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
- 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.
- Insurance includes an amount of R18 000 which was paid to cover the six months from 01 December 2023
- The February 2024 Bank Statement received revealed the following:
- Service fees,
- Cash deposit fees,
- Credit card levies, R 70
- Interest on overdraft, R120
- Provide for depreciation as follows:
- On equipment at 15% on the diminishing balance
- On Vehicles at 20% on
- Physical stocktaking on 29 February revealed the following on hand:
- Trading Inventory, R743 900
- Consumables, R3 200
- Provide for outstanding interest on
- 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.
- 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
- All purchases are on Creditors are paid for the purchases in full in the month following the purchases.
- A fixed deposit of R40 000 plus 12% interest matures on 01 January
- Salaries will increase by 10% with effect from 01 January
- Rent expense will increase by 15% with effect from 01 February
- Sundry expenses are to be increased by 5% each month from
Answers to Above Questions on Financial Accounting
Answer 1:
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