Question 1

Ms Minky is the owner of Minkies Ltd. The business specializes in buying and selling bottles of vegetable juice – “Vegy”. Minkies Ltd accounts for inventory using perpetual inventory system on the Fist-In First-Out (FIFO) basis. The business is NOT registered for VAT. Bottles of “Vegy” are sold at a mark-up of 80% on cost.

The following transactions occurred during June 2016:

1. On 1 June 2016, 110 bottles of Just marula juice were on hand and each bottle cost R150.
2. On 4 June 2016, Minkies Ltd purchased 390 bottles of Just marula juice at a total cost of R66 300. The business paid 75% of the total purchase price on 4
June 2016 and agreed to settle the balance on 29 June 2016.

3. On 15 June 2016, 80 bottles of Just marula juices were sold. 10% of the sales were on credit.
4. On 20 June 2016, the stock controller identified 25 bottles of vegy that will expire on 22 June 2016 and the other 5 bottles have an expiry date of December 2016. The owner, Ms Minky, decided to make a special sale on 21
June 2016 by reducing the normal selling price with 60%. All 25 bottles of the vegy relates to the opening inventory.
5. On 21 June 2016, only 15 bottles of vegy with an expiry date of 22 June 2016 were sold for cash.
6. On 22 June 2016, the owner decided to discard the remaining unsold bottles of vegy since these bottles reached their expiry date of 22 June 2016.
7. On 25 June 2016, 150 bottles of vegy were sold, for cash.

8. On 29 June 2016, Minkies Ltd settled the outstanding balance owed to the supplier.

Prepare the journal entries for the transaction 2 to 8 as they would 30 appear in the accounting records of Minkies Ltd.

Question 2

Didi Delivery is a business that provides delivery services. The business is NOT
registered for VAT. The year-end of Didi Delivery is 30 June.
The following information was extracted from the trial balance of Didi Delivery regarding delivery trucks as at 30 June 2022:

Extract from balances in general ledger on 01 July 2021 R

Delivery trucks at cost – 1/07/2021 1 500 000

Carrying amount – delivery trucks – 1/07/2021 1 080 000

It is the policy of the business to depreciate the delivery trucks over their useful lives of five (5) years, using the diminishing balance method with no residual values.

The following transactions regarding delivery trucks occurred during the 2022 reporting period:

1. To expand its operations, Didi Delivery, purchased the following delivery trucks:
a. The first truck was purchased on 31 October 2021 at a cost of R720 000 cash. The truck was available for use on t the date of purchase.

b. The second truck was purchased on 1 January 2022 at a cost of
R870 000.The truck was fully paid and available for use on 1 January
2. On 31 December 2021, Didi Delivery sold an old delivery truck for R600 000.
The delivery truck was originally purchased at a cost of R1 000 000 on 30
September 2019.

Prepare the note in respect of property, plant and equipment as it would 25
appear in the notes to the financial statement of Didi Delivery for the year ended 30 June 2022.
Present the balance of property, plant and equipment in the financial 5statements of Didi Delivery for the year ended 30 June 2022.

Answers to Above Questions on Financial Accounting

Answer 1: The journal entries for the transaction 2 to 8 as they would 30 appear in the accounting records of Minkies Ltd are presented below:


Get completed answers on the questions above on financial accounting from the accounting assignment help South Africa experts.

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