Question 5 Question 5 Financial statement FINANCIAL STATEMENTS (20) QUESTION 5 T
ID: 2328514 • Letter: Q
Question
Question 5Question 5
Financial statement FINANCIAL STATEMENTS (20) QUESTION 5 The trial balance, adjustments and additional information given below were extracted from the accounting records of Concha Traders on 28 February 2017, the end of the financial year. REQUIRED Prepare the Statement of Financial Position of Concha Traders as at 28 February 2017. The notes to the financial statements are not required. Where applicable, show calculations in brackets INFORMATION CONCHA TRADERS PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2017 Debit ( Credit (a Balance sheet accounts section Capital 162 000 Drawings Vehicles at cost 180 000 120 000 Equipment at cost Accumulated depreciation on vehicles 90 000 38 000 Accumulated depreciation on equipment Trading inventory 70 000 32 000 Debtors control Provision for bad debts 4 000 Bank 22 000 2 000 Cash float Creditors control 40 000 80 000 Mortgage loan: Aries Bank (16% pa) Nominal accounts section Sales 485 000 Cost of sales 240 000 3000 84 000 5 000 2 000 28 000 15 000 Sales returns Salaries and wages Bad debts Consumable stores Rent expense Motor expenses Bad debts recovered Telephone Electricity and water Bank charges nsurance 2 000 7 000 11 000 3 000 4 000 6 000 terest on mortgage loan 5 000 906 000 ommission income 906 000 78
Explanation / Answer
CONCHA TRADERS
Income Statement
For the year ended February 28 2017
Sales
R 485,000.00
Less: Sales return
R 5,000.00
Net sales
R 480,000.00
Cost of Sales
R 240,000.00
Gross Profit
R 240,000.00
Operating Expenses
Salaroies and wages
R 84,000.00
Bad debts (Net)
R 3,000.00
Consumable stores
R 2,000.00
Rent expense
R 28,000.00
Motor Expense
R 15,000.00
Telephone expense
R 7,000.00
Electricity and Water
R 11,000.00
Bank Charges
R 3,000.00
Insurance
R 4,000.00
Total Operating Expenses
R 157,000.00
Operating income
R 83,000.00
Other Income and expenses
Interest Expense
R 6,000.00
Commission Income
R 5,000.00
R 1,000.00
Net Income
R 82,000.00
CONCHA TRADERS
Owner's Capital Account
as at 28 February 2017
Beginning balance of capital account
R 162,000.00
Add: Income during the year
R 82,000.00
Less: Drawings
R 70,000.00
Ending balance of capital account
R 174,000.00
CONCHA TRADERS
Statement of Financial Position
as at 28 February 2017
Assets
Inventory
R 70,000.00
Debtors (Net ) (32000-4000)
R 28,000.00
Bank
R 22,000.00
Cash Float
R 2,000.00
Total Current Assets
R 122,000.00
Other Assets
Vehicle
R 180,000.00
Less: Accumulated Depreciation
R 90,000.00
R 90,000.00
Equipment
R 120,000.00
Less: Accumulated Depreciation
R 38,000.00
R 82,000.00
Total Assets
R 294,000.00
Liabilities
Creditors
R 40,000.00
Mortgage Loan :Aries bank (16% pa)
R 80,000.00
Total Liabilities
R 120,000.00
Owner's Equity
R 174,000.00
Total Liabilities and Owner's Equity
R 294,000.00
*Statement of Financial Position is same as Balance sheet.
CONCHA TRADERS
Income Statement
For the year ended February 28 2017
Sales
R 485,000.00
Less: Sales return
R 5,000.00
Net sales
R 480,000.00
Cost of Sales
R 240,000.00
Gross Profit
R 240,000.00
Operating Expenses
Salaroies and wages
R 84,000.00
Bad debts (Net)
R 3,000.00
Consumable stores
R 2,000.00
Rent expense
R 28,000.00
Motor Expense
R 15,000.00
Telephone expense
R 7,000.00
Electricity and Water
R 11,000.00
Bank Charges
R 3,000.00
Insurance
R 4,000.00
Total Operating Expenses
R 157,000.00
Operating income
R 83,000.00
Other Income and expenses
Interest Expense
R 6,000.00
Commission Income
R 5,000.00
R 1,000.00
Net Income
R 82,000.00
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