Question One

The following information relates to Stimulus Traders:

Balance at 31 December 2012R
Trading inventories on 01 January 201215 000
Trading inventories on 31 December 201212 000
Inventory of stationary on 31 December 20121 500
Sales166 000
Purchase90 000
Sales Returns3 000
Purchases Returns5 500
Freight on purchases3 000
Freight on sales10 000
Import duty1 000

Additional information:
The owner took goods worth R2 500 for personal use. This transaction had not been recorded.

Calculate Cost of Sales.
Calculate Gross Profit.

Question 2: 

The following information relates to ABC Pty Ltd, a business that manufactures electric products operating in Pretoria.

Statement of Financial Position Information as at 31 December 2015 and 2016

 2015 (R)2016 (R)
Ordinary Shares Capital (R1)400 000500 000
Preference Share Capital (R0.50)100 000100 000
Share Premium15 00017 500
Retained Earning25 000115 000
Long Term Loan from AB bank90 00060 000
Land and Buildings at cost300 000320 000
Machinery and Equipment at cost130 00080 000
Machinery and Equipment: Accumulated Depreciation43 00049 000
Fixed Deposits (at Standard bank)35 00050 000
Inventory31 00050 000
Trade Debtors40 00035 000
Bank (Dr)115 000
Petty Cash5 0005 000
Cash in Hand4 500
Trade Creditors18 00025 000
Bank Overdraft2 000
Income tax payable15 00013 000
Shareholders for dividends15 00025 000
Interest Payable5 0006 000

 Extract of items disclosed in the Statement of Comprehensive Income for the year ended 31 December 2016:

ItemAmount (R)
Interest Income from fixed deposits13 000
Depreciation Charge for the year29 000
Loss of sale of machinery and equipment1 500
Interest on long term loan14 000
Income tax expense47 000
Profit for the year90 500
Ordinary dividends20 000
Preference dividends6 000

Additional Information:
1) No machinery and equipment were purchasing during the financial year. Machinery and equipment were sold for R85 500 of which R45 500 was on still outstanding.
2) The new property which was acquired is situated at Site 100 Thabo Sehume, Pretoria. The company plans to use it as its warehousing sites.
3) Inventory is recorded at cost.
4) The shares issued in March 2016.

Prepare the Statement of Cash Flows for ABC Pty Ltd for the year ended 31 December 2016 in compliance with the requirements of GAAP as stipulated in IAS 7.

NB: Use the Indirect method. Comparative figures and notes are not required.

Question Three

The following information was extracted from the book of XY Ltd for the year 30 September 2016.
Extract of a Trial Balance as 30 September 2016

Sales1 312 500 
Cost of Sales475 120 
Commission 19 00
Rent70 000 
Salaries130 400 
Carriage on Sales50 000 
Carriage on Purchases40 000 
Bad debts20 000 
Electricity46 500 
Stationary102 400 
Land and Building700 000 
Shares on JSE17 050 
Debtors180 636 
Provision of bad debts 20 000
Bank8 000 
Petty Cash450 
Ordinary Share Capital 400 000
Share Premium 50 000
Retained Earnings- 1 October 2015 60 391
Long term loan 144 000
Creditors 103 026

Additional information:
1) An annual stock count at 30 September showed that the business had stock worth R15 150.
2) Write off a further R3 500 as bad debts.
3) Adjust the provision of bad debts to R23 500.
4) Profit for the year was R84 193.
5) Income tax was provided for as R52 576. It is a business for tax to be paid on the 1st of October each year.
6) Dividends declared were R5 000.

Prepare a Statement of Financial Position as at 30 September 2016.

Answers to Above Questions on Accounting

Answer 1: The calculation of cost of sales and gross profit of Stimulus Traders is performed as follows:


Get correct answers on all the above calculative questions from the accounting assignment helpers in South Africa at affordable prices.

Content Removal Request

If you believe that the content above belongs to you, and you don’t want it to be published anymore, then request for its removal by filling the details below. It will only be removed if you can provide sufficient evidence of its ownership.