Reference no: EM132666212

ZZ Muller is the proprietor of PG Stores. He commenced trading on 01 March 2017. At the end of the second year of trading, his bookkeeper resigned unexpectedly and Mr Muller found that the financial statements for the year ended 28 February 2019 were incomplete. He requires your assistance in completing them. The pre-adjustment trial balance, adjustments and additional information that were extracted from the accounting records as at 28 February 2019 are presented below.

1. No entry was made for trading inventory that was taken by the proprietor for his personal use,

2. Inventories on 28 February 2019 according to physical stocktaking were as follows:

2.1 Trading inventory R135 000

2.2 Stationery R2 000

3. The telephone account of R1 000 for February 2019 was erroneously paid twice, on 25 February 2019 and 27 February 2019.

4. Rent has been received up to 31 January 2019.

5. A debtor, P. Peter, was declared insolvent. On 28 February 2019, his insolvent estate paid a first and final dividend of 60 cents in the Rand. An amount of R1 800 was received and recorded. The balance of his account must now be written off.

6. The provision for bad debts must be increased by R1 000.

7. The insurance total includes an amount of R7 200 that was paid for the period 01 November 2018 to 31 October 2019.

8. Interest on loan for February 2019 has not yet been paid. Interest is not capitalised.

Note: A repayment of R18 000 (excluding interest) is expected to be made in March 2019 to reduce the loan balance.

9. Depreciation must be brought into account each year as follows:

9.1 On vehicles at 20% per annum using the diminishing balance method.

9.2 On equipment at 15% per annum on cost. Note: Equipment with a cost price of R20 000 was purchased and recorded on 01 December 2018.

Problem 1: How to complete the financial statements (that appear after the adjustments and additional information) with the missing amounts and details. Where applicable, show your workings in brackets. Note: The notes to the financial statements and Statement Of Changes In Equity are not required.