Reference no: EM132613589

The following information relates to the trial balance of ITC on 28 February 2020 Dr N$ Cr N$

Capital 66 100

Drawings 16 000 Vehicles (at cost price) 100 000 Equipment (at cost price) 40,000

Accumulated depreciation on vehicles 36,000

Accumulated depreciation on equipment 8 000 Loan:

FNB 20,000

Fixed deposit:

FNB 15,000

Accounts receivable ,200

Trading inventory - 1 March 2019 10,000

Accounts payable 4,100

Sales 250,000

Purchases 153,600

Carriage on purchases 4,200

Carriage on sales 550

Rent expense 15,600

Stationery 3,800

Insurance 4,800

Rates and taxes 350

Credit losses 400

Telephone 1,980

Water and electricity 15,100

Commission received 180

Rent income 2,200 386 580 386 580

Adjustments:

1. A physical stocktaking at 28 February 2020 showed the following:

Trading inventory N$17 800

Stationery on hand N$200.

2. Depreciation must be provided for as follows: Vehicles - 20% per annum on the cost price Equipment - 10% per annum on reducing balance method.

3. The loan from FNB was obtained on 31 December 2019. Interest was payable at the end of each six months at 15% per annum. As yet no interest has been paid.

4. An additional amount of N$200 must be written off as irrecoverable.

5. A fixed deposit was made on 1 September 2019. The interest rate amounted to 10% per annum. As yet no interest has been received.

6. Insurance included an amount of N$1 800 in respect of additional insurance taken out and paid for the period 1 January 2020 to 31 December 2020.

7. Rental income of N$200 was received in advance.

Required

Question 1: Draw up a Statement of Profit or Loss for the year ended 28 February 2020

Question 2: Draw up a Statement of Financial Position as at 28 February 2020.