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Question 1 a) Alex's financial year is 1 January to 31 December. i) and ii) below require you to consider adjustments for the financial year ended 31 December 2022. i) An extract from Alex's trial balance on 31 December 2022 shows the following balances: Fixtures and fittings at cost Fixtures and fittings: accumulated depreciation at 1.1.2022 Dr 62,000 Cr 41,200 During the year ended 31 December 2022, a set of office furniture, included in Fixtures and fittings in the trial balance above, was sold for cash of 6,000. No accounting entries have been made for this transaction. The set of office furniture cost 14,000 in the year ending 31 December 2019. Alex's depreciation policy is to provide depreciation at 10% on a straight-line basis. A full year's depreciation is provided in the year of acquisition while no depreciation is to be provided in the year of disposal. Required: 1. Calculate the gain or loss arising from the disposal of office furniture. (2 marks) 2. Show all the double entry in journal format required to record the disposal and subsequent gain or loss of the office furniture at 31 December 2022. (4 marks) Alex has decided a provision for bad debts is to be set up in the accounting records. The amount of trade receivables at 31 December 2022 is 33,500. The provision is to be 12% of trade receivables. Required: Show the double entry in journal format to record any necessary adjustment at 31 December 2022. Identify the change in the statement of financial position on completion of the double entry journal. (2 marks)

Question 1 a) Alex's financial year is 1 January to 31 December. i) and ii) below require you to consider adjustments for the financial year ended 31 December 2022. i) An extract from Alex's trial balance on 31 December 2022 shows the following balances: During the year ended 31 December 2022, a set of office furniture, included in Fixtures and fittings in the trial balance above, was sold for cash of 6,000. No accounting entries have been made for this transaction. The set of office furniture cost 14,000 in the year ending 31 December 2019. Alex's depreciation policy is to provide depreciation at 10% on a straight-line basis. A full year's depreciation is provided in the year of acquisition while no depreciation is to be provided in the year of disposal. Required: 1. Calculate the gain or loss arising from the disposal of office furniture. (2 marks) 2. Show all the double entry in journal format required to record the disposal and subsequent gain or loss of the office furniture at 31 December 2022. (4 marks) ii) Alex has decided a provision for bad debts is to be set up in the accounting records. The amount of trade receivables at 31 December 2022 is 33,500. The provision is to be 12% of trade receivables. Required: Show the double entry in journal format to record any necessary adjustment at 31 December 2022. Identify the change in the statement of financial position on completion of the double entry journal. ( 2 marks) Question 1 a) Alex's financial year is 1 January to 31 December. i) and ii) below require you to consider adjustments for the financial year ended 31 December 2022. i) An extract from Alex's trial balance on 31 December 2022 shows the following balances: During the year ended 31 December 2022, a set of office furniture, included in Fixtures and fittings in the trial balance above, was sold for cash of 6,000. No accounting entries have been made for this transaction. The set of office furniture cost 14,000 in the year ending 31 December 2019. Alex's depreciation policy is to provide depreciation at 10% on a straight-line basis. A full year's depreciation is provided in the year of acquisition while no depreciation is to be provided in the year of disposal. Required: 1. Calculate the gain or loss arising from the disposal of office furniture. (2 marks) 2. Show all the double entry in journal format required to record the disposal and subsequent gain or loss of the office furniture at 31 December 2022. (4 marks) ii) Alex has decided a provision for bad debts is to be set up in the accounting records. The amount of trade receivables at 31 December 2022 is 33,500. The provision is to be 12% of trade receivables. Required: Show the double entry in journal format to record any necessary adjustment at 31 December 2022. Identify the change in the statement of financial position on completion of the double entry journal. ( 2 marks)

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