COURSE: HOSPITALITY FINANCIAL MANAGEMENT 2

COURSE CODE: HFM 211

TOPIC: FINANCIAL STATEMENTS
LECTURER: DR O. MHLANGA

The following list of balances was taken from the books of GBAGBO HOTEL on 31 December
2010.

Sales R 64,750
Capital R 190,000
Sales returns R 1,500
Purchases R 31,900
Drawings R 16,500
Land and buildings R 81,000
Purchases returns R 3,000
Carriage on purchases R 2,750
Wages & Salaries R 22,100
Vehicles R 85,000
Accumulated depreciation on vehicles R 15,900
Equipment R 21,500
Accumulated depreciation on equipment R 2,175
Investments R 15,000
Trading Stock (1 January 2010) R 8,500
Commission received R 1,950
Debtors R 10,000
Provision for doubtful debts R 950
Cleaning Materials R 2,000
Bank R 2 300
Insurance R 1,600
Discount allowed R 750
Discount received R 1,125
Loan: TD Bank R 17,000
Rent received R 3,800
Sundry expenses R 9,600
Creditors R 12,150
Bad debts R 800

1
Additional Information:
1. Stock on hand as at 31 December 2010, R8200.
2. Rent, R400 for December 2010 has not been received yet.
3. Interest on investment of R1500 has not yet been received.
4. Wages owing for December 2010, R2400.
5. Insurance paid includes R350 for January 2011.
6. Unused cleaning material as at 31 December 2010, R100.
7. Depreciation must be written off as follows:
 Equipment - 20% using the declining balance method.
 Vehicles - 10% using the straight-line method.
Required:
1. A statement of comprehensive income for the year ended 31 December 2010 (20)
2. A statement of financial position at 31 December 2010. (20)