Prepare the Income Statement on 30 June 2020

Here is the Income Statement for Bonny Traders for the year ended 30 June 2020. Step 1: Calculate adjusted income and expense figures. Cost of Sales: Original Cost of Sales: R640 000 Less: Donated goods (Adjustment C): R1 800 R640\,000 - R1\,800 = R638\,200 Telephone Expense: Original Telephone: R24 300 Add: Accrued expense (Adjustment A): R3 100 R24\,300 + R3\,100 = R27\,400 Insurance Expense: Original Insurance: R18 600 Less: Prepaid portion of R1 320 (Adjustment B) for 9 months (July 2020 - March 2021) R18\,600 - (R1\,320 × (9)/(12)) = R18\,600 - R990 = R17\,610 Stationery Expense: Original Stationery: R13 400 Less: Stationery on hand (Adjustment D): R2 300 R13\,400 - R2\,300 = R11\,100 Bad Debts Expense: Original Bad Debts: R33 350 Add: Debtor written off (Adjustment E): R1 350 R33\,350 + R1\,350 = R34\,700 Rent Income: Rent received for 13 months: R40 250. Rent increased by R250 from 1 March 2020. Let x be the rent per month before 1 March 2020. Rent received for 13 months = (8 × x) + (4 × (x+250)) + (1 × (x+250)) 13x + R1\,250 = R40\,250 13x = R39\,000 x = R3\,000 Actual rent income for the year (12 months): (8 × R3\,000) + (4 × (R3\,000 + R250)) = R24\,000 + R13\,000 = R37\,000 Discount Allowed: Original Discount Allowed: R2 800 Less: Discount reversed due to dishonoured EFT (Adjustment G): R70 R2\,800 - R70 = R2\,730 Interest on Fixed Deposit: Fixed deposit: R90 000 at 9% p.a. from 1 October 2019 to 30 June 2020 (9 months). R90\,000 × 9\% × (9)/(12) = R6\,075 Depreciation: Vehicles: Old vehicles (R420 000 - R120 000): R300 000 at 20% p.a. New vehicle (R120 000) at 20% p.a. for 10 months (1 Sept 2019 - 30 June 2020). (R300\,000 × 20\%) + (R120\,000 × 20\% × (10)/(12)) = R60\,000 + R20\,000 = R80\,000 Depreciation: Equipment: R10 800 (Adjustment I) Donations: R1 800 (Adjustment C) Step 2: Prepare the Income Statement. BONNY TRADERS \\ INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2020 Sales &&& R960\,000 \\ Less: Cost of Sales &&& (R638\,200) \\ Gross Profit &&& R321\,800 \\ Other Operating Income \\ Discount received & R7\,560 \\ Rent income & R37\,000 \\ Total Other Operating Income &&& R44\,560 \\ Less: Operating Expenses \\ Debtors allowances & R22\,300 \\ Salaries & R102\,000 \\ Telephone & R27\,400 \\ Water and electricity & R12\,100 \\ Stationery & R11\,100 \\ Discount allowed & R2\,730 \\ Advertising & R25\,400 \\ Insurance & R17\,610 \\ Bad debts & R34\,700 \\ Donations & R1\,800 \\ Depreciation: Vehicles & R80\,000 \\ Depreciation: Equipment & R10\,800 \\ Total Operating Expenses &&& (R347\,940) \\ Operating Profit &&& R18\,420 \\ Interest Income \\ Interest on fixed deposit & R6\,075 \\ Interest Expense \\ Interest on loan & (R8\,400) \\ Net Profit &&& R16\,095 That's 2 down. 3 left today — send the next one.