QUESTION 1 (2 MARKS)
State the IAS/IFRS equivalent for the term trading stock.
QUESTION 2 (25 Marks)
- (15 Marks)
Complete the following table. The fictional scenario below refers to Alpha Traders a yoghurt manufacturing entity. Assume a VAT rate of 15%. The following information is in relation to a pack of one of their yoghurt flavours
| VAT exclusive cost price | R 1 450,00 |
| VAT on the cost price | |
| VAT inclusive cost price | |
| Mark- up % on cost price | 64% |
| VAT exclusive selling price | |
| VAT on the selling price | |
| VAT inclusive selling price | |
| Gross profit earned (indicate amount in Rands value) | |
| Gross margin attained (show answer as percentage to tow
decimal places) |
- (10 Marks)
Complete the following table
| VAT exclusive price (R) | VAT AMOUNT ( R) | VAT inclusive price (R) |
| 703.12 | ? | ? |
| ? | ? | 14 405,04 |
| 192,80 | ? | ? |
| ? | ? | 3 440 |
| ? | 33,60 | ? |
| 480 | ? | ? |
| ? | 5 571,39 | ? |
| 1 089,2 | ? | ? |
| ? | 94,4 | ? |
QUESTION 3 (48 MARKS)
You have been presented with the following information for Blue Traders that transpired during the month of February 2023. Ignore VAT. The business uses the perpetual inventory method.
| Date | Transaction |
| 1 | The owner contributed an amount of R96 666 cash, as well as motor
vehicle valued at R56 666 to the business. |
| 3 | Blue Traders purchased trading inventory for R22 666 on credit from
Golden Suppliers. |
| 5 | The insurance premium of R5 714 was paid through the electronic funds
transfer (EFT). |
| 9 | A cash sale amounting to R45 714 was made, the goods were originally
purchased at a cost of R24 285. |
| 13 | Noble Traders settled their account with Golden Suppliers Suppliers in
full by cash. |
| 15 | Sold goods on account to a customer, Mr. Bogus for R11 214. The
goods were originally purchased at a cost of R10 142. |
| 18 | Purchased trading inventory amounting to R15 714 for cash. |
| 19 | Purchased a building in cash for R107 142. |
| 27 | Made electronic payments for the workers’ salaries and wages
amounting to R42 000. |
| 28 | Received a payment of R11 200 from Mr. Bogus, a debtor. |
Required:
- Show the effects of the transactions incurred by Blue Traders during the month of February 2023 on the accounting equation. Clearly indicate which account needs to be debited or credited and answer this question by using the format of the table provided on the next (26 Marks)
Example: Paid for repairs and maintenance amounting to R11 000 cash.
| Date | Account Debited | Account
Credited |
Assets = | Equity + | Liabilities |
| e.g. | Repairs and
maintenance✔ |
-R11 000✔ | |||
| Bank ✔ | -R11 000✔ |
(Max 10 Marks)
Complete the following table
| Mark up on cost | Cost price
(Excl.VAT) |
Profit (Excl.VAT) | Selling price
(Excl.VAT) |
| 12% | 160 | ? | ? |
| 27% | ? | ? | 800 |
| 60% | ? | 1 200 | ? |
| ? | ? | 6 400 | 12 800 |
| 130% | ? | ? | 3 520 |
- (12 Marks)
Solve the following independent problems and ignore VAT
- If the gross margin on a product is 35%, what is the corresponding mark-up percentage? (3 Marks)
- If the gross margin on a product is 60%, what is the corresponding mark-up percentage? (3 Marks)
- If the mark up percentage on a product is 60%, what is the corresponding gross margin? (3 Marks)
- If the mark up percentage on a product is 280%, what is the corresponding gross margin ? (3 Marks)
QUESTION 4 (25 MARKS)
The following table shows a list of petty cash vouchers of Candles and Crafts for the month of January 2023
January 2023: List of petty cash vouchers
| Day | Voucher no | Details of transaction | Total (VAT incl) | |
| R | C | |||
| 6 | PV9 | Stationary | 250 | 00 |
| 9 | PV10 | Cool drinks for staff | 100 | 00 |
| 10 | PV11 | Wages for casual workers John and David | 1 000 | 00 |
| 12 | PV12 | Postage | 114 | 00 |
| 16 | PV13 | Business breakfast with a client | 450 | 00 |
| 23 | PV14 | Cash taken by the owner | 150 | 00 |
| 26 | PV15 | Fuel | 400 | 00 |
| 29 | PV16 | PTP Airtime Voucher | 228 | 00 |
Required:
Create the petty cash journal (PCJ3) for Candles and Crafts. (NOTE: assume a VAT rate of15% and round your answer to two decimals).
Get completed answers on bookkeeping to trial balance
Answer 1: The IAS/IFRS equivalent for the term trading stock is inventory. The concept of inventory is defined as the goods that are available with a company for sale in their ordinary course of business.
Get completed answers on bookkeeping and accounting subject as offered by the accounting assignment help South Africa experts of Student Life Saviour.
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