Question 6.1
You are provided with the following information:
PRE- ADJUSTMENT TRIAL BALANCE OF YEGO TRADERS ON 28 February 20.23
Dr Cr
Capital 1 780 802
Drawings 14 400
Land and Buildings 1 566 000
Equipment 20 700
Vehicles 127 000
Mortgage loan (15%) 30 000
Short term loan (14%) 6 000
Fixed deposit (12%) 12 000
Receivables control 4 116
Payables control 5 457
Inventory 16 326
Petty cash 450
Bank 5 748
Accumulated Depreciation: Equipment (1 March 20.22) 900
Accumulated Depreciation: Vehicles (1 March 20.22) 5 400
Allowance for bad debts 180
Sales 115 500
Cost of Sales 58 350
Salaries and wages 128 800
Cleaning material 1 500
Rent income 7 800
Bank charges 399
Stationery 525
Telephone 861
Vehicle expenses 1 200
Interest on loan 5 760
Bad debts 120
Interest on fixed deposit 720
1 958 507 1 958 507
Additional Information:
1. The wage of an employee for February 20.23 is due to him, R300.
2. Rent has been received for 13 months.
3. Interest on the mortgage loan was paid in full for 12 months, while interest on the short-term loan was paid for six months in advance. The short-term loan was obtained on 1 March 20.22.
4. The mortgage loan is repayable in monthly instalments of R1 000.
5. Write off an extra amount of R96 as irrecoverable.
6. Depreciation is provided for as follows:
- On equipment: An amount of R900 per year.
- On vehicles: 20% per annum according to the diminishing balance method.
7. The following was on hand at 28 February 20.23
- Cleaning materials R900
- Stationery R25
8. An amount of R139 is due on the telephone account of February 20.23.
9. Interest on fixed deposit was received for six months. The money on the fixed deposit was invested on 1 June 20.22 for a period of 5 years.
10. The allowance for bad debts must be adjusted to 5% of the receivables.
Required:
a) The statement of Profit or Loss of Yego Traders for the year ended 28 February 20.23
b) The Statement of changes in equity for the year ended 28 February 20.23
c) The Statement of Financial position as at 28 February 20.23
(Notes to Financial statements are not required).
a) Statement of Profit or Loss for Yego Traders for the year ended 28 February 20.23:
Sales: 115,500
Cost of Sales: 58,350
Gross Profit: 57,150
Expenses:
Salaries and wages: 128,800
Cleaning material: 1,500
Rent: (7,800)
Bank charges: (399)
Depreciation - Equipment: (900)
Depreciation - Vehicles: (25,400)
Stationery: (525)
Telephone: (861)
Vehicle expenses: (1,200)
Interest on loan: (5,760)
Bad debts: (216)
Interest on fixed deposit: 720
Irrecoverable debts: (96)
Total Expenses: (20,101)
Net Profit/(Loss): 37,049
b) Statement of Changes in Equity for Yego Traders for the year ended 28 February 20.23:
Beginning Capital: 1,780,802
Add: Net Profit: 37,049
Less: Drawings: (14,400)
Ending Capital: 1,803,451
c) Statement of Financial Position as at 28 February 20.23:
Assets:
Land and Buildings: 1,566,000
Equipment: 20,700
Accumulated Depreciation - Equipment: (900)
Net Equipment: 19,800
Vehicles: 127,000
Accumulated Depreciation - Vehicles: (31,800)
Net Vehicles: 95,200
Fixed deposit: 12,000
Receivables control: 4,116
Inventory: 16,326
Cleaning material: 900
Stationery: 25
Petty cash: 450
Bank: 5,748
Total Assets: 1,842,565
Liabilities:
Mortgage loan: 30,000
Less: Current Portion: (1,000)
Net Mortgage loan: 29,000
Short term loan: 6,000
Payables control: 5,457
Total Liabilities: 40,457
Equity:
Capital: 1,803,451
Total Equity: 1,803,451
Total Liabilities and Equity: 1,842,565