QUESTION 2 BASIC FINANCIAL STATEMENT

The following information appeared in the records of Rodeo Traders on 31 December 2019

RODEO TRADERS TRIAL BALANCE ON 31 DECEMBER 2019
	R
Land and Buildings	48 000
Vehicles at cost	20 000
Furniture at cost	4 000
Accumulated depreciation: Vehicles	4 000
Furniture	500
Fixed deposit : Nedbank	9 600
Capital	64 000
Drawings	3 200
Loan: ABSA bank	3 200
Debtors control	12 000
Creditors control	6 400
Inventory	16 000
Bank (Overdraft)	540
Allowances for credit losses	160
Sales	135 600
Cost of sales	80 000
Rent income	8 800
Interest income	480
Salaries and wages	29 520
stationary	160
Credit losses	1 200

Additional information:

1. The fixed deposit was made on 1 January 2019 at Nedbank. The interest rate is 10%per annum. Interest is payable annually.

2. The long-term loan of 15% per annum was obtained on 1 July 2019.

3. Received R160 from debtor whose account has previously been written off as irrevocable.

4. Write off the account of a debtor of R800 as irrecoverable.

5. Adjust the allowance for credit losses to 2% of outstanding debtors.

6. The rent for one (1) month is still outstanding.

7. A physical stocktake revealed the following.

1. Inventory on hand R15 600

2. Stationary R80

8. Depreciation should be provided as follows:

1. Vehicles at 20% per annum on reducing balance method.

2. Furniture at 10% per annum on straight line method.

You are required to:

Prepare the statement of comprehensive income of Rodeo Traders for the year ended 31 December 2019.

Prepare the statement of financial position of Rodeo Traders on 31 December 2019.

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