Answered

Engage with knowledgeable experts and get accurate answers on IDNLearn.com. Ask your questions and receive reliable, detailed answers from our dedicated community of experts.

Grade 10 Accounting

ACTIVITY 2 (Statement of Financial Position)
(40 marks; 35 minutes)

You are provided with information relating to Hawy Traders as of 28 February 2019. The business is owned by Harry Way.

REQUIRED:
Prepare the Statement of Financial Position as of 28 February 2019.
NOTE: Show workings in brackets as no notes are required.

INFORMATION:

Extract from the Post-Adjustment Trial Balance of Hawy Traders on 28 February 2019

Additional Information on 28 February 2019:

A. The owner, H. Way, returned stock with a cost price of R5,000 that he previously took for personal use. No entry was made for this transaction.

B. The fixed deposit at Vodacom Bank includes an amount of R30,000 which will mature on 31 August 2019.

C. The loan statement received from MTN Bank revealed R25,000 interest for the year. Interest must be capitalised.

Note: An amount of R55,000 is payable on the loan on 30 June 2019.

Sagot :

GinnyAnsweridn
### Statement of Financial Position for Hawy Traders as at 28 February 2019

Let's proceed step-by-step through the information provided and prepare the Statement of Financial Position.

#### 1. Stock Returned by Owner
H. Way returned stock worth R5,000. This increases the stock available for the business.

#### 2. Fixed Deposit
The Fixed Deposit includes R30,000 that will mature on 31 August 2019. We'll list this amount separately under the "Fixed Deposit" section.

#### 3. Loan and Interest
The loan statement revealed R25,000 interest for the year. This interest needs to be capitalized (added) to the principal amount of the loan.
- Initial amount payable by 30 June 2019 = R55,000
- Add: Interest to be capitalized = R25,000

Loan Payable after capitalizing interest = R55,000 + R25,000 = R80,000

### Now, let’s compile this information into the Statement of Financial Position.

#### Assets
1. Current Assets
- Stock: R5,000

2. Non-Current Assets
- Fixed Deposit: R30,000

#### Liabilities
1. Non-Current Liabilities
- Loan Payable: R80,000

### Statement of Financial Position
```plaintext
Hawy Traders
Statement of Financial Position as at 28 February 2019

Assets
------
Current Assets:
Stock R5,000
--------
Total Current Assets R5,000

Non-Current Assets:
Fixed Deposit R30,000
--------
Total Non-Current Assets R30,000
--------
Total Assets R35,000
--------

Equity and Liabilities
----------------------
Non-Current Liabilities:
Loan Payable R80,000
--------
Total Liabilities R80,000
--------

Total Equity and Liabilities R80,000
--------
```

### Summary of Workings:
#### Workings:
1. Stock:
- Returned stock by owner: R5,000

2. Fixed Deposit:
- Amount maturing on 31 August 2019: R30,000

3. Loan Payable:
- Amount payable on loan by 30 June 2019: R55,000
- Interest to be capitalized: R25,000
- Loan Payable = R55,000 + R25,000 = R80,000

And that's how we prepare the Statement of Financial Position with the given information.
Thank you for using this platform to share and learn. Keep asking and answering. We appreciate every contribution you make. Trust IDNLearn.com for all your queries. We appreciate your visit and hope to assist you again soon.