Here is the trial balance of North Traders as at 31 December 20x0 (financial year end):

Additional information:

• The business lets a portion of its premises at a monthly rent of R300. The property was first let on 1 April 20x0 and the lessee pays the rent quarterly, in advance.

• On 1 January 20x0 the business lent R5 000 to one of its main suppliers for a three-year period. Interest on the loan is payable half-yearly, in arrears, on 1 July and 1 January until the loan is repaid.

• Wages amounting to R600 were earned by the business’s employees in December 20x0 but were only paid on 3 January 20x1.

• The inventory of unused office stationery on hand at 31 December 20x0 was R500. The cost of all stationery purchased is included in office expenses.

• Fixtures and fittings were purchased on 1 January 20x0, and are to be depreciated at 10% per annum calculated on original cost.

• The cost of unsold goods on hand at 31 December 20x0, as determined by an inventory count, was R3 250.

• R2 000 new capital was invested in the business on 1 July 20x4.

You are required to:

1 Record the adjusting journal entries.

2 Prepare the statement of profit or loss & other comprehensive income and the statement of financial position as at 31 December 20x0.

Transcribed Image Text:

Capital Drawings Land and buildings Fixtures and fittings 9% mortgage bond Accounts receivable Bank Sales Purchases Rent income Interest income Wages and salaries Office expenses North Traders TRIAL BALANCE AS AT 31 DECEMBER 20x0 Details Debit Fol. B1 B2 28885222²22 B3 B4 B6 B7 N2 N3 N4 N5 N6 6 000 00 24 000 00 4 000 00 5 000 00 1 425 00 20 000 00 9 400 00 6 000 00 00 75 825 Credit 30 000 00 2 000 00 40 000 00 3 600 00 225 00 75 825 00