QUESTION ONE                                        CLUBS                                                                 (20 MARKS)

The following information was obtained from the records of The Strength Club for the year ended 31 January 2024:

R

 

Depreciation 12 600
Salary paid to caretaker 144 000
Entrance fees received 13 500
Loan Repayment 45 000
Membership fees received 525 000
Refreshments purchased by cheque 22 500
Paid Honorarium to secretary 72 000
Cash purchase of stationery 7 500
Golf balls purchased by cheque 18 000
Donations received 28 500
Lawnmower purchased by cheque 60 000
Cash sale of refreshments 33 000
Membership fees written off 4 500
Cash balance on 31 January 2023 25 500

 REQUIRED:

Prepare the Statement of Receipts and Payments for the year ended 31 January 2024.

QUESTION      TWO              COMPANY FINANCIAL STATEMENT                       (20 MARKS)

 REQUIRED:

Prepare the Statement of Comprehensive Income of BRAIN LTD. for the year ended, 29 February 2024.

INFORMATION: 

EXTRACT FROM PRE-ADJUSTMENT TRIAL BALANCE ON 29 FEBRUARY 2024
Balance Sheet Accounts DEBIT CREDIT
Equipment 290 000  
Accumulated Depreciation equipment   80 500
Vehicle 480 000  
Accumulated depreciation vehicle   192 000
Inventory 755 800  
Provision for bad debts   6 530
Loan: Z.Bank [ 16 % p.a. ]   240 000
     
Nominal accounts    
Sales   5 678 000
Cost of Sales 2 468 000  
Debtors Allowances 18 000  
Fee income   90 500
Rent Expenses 84 360  
Salaries and Wages 900 000  
Insurance 48 000  
Water and Electricity 37 850  
Advertising 43 950  
Bank Charges 8 300  
Consumables 16 500  
Packaging 39 400  
Directors Fees 800 000  
Audit Fees 46 500  
Sundry Expenses 22 600  
Interest on loan 35 200  
Investment dividends   63 000
     

Adjustments and additional information:

 Adjust provision for Bad Debts to R5

  1. Rent for February 2024 has not yet been

NB: The monthly rent of R7 600 was increased by 10% with effect from 01 January 2024.

  1. Insurance includes an amount of R18 000 which was paid to cover the six months from 01 December 2023
  2. The February 2024 Bank Statement received revealed the following:
    • Service fees,
    • Cash deposit fees,
    • Credit card levies, R 70
    • Interest on overdraft, R120
  3. Provide for depreciation as follows:
    • On equipment at 15% on the diminishing balance
    • On Vehicles at 20% on
  4. Physical stocktaking on 29 February revealed the following on hand:
    • Trading Inventory, R743 900
    • Consumables, R3 200
  5. Provide for outstanding interest on
  6. Company tax as per legislation is 28%.

QUESTION THREE                                  CASH BUDGET                                                                (20 MARKS)

 Prepare the following from the projections supplied by MANDLA DISTRIBUTORS.

  • Debtors’ Collection
  • Cash Budget of MANDLA Distributors for the period January and February

INFORMATION:

 

Estimates and Projections 2024 2025
November December January February
Sales 500 000 600 000 650 000 700 000
Purchases 280 000 320 000 325 000 350 000
Salaries 75 000 75 000 ? ?
Rent expense 30 000 30 000 ? 34 500
Sundry Expenses 16 000 18 000 ? ?

 Additional Information:

 40% of the sales are on Cash customers receive a 5% discount.

  1. The credit sales are collected as follows:
    • 50% in the month of
    • 25% in the month after sale
    • 20% in the second month after sales
    • The balance is written
  2. All purchases are on Creditors are paid for the purchases in full in the month following the purchases.
  3. A fixed deposit of R40 000 plus 12% interest matures on 01 January
  4. Salaries will increase by 10% with effect from 01 January
  5. Rent expense will increase by 15% with effect from 01 February
  6. Sundry expenses are to be increased by 5% each month from

Answers to Above Questions on Financial Accounting

Answer 1:

answer

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