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FINANCIAL STATEMENT AND DISPOSAL OF ASSET (25 Marks)

6.1

STATEMENT OF COMPREHENSIVE INCOME (20 marks) Use the following information extracted from the accounting records of IBHUBESI TRADING to

prepare the Statement of Comprehensive Income for the year ended 28 February 2017. IBHUBESI TRADING

PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017

Statement of financial position accounts section

CREDIT

DEBIT
48 000
485 000
210 000
150 000
45 000
88 660
45 130
37 525
2 200
136 000
5 000
130 500
4 200
6 840
14 490
30 000
5 410
10 160
15 180
1 860
19 470
9 375
1 500 000

Capital 614 000 Drawings Land and Buildings Vehicles

Equipment Accumulated Depreciation on Vehicles 120 000 Accumulated Depreciation on Equipment 84 000 Fixed Deposit : B. Bank [ 9% p.a. ] Trading Inventory Debtors Control Provision for bad debts 2 450 Bank Cash Float Creditors Control 42 200 Loan : K. Bank [ 15 % p.a. ] 75 000

Nominal accounts section

Sales 501 905 Cost of sales Sales return Salaries and wages

Bad debts Stationery Rates Vehicle expense Maintenance Telephone Electricity and water Bank charges Insurance

Interest on loan Interest on fixed deposit 3 375 Rent income 57 070

1 500 000

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Adjustments and Additional Information

6.2.

(5 marks)

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A. B. C. D.

E.

F.

G. H.

I.

J.

Rent for March 2017 has been received in advance.

Write off a debtors outstanding account of R430 as irrecoverable.

Adjust the provision for bad debts to 5% of trade debtors.

Building maintenance costing R5 000 was erroneously debited to the Land and Buildings account. Correct this error.

Rates includes a payment of R12 000 made to the municipality for the period 01 July 2016 to 30 June 2017.

The proprietor used R615 from the cash float for personal use.

Interest on loan has been paid up to 31 December 2016. Provide for the outstanding amount. Update the interest on fixed deposit.

Stocktaking on 28 February 2017 revealed the following stock on hand:.

• Trading Inventory, R80 060.

• Stationery, R540.

  Depreciation is provided as follows :

• On equipment at 10% p.a.on cost. NB: New equipment costing R20 000

  was purchased on 01 September 2016 and was properly recorded.

• On vehicles at 20% p.a. on the diminishing balance method.

  DISPOSAL OF FIXED ASSET

  Use the information supplied below, by Cosmic Stores, to prepare the

  Fixed Assets Realisation Account.

  INFORMATION

• On 30 October 2016, the business sold an old equipment costing R60 000

  for R3 600 cash.

• The accumulated depreciation on this equipment was R50 400 on

  01 March 2016.

• Equipment is depreciated at 14%p.a. on cost.

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General Ledger of Cosmic Stores + FIXED ASSETS REALISATON --

Sales

Less : Cost of sales

Gross Profit

Add : Operating Income

Gross Income

Less : Operating Expenses

Operating profit before interest

Add : Interest Income

Less : Interest Expense

Net profit for the year

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