MODULE Accounting

Question $1(20.$Marks$)$

The following is a pre$-$adjusted Trial balance of Albany $($Pty$)$ Ltd on $28$ February $2021.$

$\backslash$table$[[$Balance sheet section,,$],[$Capital$,,596400,00],[$Drawings$,130500,00,],[-$and and buildings,$300000,00,],[$Equipment$,145000,00,],[$Accumulated depreciation $(1$ March $2020),,33000,00],[$Fixed deposit: TT Bank $(8\%$ p$.$a$),50000,00,],[$Loan: BTK Bank $(16\%$ p$.$a$),,30000,00],[$Inventory $(1$ March $2020),105330,00,],[$Debtors control,$51630,00,],[$Creditors control,,$74400,00],[$Bank$,18720,00,],[$Petty cash,$1500,00,],[$Nominal Accounts$],[$Sales$,,341600,00],[$Purchases$,408760,00,],[$Sales returns,$5000,00,],[$Purchases returns,,$4500,00],[$Rent income,,$30400,00],[$Interest on fixed deposit,,$2000,00],[$Bank charges,$2700,00,],[$water & electricity,$18810,00,],[$Telephone$,5250,00,],[$insurance$,5850,00,],[$interest on loan,$7250,00,],[$Rates and taxes,$24600,00,],[$Salaries & wages,$34640,00,],[$Consumables stores,$10960,00,],[$Advertising$,14800,00,]]$

Adjustments and additional information

Inventory on hand on $28$ February $2021$ amounted to R$91000.$ Inventories are measured at cost$,$ on a FlFO method and at net realisable value, whichever is the lower.

Consumable stores according to stocktaking on $28$ February $2021$ amounted to R$900.$

Advertising included a payment of R$1080$ for advertisements to appear in a local newspaper from $1$ November $2020$ to$30$ April $2021.$

Depreciation is provided annually on equipment at $10\%$ p$.$a$.$ using the diminishing balance method.

The loan from BTK bank is an unsecured loan that was granted to Albany $($Pty$)$ Ltd on $01$ February $2020.$ Provide for outstanding interest on loan. The loan is repayable in $10$ equal instalments. The first instalment is payable on $31$ March $2021$

The investment at TT Bank was made on $1$ June $2020.$ Provide for outstanding interest on the fixed deposit. The fixed deposit matures on $1$ June $2021.$

The tenant has already paid the rent for March $2021.$ Note that the monthly rental of R$6000$ was increased by $10\%$ with effect from $1$ December $2020.$

A debit order for R$500$ for the insurance of the owner's home was erroneously entered in the insurance account.

A debtor who owed R$800$ has been declared insolvent. His estate paid a first and final dividend of $70$ cents in the Rand. The balance of his account must be written off. No entries have been made for these transactions.

A debtor's account with a credit balance of R$200$ must be transferred to her account in the creditor's ledger.

Required

Prepare statement of comprehensive income of Albany $($Pty$)$ Ltd for the year ended $28$ February $2021.$

Question $2(10$ marks$)$

Using examples, explain the following terms:

$2$a$.$ Accrual concept $(2)$

$2$b$.$ Consistency $(2)$

$2$c$.$ Materiality $(2)$

$2$d$.$ Going concern $(2)$

$2$e$.$ Matching concept $(2)$