FAC1502 EXAM PACK
FINANCIAL ACCOUNTING PRINCIPLES, CONCEPTS & PROCEDURES
MAY – JUNE 2023
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SOLUTION 1: STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
(a) N & N ENTERPRISES
STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015
R
Revenue 500 000
Cost of Sales (362 800)
Opening Inventory 100 000
Purchases (283 000 + 39 000 – 5 000) 317 000
Freight charges on purchases 5 000
Shipping Fees 2 800
Import duties 3 300
Delivery Fees 4 100
Modification Costs 2 600
Closing Inventory (72 000)
Gross Profit 137 200
Other Income 2 860
Interest on fixed deposit (800 + 1 060) 1 860
Rental Income (2 400 * 5 / 12) 1 000
Total Income Less Expenses
140 060
(143 300)
Administrative, Distribution & Other Expenses
139 300
Insurance expenses (5 000 – 3 500)
1 500
30 000
76 800
1 400
9 600
2 600
7 400
10 000
Administration expenses
Salaries (76 000 + 800)
Depreciation (10 % * 14 000)
Municipal taxes
Credit losses
Advertising expenses (9 800 – 2 400)
Water, Electricity and telephone expenses
Finance Cost
Interest on mortgage (50 000 * 8%)
Loss for the year
Other Comprehensive Income
4 000
4 000
(3 240)
-
Total Comprehensive Income (3 240)
SOLUTION 2: DEBTORS` & CREDITORS` CONTROL ACCOUNTS
2.1 ZIZOBENZA TRADERS
GENERAL LEDGER
Date Details Folio Amount Date Details Folio Amount
R R
Debtors Control Account
2013 2013
Mar 1 Balance b/d 32 780 Mar 1 Balance b/d 1 780
31 Sales and VAT 31 Sales Returns and
(R16 840 – R2 736 SJ 14 104 VAT SRJ 1 200
Bank CPJ 3 200 Bank and
Sundry Debits GJ 2 760 Settlement
Creditors control- Discount CRJ 22 750
set off GJ 1 780 Sundry Credits
Creditors control- (R430 + R1 450) GJ 1 880
set off GJ 2 020 Balance c/d 29 034
Receipts 56 644 56 644
April 1 Balance b/d
29 034
NOTES
We start by entering the balances brought forwards. Debtors is an asset, therefore, the normal balance appears on the debit side. There can also be an abnormal credit balance in a bank account. This is whereby the business now owes it`s traditional customers. This can happen as examples when a customer mistakenly overpays, or returns goods after paying for them.
All transactions that increase what our customers owe us should be debited e.g. sales, interest charged on overdue accounts, dishonoured cheques, e.t.c, whilst the transactions which reduce our customers` debts should be credited e.g. payment by our customers, credit losses written off, returns by our customers, e.t.c.
Our sales and sales returns should be included inclusive of VAT because our customers are liable to paying us the total amount including VAT
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