QUESTION 1 (20 Marks)

REQUIRED Use the information provided below to prepare the Statement of Financial Position of Lynwood Limited as at 31 August 2023. The notes to the financial statements are not required. Show all workings. INFORMATION The following balances were obtained from the accounting records of Lynwood Limited after some of the adjustments and closing transfers were completed on 31 August 2023, the end of the financial year.

R Inventory 315 000

Accounts receivable 92 000 Loan:

Lindor Bank (19.5%) 200 000

Equipment (Cost) 1 980 000

Accumulated depreciation on equipment?

Cash float 13 500

Accounts payable 211 000

Provision for bad debts?

Accrued income.?

Ordinary share capital 1 161 000

Retained income 540 000

The following adjustments must be made

The account of a debtor who owed R 2000 must be written off

The provision for bad debts must be adjusted to 5% of debtors

the rent income account reflected a total of R99 000 which was for rent for the period 01 September 2022 to 31 July 2023 make the necessary adjustment

interest on loan was owed for the last four months of the financial year. interest is not capitalized

the equipment was acquired on 01 March 2023. Depreciation must be provided at 20% per annum using the reducing balance method