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The following information relates to Richfield Distributors:

Pre$-$adjustment trial balance of Richfield Distributors as at $31$ December $20\mathrm{.}1$

Debit Credit

Capital $(1/01/20\mathrm{.}1)........\mathrm{.}141700$

Land and Building $($at cost$)...........\mathrm{.}263240$

Vehicle $($at cost$)..............\mathrm{.}40000$

Equipment $($at cost$)...........\mathrm{.}9000$

Accumulated depreciation: Vehicle $(1/02/20\mathrm{.}1)........\mathrm{.}11200$

Accumulated depreciation: Equipment $(1/01/20\mathrm{.}1)........\mathrm{.}1710$

Fixed deposit: Spot Bank Ltd$...........\mathrm{.}50000$

Inventory: Merchandise $.................\mathrm{.}8500$

Trade receivables control $........\mathrm{.}5200$

Bank $..............\mathrm{.}3100$

Petty cash $........\mathrm{.}100$

Cash float $........\mathrm{.}500$

Trade payables control $........\mathrm{.}9550$

Long$-$term borrowing: Bean Ltd $........\mathrm{.}25000$

Allowance for credit losses $..............\mathrm{.}300$

Sales $.................\mathrm{.}381790$

Cost of sales $........\mathrm{.}165400$

Sales returns $...........\mathrm{.}1200$

Wages $..............\mathrm{.}200$

Salaries $..............\mathrm{.}25000$

Assessment rates $.......\mathrm{.}1500$

Settlement discount granted $...........\mathrm{.}380$

Licences $........\mathrm{.}1000$

Vehicle expenses $.........\mathrm{.}3500$

Credit losses $............\mathrm{.}550$

Packing material $..............\mathrm{.}4700$

Insurance $........\mathrm{.}2250$

Water and electricity $..........\mathrm{.}2100$

Telephone $.....\mathrm{.}1400$

Advertising $......\mathrm{.}2000$

Rent income $.....\mathrm{.}15600$

Settlement discount received $.....\mathrm{.}650$

Interest on investment $.....\mathrm{.}500$

Credit losses recovered $............\mathrm{.}120$

QUESTION FOUR $(20$ MARKS$)$

The following adjustment must still be accounted for:

$1.$ Packaging material on hand at $31$ December $20\mathrm{.}1$ to the value of R$980.$

$2.$ The long$-$term borrowing was entered into on $1$ October $20\mathrm{.}1.$ according to the agreement, interest is

payable bi$-$annually at a rate of $18\%$vper annum.

$3.$ Advertisements includes an amount of R$400$ paid for January $20\mathrm{.}2$

$4.$ Rental income includes an amount in respect of January $20\mathrm{.}2.$

$5.$ Interest on fixed deposit has not yet been received for the last two months of the financial year.

Interest is calculated at a rate of $12\%$ per annum.

$6.$ Insurance includes an amount of R$750$ paid for the period $1$ November $20\mathrm{.}1$ to $31$ October $20\mathrm{.}2.$

$7.$ The telephone account of R$165$ for December $20\mathrm{.}1$ has not yet been paid.

$8.$ Equipment of R$2000($cost price$)$ was $[$purchased on $1$ July $20\mathrm{.}1.$

$9.$ Depreciation must be provided as follows:

a$.$ Vehicle: $20\%$ per annum on the diminishing balance method

b$.$ Equipment: $10\%$ per annum on the diminishing balance method

$10.$ The account of Loose$-$Ends Ltd$,$ a debtor who owes the entity R$200,$ must still be written off as

irrecoverable.

$11.$ It was determined that on $31$ December $20\mathrm{.}1$ the allowance for credit losses should amount to R$250.$

Required

Prepare the journal entries with narration of the above additional information or adjustments given.

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