The following information, which has not been accounted for under, is also available:

1. Walla - Nawa
   List of balances as at 31 March 2018
   	N$
   Land	100 000
   7% of long term investment	25 600
   Equipment	101 110
   Accumulated depreciation: Equipment	31 415
   Inventory as at 1 April 2017	24 810
   Receivables	71 050
   Payables	55 885
   VAT refunds	5 160
   Bank and Cash	7 820
   Provision for doubtful debt as at 1 April 2017	5 625
   Rent Expenses	15 000
   Sales	406 170
   Purchases	196 450
   Sales Returns	4 150
   Purchases Returns	3 750
   Distribution and Advertising	7 320
   Insurance	11 250
   Wages and Salaries	90 470
   4% Long Term Bank Loan	91 250
   Interest on Long Term Paid	1 760
   Bad debts	1 120
   Drawings	5 290
   Capitals	74 265

   
   
2. Each of the above balance is a normal balance.
3. The inventory counts as at 31 March 2018 showed closing inventory valued at N$ 21 195.
4. The annual rental for the business premises amount to N$20 000 per annum.
5. Insurance has been paid until 30 June 2018.
6. A receivable owing N$2 000 has recently been downgraded by ratings agencies and is experiencing severe cash flow problem; as results, Walla - Nawa has decided to write off these receivables account as irrecoverable. The allowance for credit losses should be maintained at 6% of outstanding receivables.
7. The interest on the long-term investment has not yet been received.
8. Depreciation is to be provided for as follows:

Land (Not depreciated)

Equipment 15% reducing balance method (depreciation should be calculated to the nearest whole number).

You are required to:

1. Prepare the statement of comprehensive income for the year ended 31 March 2018 (22 marks)
2. Prepare the statement of financial position as at 31 March 2018 (20 marks)
3. Advise Mr Walla – Nawa on four ways of reducing bad debts (4 marks)

Answer rating: 100% (QA)

Balance Sheet Income statement Opening Stock 2481000 Assets Sales 40617000 Purchase 19645000 Noncurr... View the full answer