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
Company tax payable	18 000
Bank (DR)	99 000
Accrued expenses	?
Dividends payable	161 000

The following adjustments must be made:

The account of a debtor who owed R2 000 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 capitalised.

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