Bank charges1 300 
Cleaning1 500 
Computer equipment12 500 
Cost of sales32 000 
Credit losses420 
Depreciation2 300 
Fuel and oil56 000 
Garden maintenance1 300 
Goods sold 125 000
Interest on loan2 600 
Interest received 5 800
Municipal services6 850 
Printing and stationery16 715 
Repairs and maintenance: Building5 200 
Repairs and maintenance: Vehicles6 850 
Salaries and wages35 850 
Services rendered 560 000
Staff welfare650 
Telephone18 600 
Capital: Mr Richard 450 000
Capital: Mr Lionel 375 000
Drawings: Mr Richard35 000 
Drawings: Mr Lionel27 000 
Current account: Mr Richard2 500 
Current account: Mr Lionel 6 400
Retained income 42 500
Land400 000 
Buildings850 000 
Accumulated depreciation on buildings 21 000
Vehicles130 000 
Accumulated depreciation on vehicles 65 000
Equipment and electronics52 000 
Accumulated depreciation on equipment and electronics 2 200
11% Long-term loan 156 000
Bank: FNB2 500 
Bank: ABSA125 665 
Debtors control account60 000 
Allowance for credit losses 7 400
Creditors control account 90 000
Petty cash5 600 
Inventory: Stationery4 000 
Inventory: Materials25 000 
SARS: Provisional Tax paid15 000 
SARS: VAT 5 600
SARS: Tax payable                                           23 000  
 1 934 9001 934 900

Additional information
The partnership agreement stipulates that:
1. Interest of 3,5% is paid to the partners on the current account balances as at the first day of the financial year.
2. The interest on the capital accounts is calculated at 13%. Mr Richard contributed an additional R150 000 on his capital account on 1 July 2022, while Mr Lionel reduced his capital with R25 000 on the same date.
3. Mr Richard is entitled to a bonus of R75 000 before any profit shares are calculated. He opted to have it set-off against his drawings account annually. The bonus has not been awarded yet.
4. The partners share profits equally. Due to the set-off in the drawings accounts the agreement stipulate that partners can roll their drawings balances for a maximum of 6 months into the new financial year. You can assume that the profits before appropriations amounted to R425 000.

The following transactions have not been accounted for:
1. The computer equipment purchased during the year was debited to the computer equipment expense account. The items were purchased on the last day of the financial year and should be depreciated at 33%.
2. The final income tax assessment was received and recorded at R23 000. Provisional tax payments have been recorded for the year.
3. Defective materials inclusive of VAT at 15% to the value of R1 500 was returned to a supplier. A debit note was received but the transaction has not been recorded yet.
4. A customer returned goods sold for R5 300 for a credit on her account. The company has a 15% markup policy.
5. Mr. Richard’s bank card has been stolen and he needed to settle the school account on/before the examinations could be finalised. The partners agreed that the payment could

be affected by the accountant. The debit of R 5 000 was passed to the salaries and wages account.
6. The loan is repayable in 3 equal instalments with the first instalment due on 30 June 2023.

Record the additional information transactions in the general journal for the year ended 31 December 2022. (30)

Prepare the statement of changes in equity of XYZ Traders as at 31 December 2022. (20)

Get answers on above questions on Accounting

Answer 1: 

The statement of changes in equity of XYZ Traders as at 31 December 2022 is prepared as follows:


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