusted trial balance on 28 February 2021   Debit (R) Credit (R) Capital   162 000 Drawings 70 000   Vehicles at cost 180 000   Equipment at cost 120 000   Accumulated depreciation on vehicles   90 000 Accumulated depreciation on equipment    38 000 Trading inventory 70 000   Debtors control 32 000   Provision for bad debts   4 000 Bank 22 000   Cash Float 2 000   Creditors control   40 000 Mortgage loan: Aris Bank (16% p.a.)   80 000 Sales   485 000 Cost of Sales 240 000   Sales returns 5 000   Salaries and wages  84 000   Bad Debts 5 000    Consumable stores 2 000    Rent expense 28 000   Motor expenses  15 000   Bad Debts recovered    2 000 Telephone 7 000   Electricity and water 11 000   Bank charges 3 000   Insurance 4 000   Interest on mortgage loan 6 000   Commision income    5 000   906 000 906 000 Adjustments and additional information: 1. According to physical stocktaking done on 28 February 2021, trading inventory on hand amounted to R68 000. 2. Consumable stores used during the financial year amounted to R1 800. 3. No entry has been made for a commission of 10% earned bit not received on 500 items that were sold for R60 each. 4. Received a cheque for R600 from an insolvent debtor, J Marsh, who was only able to pay 30% of her debt. The balance of his account must now be written off. 5. The provision for bad debts must be decreased to R1 500. 6. The telephone account for February 2021 has not yet been paid, R700. 7. The rental agreements signed with the lessor were as follows: • R30 000 for the period 01 January 2020 to 31 December 2020 • R36 000 for the period 01 January 2021 to 31 December 2021 8. The loan from Aries Bank was obtained on 01 September 2020. Provide for the outstanding interest. 9. The insurance total includes an annual premium of R1 800 that was paid for the period 01 June 2020 to 31 May 2021. 10. The bank statement for February 2021 reflected bank charges of R180 that have not yet been recorded. 11. The electricity and water account was debited with an amount of R1 000 for personal electricity account of the proprietor, that was paid with a business cheque 12. Provide for depreciation as follows: • On equipment at 15% per annum on cost • On vehicles at 25% per annum on the diminishing balance method 13. An account received from Heidi Motors to replace two tyres on the delivery vehicle of the business R2 000, has not been recorded. Required: Prepare the statement of profit or loss and other comprehensive income

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The trial balance and additional information given below were extracted from the accounting records of Warrior Traders as at 28 February 2021, the end of the financial year.

Warrior Traders
Pre-adjusted trial balance on 28 February 2021

  Debit (R) Credit (R)
Capital   162 000
Drawings 70 000  
Vehicles at cost 180 000  
Equipment at cost 120 000  
Accumulated depreciation on vehicles   90 000
Accumulated depreciation on equipment    38 000
Trading inventory 70 000  
Debtors control 32 000  
Provision for bad debts   4 000
Bank 22 000  
Cash Float 2 000  
Creditors control   40 000

Mortgage loan: Aris Bank (16% p.a.)

  80 000
Sales   485 000
Cost of Sales 240 000  
Sales returns 5 000  
Salaries and wages  84 000  
Bad Debts 5 000   
Consumable stores 2 000   
Rent expense 28 000  
Motor expenses  15 000  
Bad Debts recovered    2 000
Telephone 7 000  
Electricity and water 11 000  
Bank charges 3 000  
Insurance 4 000  
Interest on mortgage loan 6 000  
Commision income    5 000
  906 000 906 000

Adjustments and additional information:
1. According to physical stocktaking done on 28 February 2021, trading inventory on hand amounted to R68 000.
2. Consumable stores used during the financial year amounted to R1 800.
3. No entry has been made for a commission of 10% earned bit not received on 500 items that were sold for R60 each.
4. Received a cheque for R600 from an insolvent debtor, J Marsh, who was only able to pay 30% of her debt. The balance of his account must now be written off.
5. The provision for bad debts must be decreased to R1 500.
6. The telephone account for February 2021 has not yet been paid, R700.
7. The rental agreements signed with the lessor were as follows:
• R30 000 for the period 01 January 2020 to 31 December 2020
• R36 000 for the period 01 January 2021 to 31 December 2021
8. The loan from Aries Bank was obtained on 01 September 2020. Provide for the outstanding interest.
9. The insurance total includes an annual premium of R1 800 that was paid for the period 01 June 2020 to 31 May 2021.
10. The bank statement for February 2021 reflected bank charges of R180 that have not yet been recorded.
11. The electricity and water account was debited with an amount of R1 000 for personal electricity account of the proprietor, that was paid with a business cheque
12. Provide for depreciation as follows:
• On equipment at 15% per annum on cost
• On vehicles at 25% per annum on the diminishing balance method
13. An account received from Heidi Motors to replace two tyres on the delivery vehicle of the business R2 000, has not been recorded.

Required:

Prepare the statement of profit or loss and other comprehensive income

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