MEMO FOR ACTIVITY 3

L LAILA AND Z ZANELE

LAZEN TRADERS
INCOME STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2015
Note R
Sales (1 875 800 – 15 500) 1 860 300
Cost of sales (685 000) (685 000)
Gross profit 1 175 300
Other operating income 111 038
Rent income (118 400 – 17 600) 100 800
Discount received 3 600 6 600
Profit on sale of assets (18 000 + 14 000 – 30 000) 2 000
Bad debts recovered 1 500
Provision for bad debts adjustment 138

Gross operating income 1 286 338

Operating expenses (448 308)
Stationery (8 500 – 500) 8 000
Packing material (9 603) 9 603
Salaries and wages (188 400 + 10 000) 198 400
Bad debts (4 500 + 400) 4 900
Discount allowed (3 200) 3 200
Insurance (80 400 – 13 200) 67 200
Water and electricity (42 600 + 1 400) 44 000
Sundry expenses (21 300) 21 300
Trading stock deficit (126 500 – 121 000) 5 500
Depreciation (50 000 + 30 000) 80 000
Repairs to building 4 000
Pension fund contributions 1 125
Medical Aid contributions 980
UIF contributions 100

Operating profit (loss) 838 030

Interest income 1 7 500
Profit (loss) before interest expense 845 530
Interest expense 2 (45 000)
800 530
Net profit (loss) for the year
L LAILA AND Z ZANELE
LAZEN TRADERS
BALANCE SHEET AT 28 FEBRUARY 2015
Note R
ASSETS

NON-CURRENT ASSETS 1 898 000

Fixed / Tangible assets 3 1 798 000
Financial assets – Fixed Deposit 100 000 100 000

CURRENT ASSETS 292 535

Inventories 4 121 500
Trade & other receivables 5 71 038
Cash & cash equivalents 6 99 997

TOTAL ASSETS 2 190 535

EQUITY & LIABILITIES

OWNER’S EQUITY 1 859 530

Capital 7 1 500 000
Current accounts 8 359 530

NON-CURRENT LIABILITIES 60 000

Loan from GP Bank 180 000 – 120 000 60 000
Loan from

CURRENT LIABILITIES 271 005

Trade & other payables 8 151 005
Bank overdraft
Current portion of loan (NB could be placed in Note 8) 120 000

TOTAL EQUITY & LIABILITIES 2 190 535

3 FIXED/TANGIBLE ASSETS Land & Vehicles Equipment Total
buildings
Carrying value beginning of year 1 300 000 500 000 94 000 1 894 000
Cost 1 300 000 680 000 150 000 2 130 000
Accumulated depreciation (180 000) (56 000) (236 000)

Movement
Additions
Disposals at carrying value *(16 000) (16 000)
Depreciation (50 000) (30 000) (80 000)

Carrying value at end of year 1 300 000 450 000 48 000 1 798 000
Cost 1 300 000 680 000 **120 000 2 100 000
Accumulated depreciation (230 000) ***(72 000) (302 000)
*R30 000 – R14 000 ** R150 000 – R30 000 = R120 000
= R16 000 *** R56 000 + R30 000 – R14 000
= R72 000
4 INVENTORIES
Trading stock 126 500 – 5 500 121 000
Consumable stores on hand 500 500
121 500

5 TRADE & OTHER RECEIVABLES

Trade debtors 56 000 – 400 55 600
Provision for bad debts 1 800 – 138 (1 662)
Net trade debtors 53 938
Expenses prepaid 13 200
Income accrued (receivable) 3 900 3 900
Deposit for water and electricity
71 038

6 CASH & CASH EQUIVALENTS

Fixed deposit (maturing within 12 months)
Savings account
Bank 80 497 + 1 500 + 18 000 99 997
Cash float
Petty Cash
99 997

7 CAPITAL ACCOUNTS L LAILA Z ZANELE Total

Balance at beginning of year 900 000 600 000 1 500 000
Contributions of capital during the year
Withdrawal of capital during the year
Balance at end of year 900 000 600 000 1 500 000
8 CURRENT ACCOUNTS L LAILA Z ZANELE Total
Net profit as per Income Statement 431 318 369 212 800 530
Partners’ salaries 240 000 240 000 480 000
Interest on capital 90 000 60 000 150 000
Partners’ bonuses 5 000 5 000 10 000
Primary distribution of profit 335 000 305 000 640 000
Final distribution of profit 96 318 64 212 160 530
Drawings for the year (288 000) (272 500) (560 500)
Undrawn profits for the year 143 318 96 712 240 030
Balance at beginning of year 125 000 (5 500) 119 500

Balance at end of year 268 318 91 212 359 530

9 TRADE & OTHER PAYABLES

Trade creditors 119 800 119 800.
Expenses accrued (payable) 1 400
Income received in advance (deferred) 17 600
Creditors for salaries 10 000 – 1 800 – 750 – 980 – 100 6 370
Pension Fund 7,5% X R10 000 = 750 + 1 125 1 875
Medical Fund 980 + 980 1 960
South African Revenue Services(PAYE) 18% X R10 000 1 800
UIF 1% X R10 000 = 100 + 100 200

151 005
.