Moses, a qualified motor mechanic with 22 years of experience, began his own business, Command Vehicle Repairs. On 1 March 2023, Moses withdrew money from his Retirement Fund and deposited R80 000 into a business bank account on 9 March 2023. The following transactions for the month of June 2023 need to be recorded as required below:

Date Transaction details

June 2

A rental agreement for premises occupied on1 March 2023 stipulated that the rent for the first three months was R1 000 per month. Thereafter the rent increases to R2 000 per month until 28 February 2024. The June 2023 rent was paid by a direct deposit into the Landlord’s bank account.
3 Hired 2 employees to assist with repairs, cleaning and administration. Each assistant will be paid at the rate of R3 500 per month.
4 Moses brought in personal tools and equipment to be used in the business. The tools and equipment were valued at R32 000.
5 The electricity account for May 2023 of R2 600 was paid by cash.
8 Purchased vehicle parts from Nut’s Suppliers for R5 800 on a 30 day account.
11 Deposited R49 000 into the business bank account for services rendered.
16 Purchased Diagnostic equipment from MVE Suppliers for R40 000 on credit. Paid a

Deposit of R10 000. The balance will be paid in 6 equal monthly instalments beginning on 1 August 2023.

20 Moses withdrew R9 000 from the business bank account for his own personal use.
25 Paid salaries to the 2 employees hired on 2 June 2023.
27 Paid telephone account of R1 100 for June 2023.
29 Paid Nut’s Suppliers for the parts purchased on 8 June 2023. Received a settlement discount of 10% for early payment. (refer transaction 8 June).
30 Deposited R63 000 for services rendered to the value of R70 000. A 10% discount was allowed for cash payments.

Record the above transactions for the month ended 30 June 2023 through a table such as the one illustrated below. Simultaneously show the financial impact of the transaction on the accounting equation and the effect of the same transaction on the relevant accounts. The table is sensitive to + for increase and – or (brackets) for decreases.

Illustration of a transaction recorded in the recommended format of the required table:
Example transaction:
1 June 2023 Purchased a motor bike from Biker’s Bargain for R7 000 on credit.

Date Financial impact : Accounting equation Effect: Ledger accounts
June Assets Equity Liabilities Account debited Account credited
1 +7 000 0 +7 000 Motor vehicles Creditor: B B


Eric Ngidi the sole proprietor of a general dealer, Welcome Traders, provided you with the following relevant accounting records for the financial year ended 28 February 2023.

Pre-adjustment trial balance at 28 February 2023 Debit – R Credit – R
Land and buildings at cost 600 000  
Equipment at cost 135 000  
Accumulated depreciation: equipment   33 000
Fixed deposit: Bold Bank (12% per year) 60 000  
Accounts receivable (Debtors) 51 630  
Allowance for credit losses   2 850
Inventory: merchandise (Trade goods) 105 330  
Bank 20 220  
Capital: Ngidi   593 550
Drawings 130 500  
Long term borrowing: Rabada Finance (16% per year)   60 000
Accounts payable (Creditors)   74 400
Sales   844 500
Cost of sales 422 400  
Consumable expenses 2 400  
Sales returns 3 700  
Settlement discounts granted 2 300  
Salaries and wages 93 510  
Advertising 4 800  
Electricity and water 18 810  
Rates and Taxes 24 600  
Insurance 5 850  
Interest on long term borrowing 11 250  
Interest on fixed deposit   4 800
Rent income   79 200
  1 692 300 1 692 300

Additional information and adjustments:

1. Physical stocktake was done on 28 February 2023 and inventories were valued at cost as follows: Inventories: Merchandise (Trade goods) R103 500
Inventories: Consumable items R 300

2. Rates and taxes included a payment of R6 120 for the 6 month period 1 January 2023 to 30 June 2023.

3. The rent income for February 2023 is still outstanding. The monthly rent did not change for the period 1 March 2022 to 31 January 2023. However, the rent for February 2023 must be increased by 10% and recorded as outstanding at 28 February 2023.

4. A Debtor, A Noddy, who owed R1 200 was declared insolvent and his estate declared a payment of 60 cents in the Rand. The amount received was correctly recorded. However, the balance of the account must now be written off as a credit loss.

5. The allowance for credit losses must be adjusted to 5% of outstanding Debtors.

6. On 25 February 2023, an Electrical Fund Transfer (EFT) deposit of R2 250 was made by E Lucky, a debtor whose account was previously written off. No entries have been made.

7. Provide for depreciation of Equipment at 10% per year using the diminishing balance method. The purchase on 1 February 2023 of Equipment costing R45 000 has not yet been recorded.

8. The telephone account of R900 for February 2023, has not been recorded nor paid.

9. The fixed deposit at Bold Bank was made on 1 July 2022 and matures on 31 August 2023. Interest on the fixed deposit is received on a monthly basis.

10. A portion of the interest on the Long term borrowing has been paid in advance. The loan was obtained on 28 February 2022. Equal annual repayments of R15 000 will commence on
1 March 2023.

Prepare the statement of profit or loss and other comprehensive income for the financial year ended 28 February 2023 to comply with International Financial Reporting Standards (IFRS) appropriate to this entity and its type of business. Show all workings.

The annual financial statements of Bongo (Pty) Ltd are in the final stages of completion for the year ended 30 June 2023. The following information was extracted to prepare the statement of cash flows for the current financial year.

Bongo (Pty ) Ltd
Statement of financial position as at 30 June 2023 (with comparative values for 30 June 2022):



30 June 2023 R   30 June 2022


Equipment at carrying amount Inventory

Trade receivables


636 000

48 000

22 800

202 800

  324 000

45 600

27 600

120 000

Total Assets 909 600   517 200


Equity 636 000   348 000
Ordinary share capital

Retained earnings

396 000

240 000

  300 000

48 000




273 600


169 200

Long term borrowings Trade payables

Income received in advance SARS: Tax payable

186 000

25 200

26 400

36 000

  48 000

76 800

19 200

25 200


Total Equity and Liabilities

909 600   517 200

Additional Information:

1 Authorised share capital: 1 000 000 Ordinary shares

2 Issued share capital: 100 000 Ordinary shares were sold for cash during the current financial period.
3 Dividends of R30 000 were declared and paid on 20 June 2023.

4 Equipment with a carrying amount of R240 000 was sold and new equipment was purchased during the current financial year.

5 Bongo (Pty) Ltd raised a long term loan of R168 000 in May 2023.

6 The following information was extracted from the statement of comprehensive income for the year ended 30 June 2023:
• Sales for the year was R1 464 000
• Rental income was R26 400.
• Profit on disposal of equipment R36 000
• Depreciation R48 000
• Interest expense R50 400
• Income tax expense R147 600
• Profit after tax R222 000.


Prepare the statement of cash flows for Bongo (Pty) Ltd for the financial year ended
30 June 2023 in compliance with the requirements of the International Financial Reporting Standards (IFRS) in as much as the given information allows. Use the indirect method.

Success Limited registered with the CIPC and the Certificate of Commencement was issued on 1 July 2022. Authorised share capital was granted as follows:
• 900 000 Ordinary shares of R2 each, and
• 400 000 10% Preference shares of R5 each
The following transactions took place for the year ended 30 June 2023.


4 July

The Founders resolved to purchase 100 000 Ordinary shares at R2 each and

20 000 10% Preference shares at R5 each. The share certificates for the Ordinary shares and the 10% Preference Shares were issued to the Founders as agreed.

7 July Upon receipt of the share certificates, the Founders paid in full as resolved.
2 Sept The Company offered 100 000 Ordinary shares at R2 each to the public. The closing date for applications was 2 December 2023.
2 Dec Application for 110 000 ordinary shares were received from the public with their application monies and the regulatory application documents.
30 Dec Shares were allotted to successful applicants.

6 Jan

Unsuccessful applicants were refunded their application monies. The company

paid R7 300 in respect of share issue expenses.

1 May Ordinary dividends of 10 cents per share were declared by the Directors after approval by the shareholders at the annual general meeting. Dividends were

payable on 10 June 2023.

10 June Dividends due to shareholders were paid.
30 June Record the income tax expense that was calculated at R124 800 for the current financial year. Provisional tax payments have not been made.
30 June Record the closing entry at end of the financial year for the Share issue expenses of R7 300

Prepare general journal entries to record all the relevant transactions regarding the issue of shares during the current financial year ended 30 June 2023. Include general journal entries for the declaration and payment of dividends, the income tax expense, the payment of dividends as approved, and the year-end closing entry for the share issue expenses.
NB: You are required to also record the date and a short narration for each transaction

Answers on Above Questions on Financial Accounting

Answer 1: The financial impact of the transaction on the accounting equation and the effect of the same transaction on the relevant accounts is showed as follows:


Get completed answers on the questions above on financial accounting from the best accounting assignment help experts of Student Life Saviour.

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