This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
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It looks like you've sent the same image again. This image contains a worked solution for a trading stock surplus, followed by Task 10.18 (which we've already completed). I'll explain the worked solution for the Trading Stock Surplus shown in the image. Solution: Trading Stock Surplus This solution demonstrates how to account for a trading stock surplus, which occurs when the physical count of stock is higher than the book balance. Information from the image: Book Balance (before adjustment): R78 300 Physical Count (implied by final balance): R80 000 Trading Stock Surplus: R80 000 - R78 300 = R1 700 General Journal Entry - February 20.2 The journal entry records the increase in trading stock and the recognition of the surplus as income. | J/V | D | Details | Fol | Debit | Credit | | :-- | :- | :------------------ | :-- | :---- | :----- | | 1 | 28 | Trading Stock | B7 | 1 700 | | | | | Trading Stock Surplus | N15 | | 1 700 | | | | Trading stock surplus as identified by physical count | | | | Debit Trading Stock (B7) R1 700: This increases the asset account for trading stock to reflect the actual amount on hand. Credit Trading Stock Surplus (N15) R1 700: This recognizes the surplus as an income, as the business has more stock than expected. General Ledger of Calc Traders (a) Trading Stock Account (B7) | Dr | 20.2 | | B7 | Cr | | :---------- | :------- | :-------- | :----- | :----- | | Feb 28 | Balance | b/d | 78 300 | Feb 28 | Balance | c/d | 80 000 | | Feb 28 | Trading Stock Surplus | GJ1 | 1 700 | | | | | | | | | 80 000 | | | | 80 000 | | Mar 1 | Balance | b/d | 80 000 | | | | | The opening balance of R78 300 is debited. The R1 700 surplus from the General Journal is debited, increasing the stock. The account is balanced, showing a closing balance of R80 000, which becomes the opening balance for the next period. (b) Trading Stock Surplus Account (N15) | Dr | 20.2 | | N15 | Cr | | :---------- | :------- | :-------- | :------ | :----- | | | | | | Feb 28 | Trading Stock | GJ1 | 1 700 | | | | | | | | | | The R1 700 surplus from the General Journal is credited, recognizing it as income. This account will typically be closed off to the Profit and Loss account at year-end. Effect of the adjustment entry on the Accounting equation | | ASSETS | = | OWNER'S EQUITY | + | LIABILITIES | | :---------- | :-------- | :- | :------------- | :- | :---------- | | Adjustment | + R1 700 | = | + R1 700 | + | R0 | Assets: Trading Stock (an asset) increases by R1 700. Owner's Equity: Trading Stock Surplus is an income, which increases profit and therefore increases Owner's Equity by R1 700. Liabilities: There is no effect on liabilities. To continue with Task 10.27, I still need the details from Task 10.22 (Caxio Supplies). Please send that image when you're ready!