QUESTION $1(20$ Marks$)$

REQUIRED

Prepare the Statement of Comprehensive Income for the year

ended $28$ February $2025.$

INFORMATION

The trial balance, additional information and adjustments given

below were obtained from the records ofDigicel Traders on $28$

February $2025,$ the end of the financial year.

DIGICEL TRADERS

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

$2025$

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

Balance sheet accounts section

Capital$6194300$

Drawings$630700$

Land and buildings at cost$4090000$

Equipment at cost$2720000$

Vehicles at cost$1740000$

Accumulated depreciation on equipment$880000$

Accumulated depreciation on vehicles$440000$

Fixed deposit: Sim Bank $(8\%$ p$.$a$.)150000$

Trading inventory$430000$

Debtors control$533000$

Provision for bad debts$24000$

Bank overdraft$146000$

Petty cash$5600$

Creditors control$658000$

Loan: Ven Bank $(18\%$ p$.$a$.)320000$

Nominal accounts section

Sales$7162000$

Cost of sales$3975000$

Sales returns$126000$

Advertising$88000$

Stationery$112000$

Bad debts$30000$

Discount allowed$49000$

Discount received$23000$

Electricity and water$252000$

Telephone$120000$

Interest on fixed deposit$5000$

Interest on overdraft$4000$

Insurance$42000$

Salaries$805000$

Bank charges$23000$

Rent income$212000$

Municipal rates$139000$

$16064$

$300$

$16064$

$300$

ADDITIONAL INFORMATION AND ADJUSTMENTS

$1.$ According to physical stocktaking, the following were on hand

on $28$ February $2025$:$1\mathrm{.}1$ Trading inventory R$410000$

$1\mathrm{.}2$ Stationery R$2000$

$2.$ Advertising includes a payment of R$20000$ made to $$Tab$-$

loid News$$ for five advertisements$($each with the same

value$)$ that will be published monthly from January to May

$2025.$

$3.$ Part of the building has been let to a tenant since $01$ March

$2024.$ Rent has been received upto $30$ April $2025.$ The

rental was increased by R$1000$ per month with effect from

$01$ March$2025.$

$4.$ Write off the account of debtor, T$.$ Roper, R$3000.$

$5.$ The provision for bad debts must be adjusted to $5\%$ of deb$-$

tors. $($The provision for bad debtsadjustment account must

be used.$)$

$6.$ The telephone account for February $2025$ was due to be paid

on $02$ March $2025,$ R$10000.$

$7.$ Provide for the outstanding interest on fixed deposit. The inv$-$

estment in fixed deposit was madeon $01$ July $2024$ and the

maturity date is $30$ June $2025.$

$8.$ The loan from Ven Bank was obtained on $01$ February

$2025.$ Provide for the outstandinginterest on loan.A notice from the municipality indicated that the municipal

rates for the first six months of thefinancial year amounted

to R$11000$ per month. The municipal rates increased to R$14$

$600$ permonth with effect from $01$ September $2024.$ Make

the necessary adjustment.

$10.$ Provide for depreciation as follows:

$10\mathrm{.}1$ on vehicles at $20\%$ per year using the diminishing balance

method.

$10\mathrm{.}2$ on equipment at $10\%$ per year using the fixed instalment

method. Note: Equipment with a costprice of R$300000$ was

purchased on $01$ December $2024.$ The purchase was reco$-$

rded.