Use the information given below to draw up the Statement of Comprehensive Income for TREK TRADING for
Question:
Use the information given below to draw up the Statement of Comprehensive Income for TREK TRADING for the year ended 28 February 2017.
Treck Trading Pre Adjustment trial Balance as at 28 February 2017 Debit Credit Balance Sheet Accounts Capital 980 000 Drawings 284 210 Vehicles 750 000 Equipment 270 000 Accumulated Depreciation - Vehicle 366 000 Accumulated Depreciation - Equipment 118 800 Fixed Deposit H Bank (13,5% p.a) 70 000 Trading Inventory 146 000 Debtors Control 90 000 Provision for Bad Debts 3 500 Bank 567 765 Cash Float 5 200 Creditors Control 72 000 Loan R Bank (18% p.a) 280 000 NONINAL ACCOUNTS Sales 1 234 000 Cost of Sales 725 880 Sales Return 18 120 Salaries and Wages 400 000 Bad Debts 4 200 Banks Charges 3 500 Free Income 610 925 Discount Received 4 900 Insurance 23 400 Electricity and Water 27 400 Telephone 10 800 Rand expenses 143 100 Interests on loan 37 800 Interest on fix deposit 7 875 Security 23 800 Consumables 18 000 Advertising 20 550 Vehicle expenses 13 275 Staff Development and Training 25 000 3 678 000 3 678 000
Adjustments and additional information:
A. Fee income of R4 600 has been received in advance.
B. No entry has been made for a direct deposit of R2 000 made by a debtor whose account had been written off as irrecoverable.
C. Consumables include an amount of R120 for photocopies of recipe books made by the proprietor.
D. Physical stocktaking on 28 February 2017 revealed the following inventories on hand Trading inventory, R153 000 Consumables, R880.
E. A payment of R2 200 on 27 February 2017 for security services has been incorrectly recorded as insurance. Correct this error.
F. The landlord has increased the monthly rent by R2 000 as per tenancy agreement with effect from 01 September 2016. Rent for February 2017 has not yet been paid.
G. An advertising contract costing R1 320 was paid and recorded on 01 August 2016. This contract expires on 31 July 2017. Make the necessary adjustment.
H. Annual depreciation is provided as follows:
• On equipment at 12% p.a. on cost.
• On vehicle at 20% p.a. on the diminishing balance method.
I. Provision for bad debts must be increased by R1 500.
J. Provide for outstanding interest on fixed deposit.
K. Interest on loan for the last quarter is outstanding.
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay