Author: Anonymous

  ADJUSTMENTS STILL TO BE TAKEN INTO ACCOUNT FOR THE FINAN…

  ADJUSTMENTS STILL TO BE TAKEN INTO ACCOUNT FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2021:     1. Funky Builders, a cash contractor, made the following alterations to the building: •        Built an additional storeroom, R100 000. •        Repaired a leak in the roof, R8 000.     2. Depreciation on equipment amounts to R11 980 for the year.     3. Vehicles are depreciated at 20% p.a. on the diminishing balance method. The business owns two identical vehicles that were originally bought on the same date. One of these vehicles was sold on 30 November 2020. The cash selling price of R80 000 has been incorrectly credited to Sales.     4. The insurance for March and April 2021 was paid in advance.     5. It was decided to write off the debt of R. Wright as irrecoverable, R700.     6. Adjust the provision for bad debts to 5% of book debts.     7. The following stock was on hand according to a physical stock take on 28 February 2021: •        Trading stock         R161 800. •        Packing materials R    4 800.     8. The tenant has paid rent for only ten months. However, he has informed Lunabugz that he has personally paid R24 000 to repair faulty wiring. This amount must be offset against the outstanding and future rental payments.     9. Provide for outstanding interest on the fixed deposit at 8% per annum.       10. The details of the week ended 28 February 2021 reflects an employee, appointed on 22 February 2021, has not been entered into the Wages Journal.   His details are as follows: •        Gross wage                               R2 800 •        PAYE deduction                        R   230 •        UIF                                             R     28   The business contributes on a rand-for-rand basis to UIF. The employee will receive a cash envelope with his net wages on 1 March 2021.       11.. The mortgage bond statement for the year reflected R125 600 as the interest to be capitalised for the year ended 28 February 2021.     12. According to the internal auditor, the gross profit for the year ended 28 February 2021 was 40% of the net sales for the year.             REQUIRED:     2.1 Complete the Tangible Asset note by supplying the missing details marked A-G. Show your calculations in order to achieve part-marks. 15   2.2 Draw up the Income Statement for the year ended 28 February 2021. 64   2.3 Prepare the notes to the Balance Sheet as at 28 February 2021. NB: Lunabugz show all their current liabilities under Trade and other payables and not separately in the Balance Sheet 34       [113]

QUESTION 2 FINANCIAL STATEMENTS Information pertaining t…

QUESTION 2 FINANCIAL STATEMENTS Information pertaining to Lunabugz, a store that sells wide variety of computers and accessories. The following were extracted from the Pre-Adjustment Trial Balance of Lunabugz on 28 February 2021:     DEBIT R CREDIT R BALANCE SHEET ACCOUNTS     Land and buildings 2 400 000   Vehicles 520 000   Accum. depreciation on Vehicles (1/3/20)   312 000 Equipment 180 000   Accum. depreciation on Equipment (1/3/20)   60 200 Trading Stock 164 000   Debtors Control 86 200   Provision for Bad Debts   4 308 Fixed Deposit : Uwais Financial Services 120 000   Mortgage Bond : Gruber Bank   820 000 Creditors Control   176 502 NOMINAL ACCOUNTS     Sales   2 432 600 Cost of sales ?   Debtors’ allowances 28 600   Rent income   102 000 Interest on fixed deposit   8 000 Repairs 42 000   Packing materials 45 800   Bad debts 9 000   Salaries and wages 199 500   UIF Contribution 1 995   Insurance 50 400