Prepare the general journal entry to record the adjustment.(4 marks)

The following balances, amongst others, appeared in the pre-adjustment trial balance of GH Stores on 28
February 2023, the end of the financial year:

Debtors control R40 000
Provision for bad debts R1 800

The provision for bad debts must be adjusted to 5% of debtors.


Prepare the correct Creditors Control account (balanced) for March 2023. (8 marks)
The following transactions of ABC Traders have been recorded for March 2023:

Amount owed to creditors on 01 March 2023 R70 000
Credit purchases for the month R88 000
Cash purchases for the month R48 000
Goods returned to creditors R4 000
Payments to creditors R80 000

Additional information to record:
■ A creditor’s account with a credit balance of R300 in the creditors ledger must be transferred to the account of the same creditor in the debtors ledger.
■ A credit note received from a creditor for a return of goods was not recorded, R400.
■ A payment to a creditor (included in the R80 000 above) was recorded as R5 500 instead of R5 000 in the cash payments journal and posted accordingly.
■ ABC Traders was charged interest for one month at 18% per annum on an overdue account of R3 000.

Use the information provided below to calculate the gross profit for the financial year ended 28 February 2023. (4 marks)
The following balances/totals, amongst others, appeared in the trial balance of Supra Stores on 28 February 2023, the end of the financial year:

Inventory (on 01 March 2022) 120 000
Sales 940 000
Sales returns 12 000
Purchases 680 000
Purchases returns 20 000
Carriage on purchases 15 000
Carriage on sales 22 000

Additional information
Stocktaking on 28 February 2023 revealed an inventory figure of R222 000 at cost price. 1.4 (4 marks)
The following information was extracted from the books of Samke Stores on 31 August 2023 for the only product that it sells.

August Transaction Units of inventory Price per unit
01 Opening inventory 11 000 R10
13 Purchased from a supplier 32 000 R11
24 Purchased from a supplier 7 000 R12
31 Sales for August 45 000 R20

QUESTION 2 (20 Marks)

Show the effect of the following transactions of Algoa Stores on the Accounting equation. Use “+” to denote an increase, “–” to denote a decrease and “0” to denote no change to the elements of the equation. Follow
the example given. Assume that the bank balance is always favourable. (5 marks) Example: Paid for electricity by means of an electronic funds transfer (EFT), R800

No. Assets = Equity + Liabilities
e.g. –R800   –R800   0

2.1.1 Purchased a printer on credit, R10 000.
2.1.2 Received R2 000 cash from a debtor in part settlement of her account of R4 500.
2.1.3 The proprietor deposited cash to increase her capital contribution from R70 000 to R100 000.
2.1.4 Made a payment to a creditor in part settlement of account, R4 000.
2.1.5 Received rent of R3 000 from the tenant.


Use the information provided below to post to the following accounts in the general ledger. Balance or close
off the accounts.
2.2.1 Vehicles (4 marks)
2.2.2 Accumulated depreciation on vehicles (6 marks)
2.2.3 Fixed asset realisation (5 marks)

On 01 March 2022, the beginning of the financial year, the following balances (amongst others) appeared in the general ledger of Ascot Traders:

Vehicles R900 000
Accumulated depreciation on vehicles R380 000

■ A motor vehicle that cost R200 000 was sold for R52 000 cash on 31 August 2022. The accumulated depreciation on the vehicle amounted to R120 000 on 01 March 2022. Depreciation is calculated at 20% per annum using the fixed instalment method.
■ On 01 September 2022 a new vehicle was purchased for R300 000 cash to replace the vehicle that
was sold.
■ Provide for depreciation on vehicles for the year ended 28 February 2023.

QUESTION 3 (20 Marks)

Use the information provided below to prepare the correct:
3.1 Debtors control account for October 2023. Balance the account. (10 marks)
3.2 Debtors List as at 31 October 2023. (10 marks)
The inexperienced bookkeeper of Tunisia Suppliers found that the balance in the Debtors Control account did not correspond with the total of the Debtors List. Upon investigation, some errors and omissions were discovered.

Date Details Fol Amount Date Details Fol Amount
2023       2023      
Oct 01 Balance b/d 444 120 Oct 31 Bank and discount CRJ 465 000
31 Sales SJ 501 600   Sales returns SRJ 26 400
          Interest income GJ 1 080
          Balance c/d 453 240
      945 720       945 720
Nov 01 Balance b/d 453 240        
Debtor Debit (R) Credit (R)
Cantona 131 000  
Dlamini 152 000  
Khoza 138 000  
Peter 10 000  
Roopan 2 400  
  433 400 0

The following errors and omissions were discovered after the above were drawn up:
1. One entry appears on the incorrect side of the Debtors Control account.
2. The Sales Journal was overcast by R10 000.
3. A receipt issued to Khoza in part payment of account, R20 000, was erroneously posted to the account
of Peter in the Debtors ledger.

4. The account of Roopan must be written off.
5. No entry was made in the books for goods returned by Cantona, R4 000.
6. An invoice for goods sold on credit to Dlamini was erroneously credited to the account of Dlamini in the
Debtors ledger, R6 000.

QUESTION 4 (20 Marks)

Prepare the Statement of Changes in Equity of Sinclair Traders for the year ended 28 February 2023.
The information given below was extracted from the accounting records of Sinclair Traders, a partnership business with Sindy and Claire as partners.

Extract from the ledger of Sinclair Traders as at 28 February 2023
  Debit Credit
  R R
Capital: Sindy   1 000 000
Capital: Claire   600 000
Current a/c: Sindy (01 March 2022)   60 000
Current a/c: Claire (01 March 2022) 50 000  
Drawings: Sindy 250 000  
Drawings: Claire 350 000  

The following must be considered:
(a) The net profit for the year, according to the Profit and Loss account, amounted to R1 000 000.
(b) The partners are entitled to interest at 15% per annum on their capital balances. On 01 December 2022
Sindy increased her capital by R200 000 whilst Claire decreased her capital by R200 000. The capital changes have been recorded.
(c) The partners are entitled to the following monthly salaries:
Sindy R15 000
Claire R18 000
(d) Claire is entitled to a bonus equal to 5% of the net profit before taking any of the above appropriations
into account.
(e) The balance of the profit must be shared between Sindy and Claire in the ratio of the capital balances
as at the beginning of the financial year.

QUESTION 5 (20 Marks)
Use the information provided below to prepare the Statement of Financial Position of Umbilo Traders as at 28 February 2023. The Statement of Comprehensive Income and notes to the financial statements are not required. The workings or adjustments made to the accounts must be shown in the appropriate column provided.
The trial balance and additional information given below were extracted from the accounting records of Umbilo Traders on 28 February 2023, the end of the financial year.

  Debit (R) Credit (R)
Balance sheet accounts section    
Capital   3 834 200
Drawings 897 400  
Vehicles at cost 3 700 000  
Equipment at cost 2 730 000  
Accumulated depreciation on vehicles   1 560 000
Accumulated depreciation on equipment   1 092 000
Fixed deposit: Namib Bank (10% p.a.) 584 000  
Trading inventory 325 000  
Debtors control 377 200  
Provision for bad debts   29 200
Bank 256 400  
Petty cash 2 000  
Creditors control   541 600
Loan: Namib Bank (15% p.a.)   960 000
Nominal accounts section    
Sales   7 288 000
Cost of sales 3 290 000  
Sales returns 148 000  
Salaries and wages 1 696 000  
Bad debts recovered   8 000
Commission income   527 800
Rent expense 598 000  
Motor expenses 390 000  
Advertising 250 000  
Telephone 172 000  
Electricity and water 198 000  
Bank charges 32 000  
Insurance 28 000  
Interest on mortgage loan 108 000  
Interest on fixed deposit   29 200
Stationery 88 000  
  15 870 000 15 870 000

Adjustments and additional information
1. On 28 February 2023 an amount of R20 000 was received from Weimer Distributors for commission
on goods sold for them. No entry was made for this transaction.
2. Trading inventory according to stocktaking on 28 February 2023 amounted to R315 000.
3. Stationery valued at R4 000 was donated to a pre-school. This was not recorded.
4. Interest on fixed deposit has been received until 31 August 2022. Provide for the outstanding interest.
The fixed deposit matures on 01 March 2025. Interest is not capitalised.
5. Provide for the outstanding interest on loan. The loan was obtained from Namib Bank on 01 March 2022 and repayments will only commence from March 2023. An amount of R180 000 (excluding interest) is expected to be paid during the financial year ended 28 February 2024. Interest is not
6. Included in the insurance total is an amount of R12 000 that was paid for fire insurance for the period
01 December 2022 to 30 November 2023.
7. The water and electricity account for February 2023 was due to be paid on 02 March 2023, R25 000.
8. Rent has been paid for the period 01 March 2022 to 31 March 2023. The rental amount was unchanged
during this period.
9. The bank statement for February 2023 reflected an amount of R3 600 for bank charges. No entry was
made for this.
10. No entry has been made for an account of R30 000 received from Sigma Motors for the repairs to two
11. Write off the account of a debtor who was declared insolvent, R13 000.
12. The provision for bad debts must be decreased by R9 000.
13. Provide for depreciation as follows:
13.1 On vehicles at 20% per annum on the diminishing balance.
13.2 On equipment at 10% per annum on cost.
14. The net profit for the year ended 28 February 2023 AFTER taking the above adjustments and additional information into account was R149 600.

Answers to Above Questions on Financial Accounting

Answer 1: The gross profit for the financial year ended 28 February 2023 is calculated as follows:


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

Content Removal Request

If you believe that the content above belongs to you, and you don’t want it to be published anymore, then request for its removal by filling the details below. It will only be removed if you can provide sufficient evidence of its ownership.