Question

(20) QUESTION 3 The trial balance, adjustments and additional information given below were extracted from the accounting records of Mkhize Traders on 28 February 2017, the end of the financial year. FINANCIAL STATEMENTS REQUIRED Prepare the Statement of Financial Position of Mkhize Traders as at 28 February 2017. The notes to the financial statements are not required. Where applicable, show calculations in brackets. INFORMATION CONCHA TRADERS PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017 Credit (R) Debit (R) Balance sheet accounts section Capital Drawings Vehicles at cost 162 000 70000 180 000 120 000 Equipment at cost 90 000 Accumulated depreciation on vehicles Accumulated depreciation on equipment Trading inventory 38 000 70 000 32 000 Debtors control 4 000 Provision for bad debts 22 000 Bank 2 000 40 000 Cash float 80 000 Creditors control Mortgage loan: Aries Bank (16% p.a. ) 33 PROGRAMME HANDBOOK: JANUARY 2019 INTAKE

Answer 1

Balance Sheet As on 28 Feb 2017 Assets K K Non Current Assets Vehicles at cost 180,000 Less: Accumulated Depreciation Equipment at Cost Less: Accumulated Depreciation (112,500) 67,500 120,000 Co Le (56,000) 64,000 Total Non current assets 131,500 WE Current Assets Cur Trading Inventory Consumable store 68,000 200 (2000-1800 Ва Debtors Control (32,000-2000) 30,000 Less:-Provision for bad debt (1,500) 28,500 22,420(22,000+600-180) Bank Cash Float 2,000 3,000 500 60)*10% 450(see Note below) 124,570 Commission Receivable Prepaid Insurance Total Current Asset Total Assets 256,070 8

Equity and Liability Equity Capital Less:-Drawings 162,000 (71,000) 38,970 129,970 (70,000+1000) Add: Profit Liabilities Non Current liabilities Mortgage Loan (16%p.a) 80,000 Current liabilities 42,000 (40,000+2000) Creditors Control Outstanding Telephone Bill Outstanding Interest Rent Payable 700 (see note Below) 400 3,000 (see note Below) Total Current Liabilities 46,100 Total Equity and Liability 256,070

J. Marsh Received- 30% 600 1,400(600/30*70) 2,000 Bad Debt- 70% Total receivable Rent Payable - 1 Mar 2016 - 31 Dec 2016 (10 Months) - Rent per Month 2500(30000/12) and 1 Jan 2017 -28 Feb 2017 (2 Months) Rent per Month 3000 (36000/12) (25000*10)+(3000*2)= 31,000 Less: Rent Expense - Rent Payable- 28,000 3000 Interest Payable- (1 Sep. 2016- 28 Feb.2017) 6 Months 80,000*16%*6/12= 6400 Interest paid Outstanding Interest-400 6000

Prepaid Insurance (1 Mar 2017-31 May 2017) 3 Months 1800*3/12=450 Vehicle Equipment 180,000 Cost 120,000 Less:- Depreciation 90,000 38,000 Written Down Value 90,000 82,000 18,000 (120,000*15%) 64,000 Current year Depreciation(90,000*25%) 22,500 Balance 67,500