Signature Traders has a June 2023 year-end. Management has provided you the below pre-adjusted trial balance and has requested you to assist in the preparation of their year-end financial statements.

	Debit	Credit
Capital		100
Retained earnings		169 935
Drawings	3 570
Buildings	1 874 250
Accumulated depreciation: Buildings		655 988
Furniture & Fittings	1 785 000
Accumulated depreciation: Furniture and Fittings		446 250
Loan: Nedbank		715 625
Inventory	151 725
Petty cash	4 463
Bank	77 964
Receivables	698 756
Prepaid expenses
Accrued Income
Payables		93 988
Income received in advance
Accrued expenses
Allowance for credit losses		9 180
Bond: ABSA		1 160 250
Sales		2 859 359
Discounts: sales	35 700
Cost of sales	1 100 853
Rental income		145 860
Interest on loan: WesBank	129 859
Cell phone and internet	17 850
Rent expense	36 400
Interest on mortgage loan	98 175
Salaries and wages	134 232
Insurance	89 888
Advertising	17 850
Depreciation
Credit losses
	6 256 535	6 256 535

Additional information:

a) The business sub-lets a portion of the building and has rental of R13 260 monthly. The tenant still owes the June rental to the business at year end.

b) The business has not received the invoice for cell phone and internet expense for the month of June from the vendor.

c) Rent expense amounts to R2 800 per month. The rent for July 2023 has already been paid on 30 June 2023.

d) A customer provided a deposit of R13 500 for product to be delivered in August 2023. This is currently included in sales.

e) Fixed assets are depreciated as follows:

Buildings - 10% on straight line method.

Furniture and Fittings - 15% per annum on the reducing balance method.

f) Debtor A Smith is insolvent, his debt of R1 040 must be written off as irrecoverable. An allowance for credit losses was previously raised for the debt.

g) It is the policy of company hold an allowance for credit losses of 2% of outstanding debtors.

REQUIRED:

a) Prepared the year-end adjusting journal entries 

b) Prepare the statement of profit and loss for the financial year ended 30 June 2023. 

Answer rating: 100% (QA)

a Yearend adjusting journal entries Rental income accrual Date Account Debit Credit Accrued Income 1... View the full answer