Question

QUESTION 5 STATEMENT OF FINANCIAL POSITION The trial balance, adjustments and additional information provided below were extracted from the accounting records of Klicks Traders on 29 February 2016, the end of the financial year. REQUIRED Use the trial balance and additional information to prepare the Statement of Financial Position of Klicks Traders as at 29 February 2016. The Statement of Comprehensive Income and notes to the financial statements are not required. Credit (R) 240 950 138 000 54 000 6 600 61 500 105 000 Klicks Traders PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2016 Debit (R) Balance sheet accounts section Capital Drawings 114 000 Vehicles at cost Equipment at cost 165 000 Accumulated depreciation on vehicles Accumulated depreciation on equipment Trading inventory 105 000 Debtors control 48 000 Provision for bad debts Bank 35 850 Creditors control Mortgage loan: Midi Bank (16% p.a.) Nominal accounts section Sales Cost of sales 360 000 Sales returns 4500 Salaries and wages 129 000 Bad debts 1500 Consumable stores 2 300 Rent expense 34 500 Motor expenses 26 700 Bad debts recovered Telephone 9 300 Electricity and water 18 600 Bank charges 3 700 Insurance 8 100 Interest on mortgage loan 7 800 Commission income 1 358 850 742 500 1 358 850

Answer 1

	Klicks Traders
	Statement of financial position
	as at 29, February,2016
Ref.No.	Account Titles	Debit	Credit
1.1	Trading inventory	103000
	Cost of sales	2000
	Trading inventory		105000
1.2	Consumabe stores expense	2100
	Consumabe stores		2100
	(2300-200)
2	Prepaid rent	3167
	Rent expense		3167
	(see wkgs.)
3	Provision for bad debts	600
	Debtors control		600
4	Provision for bad debts	300
	Bad debts		300
5	Interest expense	9000
	Interest payable		9000
	(105000*16%)-7800
6	Telephone expenses	800
	Creditors control		800
7	Bank charges	200
	Bank		200
8	Bank	500
	Bad debts recovered		500
9	Insurance	700
	Electricity and water		700
10	Interest receivable	50
	Interest revenue		50
	(4000*15%/12)
11.1	Depreciation expense-equipment	16500
	Acc. Depreciation expense-equipment		16500
	(165000*10%)
11.2	Depreciation expense-Vehicles	19650
	Acc. Depreciation expense-vehicles		19650
	(refer wkgs.)

Workings for :
JE 2--prepaid rent
Per mth. Rent =(34500-700)/12=	2816.67
so, rent prepid for Mar 2016=2817+350=	3167
To calculate depn. On Vehicles	JE--11.2
Cost	285000
Less: Dec 1,2015 purchase	65000
Cost	220000
Less: Acc. Depn.	138000
Diminishing Balance	82000
Full yr.Depn. At 20%*82000	16400
(Dec1- feb 28) depn. On dec 1 purchase(65000*20%*3/12)	3250
Total depn. On vehicles	19650

	Preadj. T/B		Adjusting entries		Adjusted T/B
	Debit	Credit	Debit	Credit	Debit	Credit
Balance sheet a/cs section
Capital		240950				240950
Drawings	114000				114000
Vehicles at cost	285000				285000
Equipment at cost	165000				165000
Acc. Depn.-vehicles		138000		19650		157650
Acc. Depn.-eqpt.		54000		16500		70500
Trading inventory	105000		-2000		103000
Debtors control	48000		-600		47400
Prepaid rent			3167		3167
Interest receivable			50		50
Provision for bad debts		6600		-900		5700
Bank	35850		300		36150
Creditors control		61500		800		62300
Interest payable				9000		9000
Mortgage loan,Midi bank		105000				105000
Nominal accounts section
Sales		742500				742500
Cost of sales	360000		2000		362000
Sales returns	4500				4500
Consumabe stores expense			2100		2100
Salaries & wages	129000				129000
Bad debts	1500		-300		1200
Consumable stores(c/asset)	2300		-2100		200
Rent expense	34500		-3167		31333
Motor expenses	26700				26700
Bad debts recovered		1300		500		1800
Telephone	9300		800		10100
Electricity & water	18600		-700		17900
Bank charges	3700		200		3900
Insurance	8100		700		8800
Interest on mortgage loan	7800		9000		16800
Commission income		9000				9000
Interest revenue				50		50
Depreciation expense-equipment			16500		16500
Depreciation expense-Vehicles			19650		19650
Totals	1358850	1358850	45600	45600	1404450	1404450

Statement of Financial position
Assets
Bank		36150
Debtors control	47400
Less:Provision for bad debts	-5700	41700
Prepaid rent		3167
Interest receivable		50
Consumable stores		200
Trading inventory		103000
Total current assets			184267
Equipment at cost	165000
Less:Acc. Depn.-eqpt.	-70500	94500
Vehicles at cost	285000
Less:Acc. Depn.-vehicles	-157650	127350
Total fixed assets			221850
Total assets			406117
Liabilities & SH Equity
Liabilities
Creditors control		62300
Interest payable		9000
Mortgage loan,Midi bank(payable next yr.)		20000
Total current liabilities			91300
Long-term liabilities
Mortgage loan,Midi bank(balance)			85000
Total Liabilities			176300
SH. Equity
Capital (240950+102867)		343817
Less: Drawings		-114000
Total SH. Equity			229817
Total Liabilities & SH Equity			406117