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1. Depreciation should be accounted for as follows:

Vehicles (5 % on reducing balance method)

Equipment (15 % on straight-line method)

Rent has been received until the 31 October 2022

Debtor A Sims is insolvent; his debt of R 5000 must be written off as irrecoverable.

Salary of R15000 has been paid in advance.

5.

6.

Trading stock

Commission to the value of R 3000 has been earned on 30 September 2022 but not yet received.

Inventory on 30 September 2022 amounts to the following:

R 5000

Packing material

R 200

7. Delivery fees of R 900 on purchases have not yet been paid

REQUIRED

Prepare the statement of profit and loss and other comprehensive income for Polo Trading for the year ended

30 September 2022 detailed below.

Write the figures without spacing for example R 250 000 is written as 250000. Where applicable round off to the nearest whole number.

Statement of profit and loss for Polo Trading for the year ended 30 September 2022

Sales

Cost of sales

Opening stock

plus purchases

less purchase returns

plus carriage on purchase

less closing stock

gross profit

other income

commissions received

rent received

less operating expenses

salaries

electricity and water

insurance

packaging material

credit losses

carriage on sales

depreciation

profit before interest and tax

interest expense

profit before tax

Accumulated depreciation: Equipment Accumulated depreciation: Vehicles Accounts payable Accounts receivable Stock (1/10/2021) Credit losses Drawings Packing material Insurance Rent received Commission received Purchases returns Sales returns Carriage on purchases Purchases Carriage on sales Sales Electricity and water Salaries Equipment Vehicles Land and buildings Bank 68238 8000 391 7480 1360 4675 Capital 425000 Accumulated depreciation: Equipment Accumulated depreciation: Vehicles Accounts payable Accounts receivable Stock (1/10/2021) Credit losses Drawings Packing material Insurance Rent received Commission received Purchases returns Sales returns Carriage on purchases Purchases Carriage on sales Sales Electricity and water Salaries Equipment Vehicles Land and buildings Bank 68238 8000 391 7480 1360 4675 Capital 425000

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