Question

The following list of Balances was extracted from the books of BG Trading Limited at 30 June 2006 after the closing entries had been passed.Trade creditors 137 883Stock Provision for income tax (balance due) Provision for bad debts 16 % mortgage debentures Land and buildings at cost Debentures interest accrued 699 715 2004 20 997 400 000 600 000 16 000 300 000 198 000 100 000 396 400 1 500 000 163 715 Goodwill at cost General reserve Furniture at cost less depreciation Debtors Ordinary share capital Retained income Additional information: 1. The cash book balance had been omitted 2. A dividend of 10% has been declared but no entries have yet been made. 3. The authorized capital of the company is R100 000 ordinary shares of R2 each. The ors have unrestricted power to issue the unissued shares as they deem fit before 31 March 2007 4. Stock at 30 June 2006 has been valued at the lower of cost or net realizable value. The basis was consistent with that used in previous years. 5. The furniture on hand at 30 June 2006 was purchased on 1 July 2004. Depreciation is calculated at 10% per annum according to the fixed instalment method. 6. The debentures were issued in units of R100 and are redeemable at the premium of 5% on 30 June 2006. 7. Land and buildings consist of office and shop premises on site number 178, Evertal, purchased on 3 August 1996 for R600 000.
8. Debtors include an amount of R16 400 lent to a director. The loan was made on 17 June 2006 and no repayments have yet been made. The loan was for the purchase of a car to be used mainly for the company's business, and was properly authorized

Required: Prepare the balance sheet confirming to generally accepted accounting practice and the provisions of the Companies Act. Ignore comparative figures and the funds statement

Answer 1