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My first view answers

1. 4
2. 3
3. 4
4. 1

5.4
6.?
7.2 (1st assgn:Q18)
8.1
9.3

Hi Tuswan,

So you agree with the first 4?

I agree with 5 - 9...

6. 3 - See image (I translated from my afrikaans notes so please excuse the language)

10. 3
11. 2
12. 3
( I have no idea which inventory system to use if you use the Periodic one you get 1 because the 15 000 DeliveryCost is not included in the Cost.
13. 2
14. 3
15. 4

Hi Charmaine

Q1.4 Agrre
Q2.3 (1st assingment ques: 16)

Q3 please can you show work-outs

Q4 Agree

Ohhh I see now coz my problem I did'nt debit dishounerd check I just left it out ,that why my balance 7155

Thanks

tuswan wrote:

Q3 please can you show work-outs


3. 4

1. CPJ
2. General Journal
3. Purchasing J
4. PJ
5/6. Purchase returns Journal
7. CPJ

Phurchasing Journal
Date -- Creditor -- Purchases -- CreditorsControl
3-------Unirama---- 560.00-------560.00
4-------Sarama------600.00-------600.00
-----------------------1160.00---------------

3. 700 x 20% = 140
700 - 140 = 560

Tuswan what do you think of my answers for 10-15?

Anyone who wants to participate?

Hi Charmaine,

Recently joined the site and I would like to compare answers – Never done accounting before and really struggling.

Please see my comments and questions in red below. (Apologies if I am completely off track – just trying to make sense of it all. )

1. 4 Please explain – I get option 2. (p32, bullet point 3 – “Realisable value is the amount of cash (or cash equivalent) that will be received currently if the asset is sold in an ordinary disposal. Liabilities are shown as the amount of cash that will be required to settle the amount currently”) Am I then correct in understanding it as follows:
Assets:
Inventory (March 10) = 15000
Inventory (Feb 11) = 22 500
Cash sales = 30 000
Debtors = 15000
TOTAL = 82 500
Liabilities:
Purchases = 30 000
Credit Sales = 45 000
TOTAL = 7500

Thus, 82500 – 75000 = 7500 profit???

2. 3 Agree (180+1600-120-100-100+200=1660)
3. 4 Would this not be option 1 = R1000? 1660 – 160 already paid to Unirama?
1. CPJ
2. General Journal
3. Purchasing J
4. PJ
5/6. Purchase returns Journal
7. CPJ

Phurchasing Journal
Date -- Creditor -- Purchases -- CreditorsControl
3-------Unirama---- 560.00-------560.00
4-------Sarama------600.00-------600.00
-----------------------1160.00---------------

3. 700 x 20% = 140
700 - 140 = 560

4. 1 Please explain – Try as I may, I cannot seem to get to an option provided.
5.4 Please explain how you go to this option.
6.3 - See image (I translated from my afrikaans notes so please excuse the language) Agree
7.2 (1st assgn:Q18) Agree
8.1 Please explain
9.3 Agree – please explain what the R75 credit is on the income statement?
10. 3 Please explain how you go to this option.

That is as far as I got this morning – I will have a look at the rest over the next couple of days and get back to you.

Hope to hear from you.

Thanks in advance.

Hi Emerald,

Will work through them one by one.

1. 4 Please explain – I get option 2. (p32, bullet point 3 – “Realisable value is the amount of cash (or cash equivalent) that will be received currently if the asset is sold in an ordinary disposal. Liabilities are shown as the amount of cash that will be required to settle the amount currently”) Am I then correct in understanding it as follows:
Assets:
Inventory (March 10) = 15000
Inventory (Feb 11) = 22 500
Cash sales = 30 000
Debtors = 15000
TOTAL = 82 500
Liabilities:
Purchases = 30 000
Credit Sales = 45 000
TOTAL = 7500

To get the gross profit, you have to do the Statement of Comprehensive Income.
The Income Statement consist of :
Revenue - Cost of Sales = Gross Profit
Gross Profit - Extra expences + Other Income =Net Profit
See Attached image for the Statement of Comprehensive Income

3. 4 Would this not be option 1 = R1000? 1660 – 160 already paid to Unirama?
1. CPJ
2. General Journal
3. Purchasing J
4. PJ
5/6. Purchase returns Journal
7. CPJ

No they ask what is the amount that has to be booked from the Purchase Journal to the Purchase Account in the General Ledger.
The only column in the Purchase Journal booked over to Purchase Account is the Purchase Column.

The 160 will be booked to the General Ledger from the Purchase Returns Journal.

4. 1 Please explain – Try as I may, I cannot seem to get to an option provided.

Okay this is the mistakes they say they made:

1. Sales Journal - is R100 less than it should be. Therefore another R100 must be Debited (added) to Debitorscontrol.

2. A invoice of R110 was posted to the SalesJournal as R101.
R110 - R101 = R9.00
Therefore the Sales Account is R9 less than it should be. Another R9 must be Debited (added) to Debitorscontrol.

3. This affects the Debitors personal account and not the Debitorscontrol. It was only posted wrongly to the Debitors personal account.

4. Debitor paid his account fully. R205 - R200 = R5 that still needs to be credited in the debitorscntrol.

Remember DebitorsControl Account in General Ledger = Debitors List in Debitors Ledger.

5.4 Please explain how you go to this option.

(a) Personal Account of Debitor.

(b) Sales Journal Total
3917 - 3467 = 450 (That still needs to be added)

(c) R45 Credited to Debitorscontrol as R54. Note that Interest should be debited and not credited. Therefore 45 + 54 must be debited to cancel out the R45 wrongly credited and add the R54 that needs to be debited.

8.1 Please explain
Will get back to you


9.3 Agree – please explain what the R75 credit is on the income statement?

(i)
Credited Losses DT - R300
Debitorscontrol CT - R300

Debitors = 12 800 - 300 = 12 500
Credit Losses = 500 + 300 = 800

(ii)
Allowance = 12 500 x 5% = 625
700 - 625 = 75 (too much)

Allowance for Credit Losses DT - 75
Credit Losses (Serves as income because the Allowance is more than it should be) CT - 75

Therefore in the Statement of comprehensive Income the Extra 75 for Allowance will be added as an Income. (Credited)

10. 3 Please explain how you go to this option
Will get back to you

I need some clarification please. Refering to questions 10 and 12. Where does it state that we need to add the 'railage' (distribution / transport costs) to the total inventory once calculated? All info I have points to NOT to add it.

Lets discuss this please as I currently do not agree with adding it.

Hi Charmaine.

Thanks so much for explaining - much appreciated.
Silly mistakes like that that might cost me my exams!

Here are the rest of my answers:

11. 2 I get option 3 (R1 112). Working backwards:( e) Cheque amounting to R120 entered into the cash book as R102. Thus difference of R18.
(ii) R1 050 - R18 = R1032 + (d) R200 deposit - (c) R250 cheque - (b) R20 bank charges + (a) R150 error = R1 112
Have I done my calculations wrong? Wasn't 100% sure what to do with (e). Please explain your answer.

12. 3 ( I have no idea which inventory system to use if you use the Periodic one you get 1 because the 15 000 DeliveryCost is not included in the Cost.
Agree with Annemie on this one - I also get option 2 (R23750).
Total sales = R 637500 (R450000 + R187500)
50% of R 450000 = R 300000 + 100% of R 187500 = R93750
Total cost of sales = R 393750
Purchases + Railage on Purchases + Railage on Sales + Inventory 2010) = R417500
Thus, 2011 Inventory = R23750 (R41 500 - R393750)
Comments?

13. 2 Agreed. Annemie - If you look at the question they ask for an option "to the nearest R1" - so it's option 2.
1 April 2009 to 30 June 2011 = 2 years and 3 months
Cost Price = R 30 000
Selling Price = R 12 500
R 30 000 - 25% (1 April 2009 to 1 April 2010) = R 7 500. R 30 000 - R 7 500 = R 22 500
R 22 500 - 25% (1 April 2010 to 1 April 2011) = R 5 625. R 22 500 - R 5 625 = R 16 875
R 16 875 - 25% of 3/12 months = R 1054.687 R 16 875 - R 1055 = R 15 820
Lost = R 3 320


14. 3 Agree

15. 4 Annemie & Charmaine - Could you both please explain how you got to your answers? I can't seem to total to any of the options. I must be doing something wrong with my calculations.

16.???? PLEASE HELP!!!! I keep getting different answers... None of which they provide though.

This is as far as I got this morning... ran out of time. Will have a look at the rest tonight or tomorrow morning.

Thanks Guys!

Have a great day.

Annemie

Q 6) 4 PLEASE explain!!!! why the R250 needs to be dr (it has nothing to do with Debtors??) and how does Bills fit in?

There is nothing debited in the amount of R250. If you're taking about the R150... At the end of the question they give totals that was posted in the General Journal and ofcaurse if Debitorscontrol was posted in GJ it must go to the general ledgers account.
Say you buy equipment on Credit - that goes to the General ledger and then needs to be posted to Debtor's in the General ledger.

Bills receivable must be Credit in Debitorscontrol and Debited to Bills Receivable account in General ledger. Page 225 of Textbook

Q 7) 5

Why do you say 7 is 5?

Q 8) 2
Sales - Cost of Sales (Purchases + Inventory on hand 19.4 - Purchases returns + carages on sales + customs) -Inventory on hand 19.5
R 300 000 - ( R 295 000) - R 55 000
R 300 000 - R 240 000 = R 600 00
R60000/R 300 000 X 100 = 20%

You do not include carriage on sales with sales. Carriage on sales is a expense and shoould be deducted from the Gross Profit to get the Net Profit for the Year. See Page 231 of Studyguide Exercise 2... They do not use the Carriage on sales to work out Gross profit. Carriage on purchases is included.

Will explain rest in a bit.

Please feel free to respond on my replies.

JacquesP wrote:
I need some clarification please. Refering to questions 10 and 12. Where does it state that we need to add the 'railage' (distribution / transport costs) to the total inventory once calculated? All info I have points to NOT to add it.

Lets discuss this please as I currently do not agree with adding it.

Hi,

I did not add the Carriage on Sales with my Sales. Please see image attached.