Answered

Prepare the Adjusted Trial Balance

The following balances appeared in the Balance Sheet section of the ledger before any adjustments:
\begin{tabular}{|l|r|r|}
\hline & Debit & Credit \\
\hline Capital & 44,000 & 241,800 \\
\hline Drawings & 170,000 & \\
\hline Vehicle & 29,000 & \\
\hline Equipment & & 51,000 \\
\hline Accumulated depreciation on vehicle & 60,000 & 8,700 \\
\hline Accumulated depreciation on equipment & 24,000 & \\
\hline Fixed deposit - WB & 180,000 & \\
\hline Debtors control & 260,000 & \\
\hline Creditors control & & 1,000 \\
\hline Trading stock & 900 & \\
\hline Bank & & 100,000 \\
\hline Petty cash & & \\
\hline SA Revenue Services (PAYE) & & \\
\hline Loan from Kredietbank (13\% p.a.) & & \\
\hline
\end{tabular}

Adjustments and Additional Information:
1. Rhumb took stock of dresses for her personal use at cost price, R4,200. This has not been recorded.
2. A stock count at the year-end revealed dresses of R170.20 on hand.
3. A computer was purchased on credit on 31 December 20.4 for R8,000. This has not been recorded. The amount due will be paid in March 20.5.
4. Provide for depreciation as follows:
- On vehicles at 20% p.a. according to the diminishing balance method.
- On equipment at 15% p.a. on cost (fixed instalment method).

Note: The new equipment purchased on 31 December 20.4 must be taken into consideration.



Answer :

GinnyAnswer
Sure, let's go step-by-step through the question to adjust the balances and prepare the adjusted trial balance.

### Step 1: Record the additional information

1. Rhumb took stock for personal use at a cost of R4,200:
- This amount should reduce the Debtors Control and Drawings, as stock is being taken by the owner.

2. Year-end stock count indicates stock of R170.20 on hand:
- This will be our closing stock and should be added to Trading Stock.

3. A computer was purchased on credit for R8,000 and not yet recorded:
- This needs to be added to Equipment and Creditors Control.

4. Depreciation provision:
- Vehicles: 20% on the diminishing balance method.
- Equipment: 15% on the cost price.

### Step 2: Adjust for stock taken for personal use

[tex]\[ \text{Drawings (debit)} = 170,000 + 4,200 = 174,200 \][/tex]
[tex]\[ \text{Debtors Control (debit)} = 260,000 - 4,200 = 255,800 \][/tex]

### Step 3: Adjust for the end-of-year stock

[tex]\[ \text{Trading Stock (debit)} = 900 + 170.20 = 1,070.20 \][/tex]

### Step 4: Record the purchased computer on credit

[tex]\[ \text{Equipment (debit)} = 51,000 + 8,000 = 59,000 \][/tex]
[tex]\[ \text{Creditors Control (credit)} = 1,000 + 8,000 = 9,000 \][/tex]

### Step 5: Compute Depreciation

#### Vehicles' Depreciation (20% diminishing balance method)

[tex]\[ \text{Vehicle Book Value} = 29,000 - (60,000 - 8,700) = 29,000 - 51,300 = -22,300 \; (\text{Note here: the vehicle valuation indicates accumulated depreciation has exceeded vehicle cost, which suggests checking actual values}) \][/tex]

If we assume the initial value should be positive (likely a book entry error):

\[
\text{Assumed Vehicle Value Adjustment}, i.e., [tex]\( \text{Vehicle Debtor bal} \leave as 29,000 - 60,000 = 8,700 \)[/tex] instead
\[(Assumption variant for reasonable values, retaining initial 29,000)

\[
Depreciation = 8,700 \times 20/100 = 1,740

#### Equipment Depreciation (15% on cost)

\[
Depreciation = (59,000) 15/100 = 8,850

### Step 6: Prepare Adjusted Balances and List:

We make all necessary adjustments:

Cash Adjusted entries:
\[Capital (debit), initially reduced balance items at 44,000 not affect =\text {Sum transactions not altering repayments}
Fixed Deposits unchanged 180,000 ending receipt
Total (remaining non-influenced: Petty cash \& unsecured debtor: SARS results shown Nil movement} with ending Closed value to trading balance
Fixed deposit: Closing (Conforming entry tagged balancing no undisclosed liabilities to warrant)


Adjusted Final Balance Adjusted Value:
Debiting Sum-equity-sheet table - not changing probable ADded Margin/Sum Leveraged original ledger:

| Labels | Debit | Credit |
|------------------|------------|------------|
| Capital | 44,000 | 241,800 |
| Drawings | 174,200 | |
| Vehicles | 29 000 | |
| Equipment | 59000 | |
| Dep - vehicles | 61,740 | 8,700 |
| Dep - equipment | 24,850 | |
| Fixed deposit WB | 180000 | |
| Debtors control | 256800 | |
| Creditors control| | 9,000 |
| Trading stock | 1,070.20 | |
| Petty cash | | |
| Bank | | 100,000 |
| SARS PAYE | | |
| Loan from Krediet| 13% pa | |

Result Closing: Appropriate

This covers note inclusive rates
Completeled:

Reiterated Taken to Consolidated Sheet pending Final:

| Labels | Debit | Closing here-modifiers not engaged } *Assuming Further records review factors