Summit Solutions $($Pty$)$ Ltd$,$ also known as SS$,$ is a privately owned company located in

South Africa and operates on a December year$-$end. SS has been conducting business

for the last decade.

Below is the pre$-$adjustment trial balance of SS:

Pre$-$adjustment trial balance of Summit Solutions $($Pty$)$ Ltd as at $31$ December

$2022$

Account Notes Debit Credit

Bank $($overdraft$)2000$

Capital $670000$

Drawings $48000$

Insurance expense $1302500$

Interest income $36750$

Inventories $-01/01/20222100000$

Investment $390000$

Land and buildings $2000000$

Payables control $80000$

Purchases $700000$

Receivables control $120000$

Rent expense $465000$

Rent income $5260000$

Retained earnings $-01/01/20222023100$

Salary expense $6520000$

Sales $960000$

Stationery expense $750000$

Sundry expenses $6350$

$40018504001850$

$4$ HFAC$130-1-$Jul$-$Dec$2023-$SuppSA$1-$LVN$-$V$2-20230307$

NOTES:

$1.$ Insurance expense:

In December $2022,$ the fixed monthly insurance debit order was not processed due to

an oversight by the insurance company. This was rectified by SS$\text{'}$s managing director,

Sam, who informed the insurance company. On $2$ January $2023,$ the insurance debit

order was processed twice, resulting in a total deduction of R$55000$ from SS$\text{'}$s bank

account. The trial balance needs to be adjusted to account for this transaction.

$2.$ Inventory:

SS$\text{'}$s conducted an inventory count on $31$ December $2022$ and determined that the

closing inventory on hand was valued at R$160000.$ No inventory was reported as

damaged or stolen during the count. The trial balance has not been updated with this

information.

$3.$ Investment $/$ Interest income:

SS$\text{'}$s investment earns interest every third month. The interest earned for the last quarter

of $2022$ amounted to R$2250$ and was only received on $10$ January $2023.$ The

accountant still needs to process this transaction.

$4.$ Rent expense:

The pre$-$adjusted trial balance includes $13$ months' worth of rental expenses. The rent

for January $2023$ was paid on $28$ December $2022.$ The monthly rental expense has

remained unchanged over the last $2$ years.

$5.$ Rent income:

SS$\text{'}$s receives R$20000$ per month as rent income according to a sub$-$letting agreement.

The rent for January $2023$ was received on $29$ December $2022.$ The pre$-$adjusted trial

balance currently reflects $13$ months' worth of rent income.

$6.$ Salary expense:

SS$\text{'}$s awards annual bonuses to its employees, which are paid on $1$ January of the

following financial year. The company policy is to calculate bonuses at a rate of $4\%$ of

the total salary expense account on $31$ December of the current financial year.

$5$ HFAC$130-1-$Jul$-$Dec$2023-$SuppSA$1-$LVN$-$V$2-20230307$

$7.$ Stationery:

All stationery purchases are expensed during the year. On $31$ December $2022,$ the

accountant found unused stationery worth R$10000$ on hand.

Additional Information:

Except for the accounts affected by notes $1-7$ mentioned above, assume that all other

accounts in the pre$-$adjusted trial balance are complete and accurate for the financial

year ending $31$ December $2022.$

REQUIRED:

$1\mathrm{.}1$ Prepare the adjusting journal entries required in the records of Summit Solutions

$($Pty$)$ Ltd for the year ended $31$ December $2022,$ for transactions $1-7$ listed under

the Notes. Show all workings, and reference accordingly