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Here's the solution for Task 10.18: TASK 10.18 Eppy Stores: Trading stock deficit First, calculate the trading stock deficit: Book Balance = R35\,120 Physical Count = R34\,540 Trading Stock Deficit = R35\,120 - R34\,540 = R580 10.18.1 Draft the relevant journal entry to adjust the Trading stock account. GENERAL JOURNAL - FEBRUARY 20.1 | J/V | D | Details | Fol | Debit | Credit | | :-- | :- | :------------------ | :-- | :---- | :----- | | 1 | 28 | Trading Stock Deficit | N16 | 580 | | | | | Trading Stock | B7 | | 580 | | | | Trading stock deficit as identified by physical count | | | | 10.18.2 Post to the following accounts in the General Ledger: (a) Trading Stock Account | Dr | 20.1 | | B7 | Cr | | :---------- | :------- | :-------- | :----- | :----- | | Feb 28 | Balance | b/d | 35 120 | Feb 28 | Trading Stock Deficit | GJ1 | 580 | | | | | | Feb 28 | Balance | c/d | 34 540 | | | | | 35 120 | | | | 35 120 | | Mar 1 | Balance | b/d | 34 540 | | | | | (b) Trading Stock Deficit Account | Dr | 20.1 | | N16 | Cr | | :---------- | :------- | :-------- | :------ | :----- | | Feb 28 | Trading Stock | GJ1 | 580 | | | | | | | Feb 28 | Balance | c/d | 580 | | | | | 580 | | | | 580 | | Mar 1 | Balance | b/d | 580 | | | | | 10.18.3 Show the effect of the adjustment entry on the Accounting equation. | | ASSETS | = | OWNER'S EQUITY | + | LIABILITIES | | :---------- | :-------- | :- | :------------- | :- | :---------- | | Adjustment | - R580 | = | - R580 | + | R0 | Assets: Trading Stock (an asset) decreases by R580. Owner's Equity: Trading Stock Deficit is an expense, which reduces profit and therefore decreases Owner's Equity by R580. Liabilities: There is no effect on liabilities. That's 2 down. 3 left today — send the next one.