QUESTION $3$

$(20$ Marks$)$

REQUIRED

Prepare the Statement of Comprehensive Income for the year ended $31$ December $2023.$ Some of the amounts have been entered in the answer book for you.

INFORMATION

The information given below was extracted from the accounting records of Cheshire Limited on $31$ December $2023($the end of the financial year$).$

CHESHIRE LIMITED

PRE$-$ADJUSTMENT TRIAL BALANCE AS AT $31$ DECEMBER $2023$

Balance Sheet Accounts Section

Debit $($R$)$

Credit $($R$)$

Ordinary share capital

$1600000$

Retained earnings

$200000$

Land and buildings

$2700000$

Vehicles $($cost$)$

$650000$

Equipment $($cost$)$

$500000$

Accumulated depreciation on vehicles

$250000$

Accumulated depreciation on equipment

$200000$

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

$1300000$

Debtors control

$180000$

Provision for bad debts

$10000$

Bank

$115000$

Creditors control

$465000$

South African Revenue Services: Company tax

$145000$

Nominal accounts section

Sales

$3785000$

Purchases

$2055000$

Sales returns

$25000$

Purchases returns

$165000$

Opening inventory

$550000$

Carriage on purchases

$40000$

Maintenance

$35000$

Rates

$25000$

Carriage on sales

$50000$

Wages and salaries

$400000$

Stationery

$5000$

Bad debts

$10000$

Sundry expenses

$35000$

Insurance

$15000$

Telephone

$35000$

Water and electricity

$40000$

Directors$$ fees

$240000$

Auditor$$s fees

$25000$

Ordinary share dividends

$100000$

$7975000$

$7975000$

Additional information

$1.$

Physical stocktaking on $31$ December $2023$ revealed the following inventories:

$1\mathrm{.}1$

Trading inventory, R$180000$

$1\mathrm{.}2$

Stationery, R$1000.$

$2.$

A notice from the municipality reflected the rates assessment for the year ended $31$ December $2023$ to be R$24000.$

$3.$

Depreciation must be provided as follows:

$3\mathrm{.}1$

On vehicles, R$80000.$

$3\mathrm{.}2$

On equipment at $10\%$ per annum on cost$.$ Note: Equipment with a cost price of R$100000$ was purchased on $01$ July $2023.$ This transaction has been recorded.

$4.$

A debtor, who owed R$5000,$ was declared insolvent. Cheshire Limited received and recorded $40\%$ of the amount owed. The balance of his account must now be written off.

$5.$

The insurance total includes an insurance premium of R$6000$ that was paid for the period $01$ April $2023$ to $31$ March $2024.$

$6.$

An amount of R$10000$ was due to be paid for audit fees on $02$ January $2024.$

$7.$

The provision for bad debts must be increased to R$11000.$

$8.$

Provide for interest on debentures that is yet to be paid.

$9.$

An amount of R$69535$ was overpaid to South African Revenue Services for company tax.