Samke Limited sells new equipment and repairs equipment for their regular customers. The following information was extracted from the accounting records for the financial year ended 30 June 2021 Extracted from the Pre-Adjustment Trial Balance at 30 June 2021: Fixed deposit 160 000 Inventory: Trade goods 219 800 Debtors control 39 090 Machinery 224 000 Accumulated depreciation: Machinery 130 000 Long term borrowing: Finhouse 281 200 Sales 1 680 000 Debtors allowances 17 000 Cost of sales 1 050 000 Service fee income (in respect of repair services) 297 140 Rent income 105 000 Interest income 11 200 Salaries and wages 294 640 Audit fees 30 000 Directors fees 230 000 Consumable stores 51 100 Bank charges 5 240 Travel and entertainment - Directors 15 910 2. Adjustments and additional information: The internal auditors have identified the following errors or omissions: 2.1 auditors are owed a further R28 000 in audit fees. 2.2 Bank charges of R310 reflected on the June 2021 bank statement have not yet been entered in the books. 2.3 The stock count on 30 June 2021 revealed the following on hand: • Inventory: Trade goods; R202 000 • Consumable stores; R900 2.4 The tenant paid the July and August rent in June 2021. The rent was increased by R700 per month on 1 January 2021. 2.5 Provide for depreciation on machinery at 10% p.a. on the diminishing-balance method. Note that new machinery costing R30 000 was purchased on 31 December 2020, (this was recorded correctly). 2.6 Interest on the loan was capitalised. The loan statement from Finhouse on 30 June 2021 reflects the following: FINHOUSE LOAN STATEMENT AT 30 JUNE 2021 Balance on 1 July 2020 R332 800 Interest charged ? Monthly instalments of R4 300 x 12 paid R 51 600 Balance on 30 June 2021 R326 000 The interest expense for the year has not yet been entered in the books. 2.7 A credit note issued to a debtor, S Moon, dated 28 June 2021 was not recorded in the books. The credit note was for price reduction on unsatisfactory repair of a piece of equipment, R540. 2.8 Assume a company tax rate of 30%. Required: Prepare a Statement of profit or loss and other comprehensive income for the year ended 30 June 2021 in compliance with International Financial Reporting Standards appropriate to Samke Ltd’s business activties.
Samke Limited sells new equipment and repairs equipment for their regular customers. The following information was extracted from the accounting records for the financial year ended 30 June 2021
Extracted from the Pre-Adjustment Trial Balance at 30 June 2021:
| Fixed deposit | 160 000 |
| Inventory: Trade goods | 219 800 |
| Debtors control | 39 090 |
| Machinery | 224 000 |
| Accumulated depreciation: Machinery | 130 000 |
| Long term borrowing: Finhouse | 281 200 |
| Sales | 1 680 000 |
| Debtors allowances | 17 000 |
| Cost of sales | 1 050 000 |
| Service fee income (in respect of repair services) | 297 140 |
| Rent income | 105 000 |
| Interest income | 11 200 |
| Salaries and wages | 294 640 |
| Audit fees | 30 000 |
| Directors fees | 230 000 |
| Consumable stores | 51 100 |
| Bank charges | 5 240 |
| Travel and entertainment - Directors | 15 910 |
2. Adjustments and additional information:
The internal auditors have identified the following errors or omissions:
2.1 auditors are owed a further R28 000 in audit fees.
2.2 Bank charges of R310 reflected on the June 2021 bank statement have not yet been entered in the books.
2.3 The stock count on 30 June 2021 revealed the following on hand:
• Inventory: Trade goods; R202 000
• Consumable stores; R900
2.4 The tenant paid the July and August rent in June 2021. The rent was increased by R700 per month on 1 January 2021.
2.5 Provide for depreciation on machinery at 10% p.a. on the diminishing-balance method. Note that new machinery costing R30 000 was purchased on 31 December 2020, (this was recorded correctly).
2.6 Interest on the loan was capitalised. The loan statement from Finhouse on 30 June 2021 reflects the following:
| FINHOUSE | |
| LOAN STATEMENT AT 30 JUNE 2021 | |
| Balance on 1 July 2020 | R332 800 |
| Interest charged | ? |
| Monthly instalments of R4 300 x 12 paid | R 51 600 |
| Balance on 30 June 2021 | R326 000 |
The interest expense for the year has not yet been entered in the books.
2.7 A credit note issued to a debtor, S Moon, dated 28 June 2021 was not recorded in the books. The credit note was for price reduction on unsatisfactory repair of a piece of equipment, R540.
2.8 Assume a company tax rate of 30%.
Required:
Prepare a Statement of profit or loss and other comprehensive income for the year ended 30 June 2021 in compliance with International Financial Reporting Standards appropriate to Samke Ltd’s business activties.
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