Financial Reporting and Analysis Memo ()

FINANCIAL REPORTING AND ANALYSIS
APRIL 2021

MEMORANDUM




PREPARED BY: MTHOMBENI
0767297208

, QUESTION 1 (20)


1.1 True
1.2 True
1.3 True
1.4 True
1.5 False

1.6 A
1.7 D
1.8 B
1.9 B
1.10 C



QUESTION 2 (20)

Embassy Traders
Statement of Comprehensive Income as at: 28 February 2021
Sales (2075000-15000) 2060000
Cost of sales (795 000)
Gross profit 1265000

Other operating incomes 159 400
Rent income (171600-13200) 158400
Provision for bad debt adjustment 1000
Gross operating income 1 424 400
Operating expenses (1 020 100)
Wages and salaries 586 000
Bad debts (18000+2000) 20000
Stationery (30000-4000) 26000
Rates and taxes (58000-5000) 53000
Motor expenses 32 000
Advertising (23000-3000) 20000
Telephone 44 000
Electricity and water (66000+7000) 73000
Bank charges (8000+500) 8500
Insurance (5000+3000) 8000
Donation 1 000
Trading stock deficit (152000-148000-1000) 3000
Depreciation on equipment 66200
Depreciation on vehicles 79400

Operating profit 404 300
Interest income (15000+3000) 18000
Interest expense (26000+3700) (29700)

Net profit for the year 392 600

1