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Pure Traders
Pure Traders
The following balances and totals appeared in the accounting records of Pure Traders as at
28 February 2022, the end of the entity’s accounting period:
R
Capital ................................................................................................................................ 97 500
Drawings ............................................................................................................................ 30 450
Land and buildings ............................................................................................................. 107 826
Equipment .......................................................................................................................... 60 000
Vehicles .............................................................................................................................. 30 000
Accumulated depreciation: Equipment (1 March 2021) ....................................................... 6 000
Accumulated depreciation: Vehicles (1 March 2021) .......................................................... 10 800
Trade receivables control ................................................................................................... 15 000
Bank (Dr) ............................................................................................................................ 14 350
Trade payables control ....................................................................................................... 5 500
Cost of sales ....................................................................................................................... 200 000
Sales returns ...................................................................................................................... 1 500
Settlement discount granted ............................................................................................... 600
Water and electricity ........................................................................................................... 7 500
Telephone expenses .......................................................................................................... 5 000
Salaries .............................................................................................................................. 21 000
Insurance............................................................................................................................ 11 050
Stationery ........................................................................................................................... 2 500
Rental income..................................................................................................................... 45 500
Advertising.......................................................................................................................... 8 524
Additional information
No equipment or vehicles were purchased or sold during the current financial year.
REQUIRED:
a) Calculate the revenue (sales) amount of Pure Traders for the year ended 28 February 2022. (3½)
b) Prepare the statement of profit or loss and other comprehensive income of Pure Traders for the year
ended 28 February 2022. (24½)
SOLUTION
a) PURE TRADERS
CALCULATION:
Revenue
R
Sales
[(200 000 x 175/100) - 1 500 - 600] 347 900
(3½)
b) PURE TRADERS
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 28 FEBRUARY 2022
R R
Revenue 347 900
Cost of sales (200 000)
Gross profit 147 900
Other income 42 000
Rental Income (3 500 x 12) or (45 500 - 3 500) 42 000
189 900
Distribution, administration and other expenses (64 564)
Insurance (850 x 12) 10 200
Depreciation
Equipment: (60 000 x 10%) 6 000
Vehicle: [(30 000 - 10 800) x 20%] 3 840
Water and electricity 7 500
Telephone expenses 5 000
Salaries 21 000
Advertising 8 524
Stationery 2 500
Profit for the year 125 336
Other comprehensive income for the year -
Total comprehensive income for the year 125 336
(24½)