Financial Fitness (FF) is a small financial consulting practice owned and managed by Musa Lefu and...

  

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Financial Fitness (FF) is a small financial consulting practice owned and managed by Musa Lefu and Davis Musk as its shareholders. The pre-adjustment trial balance of Financial Fitness on 31 March 2022 is as follows: Bank balances Accounts receivable Rent paid in advance Office supplies on hand Office computers and printers Motor vehicles Call deposit held with FNB Wesbank wheels loan Trade creditors Fees received in advance Share capital as of 1 March 2022 Distributions Fees earned Petrol expense Financial Fitness (PTY) Limited Trial Balance 31 March 2022 Advertising expense Salaries expense Interest expense Account No. 101 112 115 118 122 125 128 312 309 318 401 721 502 501 505 507 518 DR 48 075 4 000 4 000 1500 40 000 100 000 10 000 6 000 300 800 2 425 500 CR 100 000 1600 7000 100 000 9 000 The following internal transactions still need to be considered on 31 March 2022: (1) On 20 March 2022, Ann Parker paid Financial Fitness R7 000 for seven consultations to be provided over the coming months. R7 000 was recorded in the fees received in the advance account. By 31 March 2022, two consultations to the value of R2 000 had been held with her. (ii) On 1 March 2022, Musa transferred R10 000 from the business bank account to a call deposit at the bank, earning interest at 3% per annum. The amount of R10 000 was recorded in the call deposit account. On 31 March 2022, Financial Fitness accounted for the interest earned for the month. (in) On 1 March 2022, Davis found premises in Hyde Park. The monthly rental for the office space was R1 000 per month. The business paid rent, in advance, for four months on 1 March 2022, and R4 000 was recorded in the rent paid in the advance account. On 31 March 2022, Financial Fitness accounted for the rent expense for the month. (iv) On 31 March 2022, the telephone account for R200 and the light and water account for R300 arrived in the post. These accounts must be paid by 10 April 2022. CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 (v) On 2 March 2022, Financial Fitness purchased office supplies from Office World for R1 500, which was recorded in the office supplies account. On 31 March 2022, Tom counted office supplies on hand, costing R1 300. (vi) On 2 March 2022, Financial Fitness purchased computer equipment for R15 000 and office equipment for R25 000. The amount of R40 000 was recorded in the computer and office equipment account. All the equipment was expected to have a useful life of ten years. Financial Fitness also purchased a new motor vehicle for R100 000 on the same day that was recorded in the motor vehicle account. The estimated useful life of the vehicles is five years. On 31 March 2022, Financial Fitness accounted for the equipment and motor vehicles used for the month. (vii) Financial Fitness uses a share capital account as the equity account. The unadjusted share capital balance represented accumulated earnings and contributed share capital of R38 000 and R62 000. You are required to: a) Prepare the statement of profit or loss for FF Limited for the reporting periods ended 31 March 2022. [12marks] b) Prepare the statement of changes in equity for FF Limited for the reporting period ended 31 March 2022. [5 marks] c) Prepare the statement of financial position for FF (PTY) Limited as of 31 March 2022. [20 marks] Financial Fitness (FF) is a small financial consulting practice owned and managed by Musa Lefu and Davis Musk as its shareholders. The pre-adjustment trial balance of Financial Fitness on 31 March 2022 is as follows: Bank balances Accounts receivable Rent paid in advance Office supplies on hand Office computers and printers Motor vehicles Call deposit held with FNB Wesbank wheels loan Trade creditors Fees received in advance Share capital as of 1 March 2022 Distributions Fees earned Petrol expense Financial Fitness (PTY) Limited Trial Balance 31 March 2022 Advertising expense Salaries expense Interest expense Account No. 101 112 115 118 122 125 128 312 309 318 401 721 502 501 505 507 518 DR 48 075 4 000 4 000 1500 40 000 100 000 10 000 6 000 300 800 2 425 500 CR 100 000 1600 7000 100 000 9 000 The following internal transactions still need to be considered on 31 March 2022: (1) On 20 March 2022, Ann Parker paid Financial Fitness R7 000 for seven consultations to be provided over the coming months. R7 000 was recorded in the fees received in the advance account. By 31 March 2022, two consultations to the value of R2 000 had been held with her. (ii) On 1 March 2022, Musa transferred R10 000 from the business bank account to a call deposit at the bank, earning interest at 3% per annum. The amount of R10 000 was recorded in the call deposit account. On 31 March 2022, Financial Fitness accounted for the interest earned for the month. (in) On 1 March 2022, Davis found premises in Hyde Park. The monthly rental for the office space was R1 000 per month. The business paid rent, in advance, for four months on 1 March 2022, and R4 000 was recorded in the rent paid in the advance account. On 31 March 2022, Financial Fitness accounted for the rent expense for the month. (iv) On 31 March 2022, the telephone account for R200 and the light and water account for R300 arrived in the post. These accounts must be paid by 10 April 2022. CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 (v) On 2 March 2022, Financial Fitness purchased office supplies from Office World for R1 500, which was recorded in the office supplies account. On 31 March 2022, Tom counted office supplies on hand, costing R1 300. (vi) On 2 March 2022, Financial Fitness purchased computer equipment for R15 000 and office equipment for R25 000. The amount of R40 000 was recorded in the computer and office equipment account. All the equipment was expected to have a useful life of ten years. Financial Fitness also purchased a new motor vehicle for R100 000 on the same day that was recorded in the motor vehicle account. The estimated useful life of the vehicles is five years. On 31 March 2022, Financial Fitness accounted for the equipment and motor vehicles used for the month. (vii) Financial Fitness uses a share capital account as the equity account. The unadjusted share capital balance represented accumulated earnings and contributed share capital of R38 000 and R62 000. You are required to: a) Prepare the statement of profit or loss for FF Limited for the reporting periods ended 31 March 2022. [12marks] b) Prepare the statement of changes in equity for FF Limited for the reporting period ended 31 March 2022. [5 marks] c) Prepare the statement of financial position for FF (PTY) Limited as of 31 March 2022. [20 marks]

Answer rating: 100% (QA)

aFinancial Fitness PTY Limited Income Statement For the Period Ended 31 March 2022 Revenue Fees earn... View the full answer