QUESTION 4 (20 marks) SmartFarm (Pty) Ltd is a technology-driven agriculture company that focuses on sustainable farming practices and crop optimisation. The company has a 31 December financial year-end. You are presented with the following pre-adjustment trial balance of SmartFarm (Pty) Ltd:

Pre-adjustment trial balance of SmartFarm (Pty) Ltd as at 31 December 2023Account Notes Debit Credit Bank Overdraft 2 000Capital 670 000Drawings 48 000 Interest Income 2 6 750Interest - 01/01/20231100 000 Investment 290 000 Farming equipment 4 000 000 Trade Payables 80 000Purchases 700 000 Trade Receivable 120 000 Rent Expenses 365 000 Rent Income 4 260 000Retained earnings - 01/01/2023 3 720 600Salaries 5520 000 Sales 960 000Stationery Expense 650 000 Miscellanous expense 6 350 5 699 350,00 5 699 350,00

Notes: 1. Inventory: SmartFarm (Pty) Ltd conducted a physical inventory count on 31 December 2023 and identified closing inventory of R160 000. No inventory losses or damages were reported during the count. The trial balance has not been updated with this information. 2. Investment / Interest revenue: Interest on the investment is received every quarter. For the last quarter of 2023, the interest amounted to R2 250 and was received on 10 January 2024. The accountant has yet to process this transaction. 3. Rental expense: Included in the pre-adjustment trial balance is 13 months' worth of rental expenses. The rent for January 2024 has already been paid on 29 December 2023. The monthly rental expense has remained fixed and unchanged over the past 2 years. 4. Rental income: According to a sub-letting agreement, SmartFarm (Pty) Ltd receives rental income amounting to R20 000 per month. The rent for January 2024 was already received on 31 December 2022. The pre-adjustment trial balance currently represents 13 months' worth of rental income. 5. Salaries: SmartFarm (Pty) Ltd provides annual bonuses to its employees. As per company policy, bonuses are paid on 1 January of the following financial year. Bonuses are calculated at a rate of 4% of the total salary expenses account as of 31 December of the current financial year. The bonus calculation has not yet been performed and thus is not yet accounted for. 6. Stationery: All stationery purchases are expensed during the year. As of 31 December 2023, the accountant noted that there was unused stationery amounting to R10 000 on hand. No adjustments were made yet. Additional information: Apart from Notes 1-6, assume that all other accounts in the pre-adjusted trial balance are complete and accurately accounted for, for the financial year ended 31 December 2023. REQUIRED: Prepare an extract of the Statement of Financial Position for SmartFarm (Pty) Ltd for the financial year ended 31 December 2023, displaying only the Current Assets and Current Liabilities. Totals are required. Notes to the statement are not required. (20 marks) --- End of Question 4 ---