W7+Adjustments - FINANCIAL ACCOUNTING(ACC1006/1106F...

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FINANCIAL ACCOUNTING (ACC1006/1106F) TUTORIAL ACTIVITY: WEEK STARTING 11 APRIL 2011 Ozzie Olive imports olives grown in the Australian outback and sells them to South African restaurants. The year-end of the business is 30 April. You have been provided with the following information. Pre-Adjustment Trial Balance of Ozzie Olive (extract) as at 30 April 2009 DR CR Equipment 200 000 Accumulated depreciation – equipment ? Loan to staff member 250 000 Inventory 142 000 Trade receivables 145 000 Allowance for doubtful debts 2 400 Retained earnings 45 500 Drawings 28 000 Sales income 560 000 Cost of sales expense 240 000 Interest income ? Salaries expense 120 000 Rent expense ? Stationery expense 11 850 Additional information 1. All reversals were processed correctly on 1 May 2008. 2. On 1 February 2006, the business made a loan to a staff member. The terms of the loan were that it would be repaid in 8 equal annual instalments, beginning on 1 February 2007, and that interest would be paid to the business every 4 months in arrears, on 31 January, 31 May, and 30 September, at a rate of 10% p.a. All interest amounts have been received on the due date. The bookkeeper records all interest receipts as interest income. 3. All equipment was purchased on 1 January 2005. After installation and safety tests had been performed, the equipment was ready for use on 1 February 2005. As the labour force was striking
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