80.2K

Verified Solution

Link Copied!

Use the information given below to complete the following financial statements: $1\mathrm{.}1$ Statement of Comprehensive Income for the year ended $29$ February $2024.(12$ marks$)1\mathrm{.}2$ Statement of Financial Position as at $29$ February $2024.($Show the workings in brackets next to the relevant details.$)(8$ marks$)$ Note: Some of the amounts have already been entered in the answer book. INFORMATION The following trial balance, adjustments and additional information were extracted from the records of Aerostat Traders for the financial year ended $29$ February $2024$: AEROSTAT TRADERS PRE$-$ADJUSTMENT TRIAL BALANCE AS AT $29$ FEBRUARY $2024$ Debit $($R$)$ Credit $($R$)$ Balance sheet accounts section Capital $2449000$ Land and buildings $1064000$ Vehicles at cost $2850000$ Equipment at cost $1650000$ Accumulated depreciation on vehicles $1380000$ Accumulated depreciation on equipment $540000$ Debtors control$/$Accounts receivable $480000$ Provision for bad debts$/$Allowance for credit losses $26000$ Bank $358000$ Creditors control$/$Accounts payable $615000$ Mortgage loan: Med Bank $(16\%$ p$.$a$.)1050000$ Nominal accounts section Sales $7425000$ Sales returns $45000$ Opening stock $750000$ Purchases $3900000$ Salaries and wages $1290000$ Bad debts $15000$ Stationery $23000$ Rent expense $345000$ Motor expenses $267000$ Bad debts recovered $13000$ Telephone $93000$ Electricity and water $186000$ Bank charges $37000$ Insurance $81000$ Interest on mortgage loan $154000$ Commission income $900001358800013588000$ ADDITIONAL INFORMATION AND ADJUSTMENTS $1.$ Stocktaking on $29$ February $2024$ revealed trading inventory of R$1000000$ on hand: $2.$ The rent expense amounted to R$26000$ per month for the period $01$ March $2023$ to $31$ August $2023$ and R$27000$ per month for the period $01$ September $2023$ to $31$ March $2024.$ Make the necessary adjustment. $3.$ A debtor who owed R$20000$ was declared insolvent. His account must now be written off. $4.$ The provision for bad debts must be decreased to R$23000.($Show a separate account for the change in the provision for bad debts in the statement of comprehensive income.$)5.$ Provide for outstanding interest on the loan for the last month of the financial year. Interest is not capitalised. $6.$ The telephone account for February $2024$ was due to be paid on $02$ March $2024,$ R$8000.7.$ According to the bank statement, bank charges of R$2000$ were levied by the bank. This has not been recorded. $8.$ Received R$5000$ from H$.$ Keron whose account was written off as a bad debt previously. No entry was made for this. $9.$ A debtor whose account was overdue for one month must be charged R$100$ interest. $10.$ Provide for depreciation as follows: $10\mathrm{.}1$ On vehicles at $20\%$ per year using the reducing balance method. Note: Vehicles that cost R$650000$ were purchased on $01$ December $2023.$ The purchase has been recorded. $10\mathrm{.}2$ On equipment at $10\%$ per year using the fixed instalment method.

Answer & Explanation Solved by verified expert

See Answer