1 Analyse the above adjustments under the following headings: 10.12.2 Indicate the amounts to be shown in the Post-Adjustment Trial Balance in respect of the following: (a) Rent income (b) Commission income (c) Interest on fixed deposit (d) Depreciation

TASK 10.12 The financial year ends on 31 December 20.1. 10.12.1 Analyse the above adjustments under the following headings: | No. | Account debit | Account credit | Effect on Assets | Effect on Owner's equity | Liabilities | | :-- | :------------------------------------------ | :---------------------------------------------- | :--------------- | :----------------------- | :---------- | | (i) | Fixed Deposit (R1 875) | Interest on Fixed Deposit (R1 875) | Increase | Increase | No effect | | (ii) | Rent Income (R1 970) | Rent Received in Advance (R1 970) | No effect | Decrease | Increase | | (iii) | Commission Income (R1 410) | Commission Received in Advance (R1 410) | No effect | Decrease | Increase | | (iv) | Depreciation (R54 500) | Accumulated Depreciation: Vehicles (R45 000) | Decrease | Decrease | No effect | | | | Accumulated Depreciation: Equipment (R9 500) | | | | Calculations for 10.12.1: Adjustment (i) - Interest on Fixed Deposit: Investment 1 (1 July 20.1): R30\,000 × 12.5\% × (6)/(12) = R1\,875 Investment 2 (31 Dec 20.1): R30\,000 × 12.5\% × (0)/(12) = R0 Total Interest = R1\,875 Adjustment (ii) - Rent Income: Let monthly rent (July-Nov) be X. Rent (Dec & Jan 20.2) is X + R150. Total rent received (Trial Balance) = R13 040. This includes 5 months at X, 1 month at (X+150) for Dec 20.1, and 1 month at (X+150) for Jan 20.2 (received in advance). R13\,040 = (5 × X) + (X + R150) + (X + R150) R13\,040 = 7X + R300 7X = R13\,040 - R300 = R12\,740 X = (R12\,740)/(7) = R1\,820 Rent for Jan 20.2 (received in advance) = R1\,820 + R150 = R1\,970 Adjustment (iii) - Commission Income: Commission received in advance for 20.2 = R1 410. Adjustment (iv) - Depreciation: Vehicles: R180\,000 × 25\% = R45\,000 Equipment: Original equipment (R50 000 - R10 000) = R40 000 for 12 months: R40\,000 × 20\% = R8\,000 Additional equipment (R10 000) bought 31 March 20.1 (9 months): R10\,000 × 20\% × (9)/(12) = R1\,500 Total Equipment Depreciation = R8\,000 + R1\,500 = R9\,500 Total Depreciation = R45\,000 + R9\,500 = R54\,500 10.12.2 Indicate the amounts to be shown in the Post-Adjustment Trial Balance in respect of the following: a) Rent income Trial Balance: R13 040 (Credit) Less: Rent received in advance (Adjustment ii): R1 970 (Debit) Post-adjustment amount: R13\,040 - R1\,970 = R11\,070 b) Commission income Trial Balance: R45 000 (Credit) Less: Commission received in advance (Adjustment iii): R1 410 (Debit) Post-adjustment amount: R45\,000 - R1\,410 = R43\,590 c) Interest on fixed deposit This is an income account. Interest earned (Adjustment i): R1 875 (Credit) Post-adjustment amount: R1\,875 d) Depreciation This is an expense account. Total depreciation for the year (Adjustment iv): R54 500 (Debit) Post-adjustment amount: R54\,500 All done for today! Send me the next one 📸