Young Traders is owned by Yvonne Young. Young Traders is not a VAT vendor and uses the perpetual inventory system. Goods are sold at a mark‐up of 50% on cost price. The following pre‐adjustment trial balance appeared in the books of Young Traders at the end of their current financial year, 30 April 2020: (SEE attatched 7.JPG) Additional information and adjustments at year‐end: According to a physical stock taking, stationery on hand amounted to R4 500 and trading inventory on hand amounted to R147 000. An amount of R2 500 was prepaid on carriage on sales on goods that will be delivered in May 2020. A debtor, Joe Jones, is insolvent and his debt of R3 500 must be written off as irrecoverable. The allowance for credit losses must be adjusted to R2 000. Provide depreciation on vehicles of R55 000 for the current financial year. The owner withdrew R215 000 cash over the year for his personal use. This entry still needs to be recorded. An amount of R1 000 for Telephone was incorrectly debited to the Salaries and Wages account during April 2020. Correct the error. Young Traders invested the fixed deposit with ABBA Bank on 1 May 2019. The fixed deposit will mature on 30 April 2021. Interest for the current year must still be provided. Prepare the statement for changes in equity for the year ended 30 April 2020

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

Young Traders is owned by Yvonne Young. Young Traders is not a VAT vendor and uses the perpetual inventory system. Goods are sold at a mark‐up of 50% on cost price. The following pre‐adjustment trial balance appeared in the books of Young Traders at the end of their current financial year, 30 April 2020:

(SEE attatched 7.JPG)

Additional information and adjustments at year‐end:

  1. According to a physical stock taking, stationery on hand amounted to R4 500 and trading inventory on hand amounted to R147 000.
  2. An amount of R2 500 was prepaid on carriage on sales on goods that will be delivered in May 2020.
  3. A debtor, Joe Jones, is insolvent and his debt of R3 500 must be written off as irrecoverable.
  4. The allowance for credit losses must be adjusted to R2 000.
  5. Provide depreciation on vehicles of R55 000 for the current financial year.
  6. The owner withdrew R215 000 cash over the year for his personal use. This entry still needs to be recorded.
  7. An amount of R1 000 for Telephone was incorrectly debited to the Salaries and Wages account during April 2020. Correct the error.
  8. Young Traders invested the fixed deposit with ABBA Bank on 1 May 2019. The fixed deposit will mature on 30 April 2021. Interest for the current year must still be provided.

    Prepare the statement for changes in equity for the year ended 30 April 2020.

    (SEE attatched 14.JPG for correct answer format)

 

Young Traders
Statement of changes in equity for the year ended 30 April 2020
R
Balance as at 1 May 2020
Sales
Transcribed Image Text:Young Traders Statement of changes in equity for the year ended 30 April 2020 R Balance as at 1 May 2020 Sales
Pre-adjustment Trial Balance of Young Traders as at 30 April 2020
Debit (R)
Credit (R)
Capital (1 May 2019)
1 200 000
Vehicles
550 000
Accumulated Depreciation on Vehicles (1 May 2019)
205 000
Fixed deposit (ABBA Bank) (12% p.a.)
75 000
Inventory
149 000
Debtors Control
123 500
Allowance for Credit Losses (1 May 2019)
2 500
Creditors Control
50 100
Bank
199 400
Sales
1 467 500
Cost of Sales
914 000
Sales Returns
70 000
Salaries and Wages
640 000
Stationery
84 500
Carriage on Sales
23 700
Credit Losses
13 500
Telephone
82 500
R2 925 100
R2 925 100
Transcribed Image Text:Pre-adjustment Trial Balance of Young Traders as at 30 April 2020 Debit (R) Credit (R) Capital (1 May 2019) 1 200 000 Vehicles 550 000 Accumulated Depreciation on Vehicles (1 May 2019) 205 000 Fixed deposit (ABBA Bank) (12% p.a.) 75 000 Inventory 149 000 Debtors Control 123 500 Allowance for Credit Losses (1 May 2019) 2 500 Creditors Control 50 100 Bank 199 400 Sales 1 467 500 Cost of Sales 914 000 Sales Returns 70 000 Salaries and Wages 640 000 Stationery 84 500 Carriage on Sales 23 700 Credit Losses 13 500 Telephone 82 500 R2 925 100 R2 925 100
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Merchandise Inventory
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education