Question 1:

The following information relates to Stimulus Traders:

Balance at 31 December 2012 R
Trading inventories on 01 January 2012 15 000
Trading inventories on 31 December 2012 12 000
Inventory of stationary on 31 December 2012 1 500
Sales 166 000
Purchase 90 000
Sales Returns 3 000
Purchases Returns 5 500
Freight on purchases 3 000
Freight on sales 10 000
Import duty 1 000

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

Required:
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) 400 000 500 000
Preference Share Capital (R0.50) 100 000 100 000
Share Premium 15 000 17 500
Retained Earning 25 000 115 000
Long Term Loan from AB bank 90 000 60 000
Land and Buildings at cost 300 000 320 000
Machinery and Equipment at cost 130 000 80 000
Machinery and Equipment: Accumulated Depreciation 43 000 49 000
Fixed Deposits (at Standard bank) 35 000 50 000
Inventory 31 000 50 000
Trade Debtors 40 000 35 000
Bank (Dr) 115 000
Petty Cash 5 000 5 000
Cash in Hand 4 500
Trade Creditors 18 000 25 000
Bank Overdraft 2 000
Income tax payable 15 000 13 000
Shareholders for dividends 15 000 25 000
Interest Payable 5 000 6 000

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

Item Amount (R)
Interest Income from fixed deposits 13 000
Depreciation Charge for the year 29 000
Loss of sale of machinery and equipment 1 500
Interest on long term loan 14 000
Income tax expense 47 000
Profit for the year 90 500
Ordinary dividends 20 000
Preference dividends 6 000

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.

Required:
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 3:

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

NOMIMAL SECTION Debit (R) Credit (R)
Sales 1 312 500  
Cost of Sales 475 120  
Commission   19 00
Rent 70 000  
Salaries 130 400  
Carriage on Sales 50 000  
Carriage on Purchases 40 000  
Bad debts 20 000  
Electricity 46 500  
Stationary 102 400  
BALANCE SHEET SECTION    
Land and Building 700 000  
Shares on JSE 17 050  
Debtors 180 636  
Provision of bad debts   20 000
Bank 8 000  
Petty Cash 450  
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.

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

NB: Notes are not required. The statement must be prepared in accordance with GAAP or IFRS.

Answers to Above Questions on Fundamentals of Accounting

Answer 1: The calculation of cost of sales using the formula below is performed as follows:

COGS = Opening Inventory + Purchases  – Closing Inventory

answer

Get completed answers on the above questions on fundamentals of accounting from the best accounting assignment writers of Student Life Saviour in South Africa.

 

 


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.