Extract of pre-adjustment trial balance of Kumkani Traders as at 30 September 20.20 Debit Credit R....

  

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Extract of pre-adjustment trial balance of Kumkani Traders as at 30 September 20.20 Debit Credit R. R. Capital (1 October 20.19). 200 000 Drawings.. Inventory: Trading (1 October 20.19). Allowance for credit losses. 61 725 4 450 Mortgage: Ginsberg Bank Fixed deposit (at 7.5% per annum).. Sales. . 195 000 50 000 345 060 9 500 Carriage on purchases. Sales returns. 6 780 19 800 Rental income. 197 800 Purchases... 2 890 Purchases returns. 38 367 Depreciation.. Salaries and wages.. 88 500 27 300 Insurance expenses. 14 280 Telephone expenses. 23 450 Water and electricity.. 1 600 Credit losses. After a year-end inventory count, the value of trading inventory on hand was R123 450. fe oti on After a year-end inventory count, the value of trading inventory on hand was R123 450. Additional information Upon reviewing the list of trade receivables outstanding at year-end, the accountant determined that the allowance for credit losses account should amount to R3 000 on 30 September 20.20. (a) (b) The fixed deposit investment of R50 000 was made on 1 April 20.20. Interest on this investment is paid annually. Use the information in the pre-adjustment trial balance and the additional information to determine what adjustment is needed to adjust the allowance for credit losses for the year ended 30 September 2020: A. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R3 000. OB. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R1 450. OC. Credit losses account debited; and the allowance for credit losses account will be credited; by an amount of R1 450. D. No adjustment entry is necessary. OE. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R4 450. Resel Selection Extract of pre-adjustment trial balance of Kumkani Traders as at 30 September 20.20 Debit Credit R. R. Capital (1 October 20.19). 200 000 Drawings.. Inventory: Trading (1 October 20.19). Allowance for credit losses. 61 725 4 450 Mortgage: Ginsberg Bank Fixed deposit (at 7.5% per annum).. Sales. . 195 000 50 000 345 060 9 500 Carriage on purchases. Sales returns. 6 780 19 800 Rental income. 197 800 Purchases... 2 890 Purchases returns. 38 367 Depreciation.. Salaries and wages.. 88 500 27 300 Insurance expenses. 14 280 Telephone expenses. 23 450 Water and electricity.. 1 600 Credit losses. After a year-end inventory count, the value of trading inventory on hand was R123 450. fe oti on After a year-end inventory count, the value of trading inventory on hand was R123 450. Additional information Upon reviewing the list of trade receivables outstanding at year-end, the accountant determined that the allowance for credit losses account should amount to R3 000 on 30 September 20.20. (a) (b) The fixed deposit investment of R50 000 was made on 1 April 20.20. Interest on this investment is paid annually. Use the information in the pre-adjustment trial balance and the additional information to determine what adjustment is needed to adjust the allowance for credit losses for the year ended 30 September 2020: A. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R3 000. OB. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R1 450. OC. Credit losses account debited; and the allowance for credit losses account will be credited; by an amount of R1 450. D. No adjustment entry is necessary. OE. Allowance for credit losses account debited; and the credit losses account will be credited; by an amount of R4 450. Resel Selection

Answer rating: 100% (QA)

Answer OptionB is the correct answer Calculation Beginnin... View the full answer