QUESTION $1$

$(20$ Marks$)$

REQUIRED

Use the information provided below $to$ prepare the Statement $of$ Comprehensive Income $of$ Cheshire $Ltd$ for the year ended $31$ December $2023.$

INFORMATION

The information given below was extracted from the accounting records $of$ Cheshire $Ltdon31$ December $2023(the$ end $of$ the financial year$).$

CHESHIRE $LTD$

PRE$-$ADJUSTMENT TRIAL BALANCE $ASAT31$ DECEMBER $2023$

Debit $(R)$

Credit $(R)$

Balance Sheet Accounts Section

Ordinary share capital

$1450000$

Retained earnings

$250000$

Land and buildings

$2500000$

Vehicles $(cost)$

$850000$

Equipment $(cost)$

$500000$

Accumulated depreciation $on$ vehicles

$300000$

Accumulated depreciation $on$ equipment

$200000$

Debentures $(10\%p.a.)$

$1250000$

Trading inventory

$550000$

Debtors control

$235000$

Provision for bad debts

$10000$

Bank

$5000$

Creditors control

$515000$

South African Revenue Services: Company tax

$140000$

Nominal accounts section

Sales

$4000000$

Cost $of$ sales

$2050000$

Sales returns

$75000$

Maintenance

$40000$

Rates

$30000$

Carriage $on$ sales

$45000$

Wages and salaries

$425000$

Stationery

$5000$

Bad debts

$10000$

Sundry expenses

$20000$

Insurance

$35000$

Telephone

$65000$

Water and electricity

$70000$

Directors$$ fees

$200000$

Auditor$s$ fees

$25000$

Ordinary share dividends

$100000$

$7975000$

$7975000$

Additional information

$1.$

Physical stocktaking $on31$ December $2023$ revealed the following inventories:

$1\mathrm{.}1$

Trading inventory, $R525000$

$1\mathrm{.}2$

Stationery, $R1000.$

$2.$

A notice from the municipality reflected the rates assessment for the year ended $31$ December $2023tobeR6000$ higher than the total amount paid during the financial year.

$3.$

Depreciation must $be$ provided for $as$ follows:

$3\mathrm{.}1$

$On$ vehicles $at20\%$ per annum $on$ the diminishing balance;

$3\mathrm{.}2$

$On$ equipment $at10\%$ per annum $oncost.$

$4.$

A debtor, who owed $R20000,$ was declared insolvent. She was only able $to$ pay $50\%of$ her debt, which has been received and recorded. The balance $of$ her account must now $be$ written off.

$5.$

The insurance total includes a premium $ofR18000$ that was paid for the period $01$ June $2023to31$ May $2024.$

$6.$

A statement from the auditors reflected the total audit fees for the financial year ended $31$ December $2023tobeR35000.$

$7.$

The provision for bad debts must $be$ adjusted $to5\%of$ the amount owed $by$ debtors.

$8.$

Provide for interest $on$ debentures for the year.

$9.$

$An$ amount $ofR2000$ for maintenance was inadvertently recorded $as$ sundry expenses.

$10.$

$An$ amount $ofR32875$ was owed $to$ South African Revenue Services for company tax $on31$ December $2023.$