QUESTION:

REQUIRED

Use the information provided below to prepare the Statement of Comprehensive Income for the year ended

$28$ February $2023.$

INFORMATION

FIESTA TRADERS

PRE$-$ADJUSTMENT TRIAL BALANCE AS AT $28$ FEBRUARY $2023$

Debit $($R$)$ Credit $($R$)$

Balance Sheet accounts section

Capital $2520000$

Drawings $160000$

Land and buildings $1800000$

Vehicles at cost $1360000$

Equipment at cost $1000000$

Accumulated depreciation on vehicles $760000$

Accumulated depreciation on equipment $320000$

Fixed deposit: Rio Bank $(10\%$ p$.$a$.)300000$

Trading inventory $230000$

Debtors control $260000$

Provision for bad debts $16000$

Bank $134000$

Cash float $12000$

Creditors control $220000$

Mortgage loan: Rio Bank $(12\%$ p$.$a$.)640000$

Nominal accounts section

Sales $3000000$

Cost of sales $960000$

Sales returns $20000$

Salaries and wages $838000$

Bad debts $24000$

Stationery $40000$

Rates and taxes $116000$

Motor expenses $180000$

Repairs to building $34000$

Telephone $76000$

Electricity and water $92000$

Bank charges $16000$

Insurance $40000$

Interest on mortgage loan $66000$

Interest on fixed deposit $12000$

Rent income $270000$

$77580007758000$

Adjustments and additional information

$1.$ Stocktaking on $28$ February $2023$ revealed the following inventories:

$1\mathrm{.}1$ Trading inventory R$220000$

$1\mathrm{.}2$ Stationery R$4000$

$2.$ The telephone account for February $2023,$ R$6000,$ was due to be paid on $01$ March $2023.$

$3.$ A debtor who was declared insolvent paid R$900$ which represented $30\%$ of her debt. The balance of

her account must now be written off.

$4.$ The provision for bad debts must be decreased to R$14000.$

$5.$ Rent has been received up to $31$ March $2023.$ Note: The rental was increased by R$2000$ per month

with effect from $01$ November $2022.$

$6.$ The insurance total includes an annual premium of R$15000$ that was paid for the period $01$ June $2022$

to $31$ May $2023.$

$7.$ Provide for outstanding interest on the mortgage loan for February $2023.$

$8.$ Provide for the outstanding interest on fixed deposit. The investment in fixed deposit was made on

$01$ September $2022.$

$9.$ A payment for the annual service of a motor vehicle was not recorded, R$5000.$

$10.$ Provide for depreciation as follows:

$10\mathrm{.}1$ On equipment at $10\%$ p$.$a$.$ on cost$.$

$10\mathrm{.}2$ On vehicles at $20\%$ p$.$a$.$ using the diminishing balance method. Note: A vehicle with a cost price of

R$360000$ was purchased on $01$ December $2022.$ The purchase has been recorded.

Answer rating: 100% (QA)

Fiesta Traders Statement of Comprehensive Income for the year ended 28 February 2023 Notes R Revenue ... View the full answer