QUESTION $2(20$ Marks$)$

The following is an extract from the Trial Balance of Bright Day $($Pty$)$ Ltd for the year ended $31$ December $2022.$

Debit Credit

Rent Received $22000$

Stationery $800$

Water and electricity $4500$

Sales $125000$

Commission received $11200$

Bad debts $750$

Cost of Sales $78000$

Accumulated depreciation $75000$

Accounts receivable $($Debtors$)250400$

Machinery $200000$

Interest on loan $?$

The following adjustments still need to be taken into account in the preparation of the financial statements:

$1.$ Only $10$ months$$ rent was received and included in the trial balance above

$2.$ Stationery unused on $31$ December $2022$ was valued at R$200$

$3.$ Commission amounting to R$1600$ was received in advance

$4.$ An additional amount of R$400$ must be written off as irrecoverable due to a debtor being declared insolvent

$5.$ An amount of R$12500$ must be raised as a provision for doubtful debts

$6.$ Depreciation on machinery that cost R$200000$ has been correctly calculated for the year as R$50000.$ No entries have

been processed for this amount as yet

$7.$ The January invoice for water and electricity of R$550$ has still not been paid.

$8.$ Interest expense on bank loans is calculated at $15\%$ per annum. The loan was received on $31$ December $2018$ for an

amount of R$10000.$ The interest was paid monthly. The capital repayment is only due on $31$ December $2022.$