80.2K

Verified Solution

Link Copied!

Addit 1 Question 5.5. . A b REQUIRED Prepare only the following notes to the financial statements of Sunshine Traders for the year ended 30 June 20.5: k. Property, plant and equipment 1. Inventories m. Other current assets Trade and other payables INFORMATION The bookkeeper of Sunshine Manufacturers and Traders suddenly resigned. You were asked to complete the financial statements for the year ended 30 June 20.5. The following balances and totals appeared in the trial balance as at 30 June 20.5: n. 5. 6. Sunshine Manufacturers and Traders Trial balance as at 30 June 20.5 Debit R Credit R 550 000 1. 5210 80 000 120 000 90 000 8 27 000 15 200 7 500 230 8 100 472 680 19 700 202 700 107 500 Capital Drawings Loan: Burn Bank Vehicles (at cost) Equipment (at cost) Accumulated depreciation on vehicles (1/7/20.4) Accumulated depreciation on equipment (1/7/20.4) Debtors control Allowance for expected credit losses Creditors control Bank Inventory (1/7/20.4) Sales Purchases Purchases returns Carriage on purchases Telephone Rent income Credit losses Advertisements Water and electricity Stationery Salaries and wages Insurance Interest expense 2 150 3 400 9600 26 450 1 900 15 300 14 400 2 560 28 000 7 480 6 600 911 830 911 830 . . . Additional information A physical stocktaking on 30 June 20.5 revealed the following on hand: 1. Inventory of R31 200 Raw materials of R50 500 Work-in-progress of R40 800 Finished goods of R80 750 A debtor, Rayz, purchased goods to the value of R500 (cost R250) on credit from Sunshine Traders. However, the 2. bookkeeper recorded this as a R500 purchase of goods on credit. On 1 April 20.5, new equipment was purchased for R12 000 and the installation was made at a cost of R2 000. 3. After the installation was completed on 1 April 20.5, the equipment was available for use. The purchase and the installation transactions were not recorded. 4. On 1 January 20.5, Ray, one of the owner's sons, was involved in a car accident with a vehicle belonging to the business. The vehicle was written off. It was originally purchased on 1 July 20.3 for R50 000 and was immediately available for use. No entry has been made concerning the accident. 5. The policy of the entity relating to depreciation is as follows: On equipment at 20% per annum on the straight-line method; and On vehicles at 10% per annum on the diminishing balance method. 6. The allowance for expected credit losses must be adjusted to R320. 7. The loan at Burn Bank was obtained on 1 October 20.3. The loan is secured by a first mortgage on the land and buildings of Sunny, the owner. The carrying amount of the owner's land and buildings was R250 000 on 30 June 20.5. Interest at 12% is payable half yearly in arrears on 1 April and 1 October. The interest rate is market related. The first annual payment of R20 000 on the loan was already paid and recorded on 30 September 20.4. The rent income for June 20.5 was still outstanding at year-end. The rent was increased with 10% on 1 January 20.5. . 8. 0 10 00

Answer & Explanation Solved by verified expert

See Answer