Ray Construction's trial balance on 31 December 2021, is presented as follows. All 2021 transactions have...

  

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Ray Construction's trial balance on 31 December 2021, is presented as follows. All 2021 transactions have been recorded except for the items described below. Figures are in R'000' CR Cash and cash equivalent Accounts receivable Notes receivable Interest receivable Inventory Prepaid insurance Land Buildings Equipment Patents Allowance for credit losses Accumulated depreciation- Buildings Accumulated depreciation- Equipment Accounts Payable Notes payable due in 2022 Revenue received in advance SARS: Corporate Taxes Salaries and wages payable Interest Payable Notes payable after 2022 Issued share capital Retained income Dividends Sales revenue Interest revenue Rent revenue Cost of goods sold Gains on disposal of items of PPE Salaries and wages expense Credit losses expense Interest expense Depreciation expense Other operating expense Amortisation expense SARS: VAT Control Account Total DR 28 000 42 320 10 000 ?? 36 200 4 400 20 000 160 000 60 000 8 000 12 000 630 000 110 000 ?? ?? ?? 61 800 ?? 1 182 720 345 49 000 24 000 32 545 11 000 6.900 ?? ?? ?? 35 000 50 000 63 600 910 000 ?? ?? ?? 330 1 182 720 Unrecorded transactions: (1) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) On 1 May 2021, Ray purchased equipment for R14,950 (all paid in cash and VAT inclusive at a VAT rate of 15%). On 1 July 2021, Ray sold for R4,025 (VAT inclusive) equipment which originally cost R5,000. Accumulated depreciation on this equipment at 1 January 2021, was R1,800. On31 December 2021, Ray sold on account R10 810 (VAT Inclusive) of inventory that cost R6,600. Ray estimates that allowance for estimated credit losses at year-end to be R4,600. The note receivable is a one-year, 8% note dated 1 April 2021. No interest has been recorded. The balance in prepaid insurance represents payment of a R4,400 6-month premium on 1 October 2021. The building is being depreciated using the straight-line method over 40 years. The residual value is R20,000. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The residual value is 10% of cost. The equipment purchased on 1 May 2021, is being depreciated using the straight-line method over 5 years, with a residual value of R1,000. The patent was acquired on 1 January 2021 and has a useful life of 10 years from that date. Unpaid salaries and wages at 31 December 2021, total R2,200. The unearned rent revenue of R6,900 (VAT inclusive) was received on1 December 2021, for 4 months' rent. Both the short-term and long-term notes payable are dated 1 January 2021, and carry a 9% interest rate. All interest is payable in the next 12 months. Corporate Income tax expense is to be estimated at 28 per cent of the before tax profits. No provisional tax has been made during the year ended on 31 December 2021 Instructions a. Prepare journal entries for the unrecorded transactions listed above. b. Prepare a 31 December 2021, adjusted trial balance. c. Prepare a 2021 Statement of profit or loss and a 2021 statement of changes in equity. d. Prepare a 31 December 2021 classified statement of financial position. Hand in this work by no later than on 3 August 2022 at 13h00. Ray Construction's trial balance on 31 December 2021, is presented as follows. All 2021 transactions have been recorded except for the items described below. Figures are in R'000' CR Cash and cash equivalent Accounts receivable Notes receivable Interest receivable Inventory Prepaid insurance Land Buildings Equipment Patents Allowance for credit losses Accumulated depreciation- Buildings Accumulated depreciation- Equipment Accounts Payable Notes payable due in 2022 Revenue received in advance SARS: Corporate Taxes Salaries and wages payable Interest Payable Notes payable after 2022 Issued share capital Retained income Dividends Sales revenue Interest revenue Rent revenue Cost of goods sold Gains on disposal of items of PPE Salaries and wages expense Credit losses expense Interest expense Depreciation expense Other operating expense Amortisation expense SARS: VAT Control Account Total DR 28 000 42 320 10 000 ?? 36 200 4 400 20 000 160 000 60 000 8 000 12 000 630 000 110 000 ?? ?? ?? 61 800 ?? 1 182 720 345 49 000 24 000 32 545 11 000 6.900 ?? ?? ?? 35 000 50 000 63 600 910 000 ?? ?? ?? 330 1 182 720 Unrecorded transactions: (1) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) On 1 May 2021, Ray purchased equipment for R14,950 (all paid in cash and VAT inclusive at a VAT rate of 15%). On 1 July 2021, Ray sold for R4,025 (VAT inclusive) equipment which originally cost R5,000. Accumulated depreciation on this equipment at 1 January 2021, was R1,800. On31 December 2021, Ray sold on account R10 810 (VAT Inclusive) of inventory that cost R6,600. Ray estimates that allowance for estimated credit losses at year-end to be R4,600. The note receivable is a one-year, 8% note dated 1 April 2021. No interest has been recorded. The balance in prepaid insurance represents payment of a R4,400 6-month premium on 1 October 2021. The building is being depreciated using the straight-line method over 40 years. The residual value is R20,000. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The residual value is 10% of cost. The equipment purchased on 1 May 2021, is being depreciated using the straight-line method over 5 years, with a residual value of R1,000. The patent was acquired on 1 January 2021 and has a useful life of 10 years from that date. Unpaid salaries and wages at 31 December 2021, total R2,200. The unearned rent revenue of R6,900 (VAT inclusive) was received on1 December 2021, for 4 months' rent. Both the short-term and long-term notes payable are dated 1 January 2021, and carry a 9% interest rate. All interest is payable in the next 12 months. Corporate Income tax expense is to be estimated at 28 per cent of the before tax profits. No provisional tax has been made during the year ended on 31 December 2021 Instructions a. Prepare journal entries for the unrecorded transactions listed above. b. Prepare a 31 December 2021, adjusted trial balance. c. Prepare a 2021 Statement of profit or loss and a 2021 statement of changes in equity. d. Prepare a 31 December 2021 classified statement of financial position. Hand in this work by no later than on 3 August 2022 at 13h00.

Answer rating: 100% (QA)

a 1 Equipment was purchased on 1 May 2021 for R49000 2 The patent was acquired on 1 January 2021 and has a useful life of 10 years from that date 3 Unpaid salaries and wages at 31 December 2021 total ... View the full answer