QUESTION 1                                                                                                       (2 MARKS)

State the IAS/IFRS equivalent for the term trading stock.

QUESTION 2                                                                                                          (25 Marks)

  1. (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 priceR 1 450,00
VAT on the cost price 
VAT inclusive cost price 
Mark- up % on cost price64%
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)

 
  1. (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.

DateTransaction
1The owner contributed an amount of R96 666 cash, as well as motor

vehicle valued at R56 666 to the business.

3Blue Traders purchased trading inventory for R22 666 on credit from

Golden Suppliers.

5The insurance premium of R5 714 was paid through the electronic funds

transfer (EFT).

9A cash sale amounting to R45 714 was made, the goods were originally

purchased at a cost of R24 285.

13Noble Traders settled their account with Golden Suppliers Suppliers in

full by cash.

15Sold goods on account to a customer, Mr. Bogus for R11 214. The

goods were originally purchased at a cost of R10 142.

18Purchased trading inventory amounting to R15 714 for cash.
19Purchased a building in cash for R107 142.
27Made electronic payments for the workers’ salaries and wages

amounting to R42 000.

28Received a payment of R11 200 from Mr. Bogus, a debtor.

Required:

  1. 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.

 

DateAccount DebitedAccount

Credited

Assets =Equity +Liabilities
e.g.Repairs and

maintenance✔

  -R11 000✔ 
  Bank ✔-R11 000✔  

 (Max 10 Marks)

Complete the following table

 

Mark up on costCost                 price

(Excl.VAT)

Profit (Excl.VAT)Selling             price

(Excl.VAT)

12%160??
27%??800
60%?1 200?
??6 40012 800
130%??3 520
  1. (12 Marks)

Solve the following independent problems and ignore VAT 

  1. If the gross margin on a product is 35%, what is the corresponding mark-up percentage? (3 Marks)
  2. 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)
  1. 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

 

DayVoucher noDetails of transactionTotal (VAT incl)
   RC
6PV9Stationary25000
9PV10Cool drinks for staff10000
10PV11Wages for casual workers John and David1 00000
12PV12Postage11400
16PV13Business breakfast with a client45000
23PV14Cash taken by the owner15000
26PV15Fuel40000
29PV16PTP Airtime Voucher22800

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.

answer

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