Asterix Traders year end was 31 March 2023, and it is now in the process of...

 

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Asterix Traders year end was 31 March 2023, and it is now in the process of preparing its annual financial statements. The following pre-adjusted trial balance was made available: Vehicles at cost Equipment at cost Bank Accumulated depreciation: Equipment Mortgage Bond: Investec Capital (31/03/2022) Drawings Debtors control Allowance for credit losses Stock (31/03/2023) Pre-paid expenses Accrued income Creditors control Accrued expenses Income received in advance Sales Sales returns Carriage on sales Carriage on purchases Purchases Rental income Commissions Insurance Credit losses Purchases allowances Electricity and water Salaries Depreciation Interest expense Debit R 960 000 768 000 453 696 328 160 256 896 525 600 3 936 4 288 2560 1 091 200 17 600 1472 21 120 246 400 4680 928 Credit R 166 400 1 152 000 1 200 000 25 600 324 800 1 623 136 124 800 60 672 3 520 4 680 928 Additional Information: a) On checking the debtors accounts it was found that debt of R2 000 that was previously provided for must be written-off. b) Adjust the allowance for credit losses to 8% of debtors. c) Depreciation is to be raised as follows: Vehicles: 15% on the straight-line method. The cost in the trial balance relates to a vehicle that was purchased and brought into use on 1 September 2022 Equipment: 20% on the reducing balance method d) Rent for the month of April 2023 was received and recorded as income on 31 March 2023. e) Salary of R2 200 has been paid in advance. f) An insurance premium of R300 for the month of March 2023 has not been paid and accounted for at the end of the financial year. g) Commission to the value of R650 has been earned on 31 March 2023 but not yet received. Assume a profit of R215 390 after all adjustments have been considered. REQUIRED a) Prepare the year-end adjusting journal entries. (15) b) Prepare the statement of financial position as at 31 March 2023. (15) Asterix Traders year end was 31 March 2023, and it is now in the process of preparing its annual financial statements. The following pre-adjusted trial balance was made available: Vehicles at cost Equipment at cost Bank Accumulated depreciation: Equipment Mortgage Bond: Investec Capital (31/03/2022) Drawings Debtors control Allowance for credit losses Stock (31/03/2023) Pre-paid expenses Accrued income Creditors control Accrued expenses Income received in advance Sales Sales returns Carriage on sales Carriage on purchases Purchases Rental income Commissions Insurance Credit losses Purchases allowances Electricity and water Salaries Depreciation Interest expense Debit R 960 000 768 000 453 696 328 160 256 896 525 600 3 936 4 288 2560 1 091 200 17 600 1472 21 120 246 400 4680 928 Credit R 166 400 1 152 000 1 200 000 25 600 324 800 1 623 136 124 800 60 672 3 520 4 680 928 Additional Information: a) On checking the debtors accounts it was found that debt of R2 000 that was previously provided for must be written-off. b) Adjust the allowance for credit losses to 8% of debtors. c) Depreciation is to be raised as follows: Vehicles: 15% on the straight-line method. The cost in the trial balance relates to a vehicle that was purchased and brought into use on 1 September 2022 Equipment: 20% on the reducing balance method d) Rent for the month of April 2023 was received and recorded as income on 31 March 2023. e) Salary of R2 200 has been paid in advance. f) An insurance premium of R300 for the month of March 2023 has not been paid and accounted for at the end of the financial year. g) Commission to the value of R650 has been earned on 31 March 2023 but not yet received. Assume a profit of R215 390 after all adjustments have been considered. REQUIRED a) Prepare the year-end adjusting journal entries. (15) b) Prepare the statement of financial position as at 31 March 2023. (15)

Answer rating: 100% (QA)

a Yearend adjusting journal entries 1 Writeoff bad debt Debit Allowance for credit losses 2000 Credi... View the full answer