l balance, additional information and adjustments given below were extracted from the records of Metro Limited

Question 3 
Prepare the Statement of Comprehensive Income for the year ended 28 February 2022.
INFORMATION
The trial balance, additional information and adjustments given below were extracted from the records of Metro Limited
for the financial year ended 28 February 2022.
METRO LIMITED
PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2022
Debit (R) Credit (R)
Balance sheet accounts section
Ordinary share capital 2 200 000
Retained earnings 608 000
Land and buildings at cost 2 300 000
Equipment at cost 1 060 000
Vehicles at cost 880 000
Accumulated depreciation on equipment 440 000
Accumulated depreciation on vehicles 220 000
Trading inventory 210 000
Debtors control 265 000
Provision for bad debts 15 000
Bank overdraft 70 000

Creditors control 325 000
Loan: Ria Bank (18% p.a.) 250 000
South African Revenue Services (Company tax) 130 000
Nominal accounts section
Sales 4 580 000
Cost of sales 1 980 000
Sales returns 130 000
Advertising 140 000
Stationery 50 000
Bad debts 15 000
Discount allowed 20 000
Discount received 16 000
Electricity and water 180 000
Telephone 90 000
Interest on overdraft 1 000
Directors’ fees 240 000
Audit fees 60 000
Insurance 32 000
Salaries 950 000
Bank charges 13 000
Rent income 112 000

Municipal rates 90 000
8 836 000 8 836 000
ADDITIONAL INFORMATION AND ADJUSTMENTS
1. According to physical stocktaking, the following were on hand on 28 February 2022:
1.1 Trading inventory R200 000
1.2 Stationery R3 000
2. Advertising includes a payment of R6 000 for six advertisements at R1 000 each that will be published monthly
from January 2022 and June 2022.
3. Part of the building has been let to a tenant since 01 March 2020. Rent has been received up to 31 January
2022. Note: The rental increased by 10% on 01 December 2021.
4. On 28 February 2022 an amount of R1 200 was received from a debtor who was only able to pay 60% of his
debt. The balance of his account must be written off. No entries were made for these transactions.
5. The provision for bad debts must be increased to R18 000.
6. Directors’ fees amount to R21 000 per month. Make the necessary adjustment.
7. The loan from Ria Bank was obtained on 01 February 2022. Provide for the outstanding interest on loan.
8. A notice from the municipality indicated that the municipal rates for the year ended 28 February 2022 was
calculated at R50 per R1 000 of the value of the land and buildings. Make the necessary adjustment.
9. Provide for depreciation as follows:
9.1 On vehicles at 20% per year using the diminishing balance method.
9.2 On equipment, R106 000.
10. Based on the taxable income of the company, an amount of R6 114 is owed by the tax authority (South African
Revenue Services) to Metro Limited for company tax.