Go bits (Pty) Ltd is a wholesaler and distributor of laptops to local stores. The company has a December financial year-end.

The following inventory transactions took place during November 2023. All purchases and sales are of the laptop:

Date

Transactions

Purchase / sales price per unit excluding VAT (Rand)

2 November 2023 7 November 2023 10 November 2023 15 November 2023

17 November 2023 21 November 2023

240 laptops purchased on credit

300 laptops purchased in cash

250 laptops sold on credit

20 laptops purchased on credit (refer to note 2)

200 laptops sold in cash

90 laptops purchased on credit (refer to note 2)

1 250 1 400 1 750 1 350

1 800 1 300

Note 1: Opening inventory and costl of sales

There were 115 laptops on hand on 1 November 2023 with a purchase price of R1 255 each, including VAT, before any discounts and additional costs. The cost price of the 115 laptops was paid for within 10 days of delivery and therefore re- ceived a 2% settlement discount (refer to note 2).

Additional costs are incurred by the company with each laptop purchased for resale These additional costs include:

Rand (including VAT)

Administration cost per unit 145 Transport cost per unit 115 Distribution cost per unit 52 Selling and marketing cost per unit 33 Storage cost per unit 22

Note 2: Settlement terms

The supplier of the laptops offers Go bits (Pty) Ltd a 2% settlement dis- count if payment is made within 10 days of delivery. The normal credit terms with the supplier are 30 days.

Go bits (Pty) Ltd has a payment history of paying the supplier within three days of the laptops being delivered. All purchases made during November 2023 were paid for within 10 days of delivery, except the purchases made on the 15th and 21st of November 2023.

The purchase made on the 15th of November 2023 is payable on 15th of June 2024. The prevailing interest rate on similar debt is 10% per annum. The purchase made on the 21st of November 2023 was paid for on the 3rd of December 2023.

Note 3: Additional information:

Value-added Tax (VAT) 15%

A stock count was conducted on the 30th of November 2023 and revealed the following stock items were on hand:

Laptop model Units

Pro-line V1 315

Computerworld (Pty) Ltd uses the perpetual system to record inventory movements

according to the first-in-first-

1.1) Calculate the revenue generated from the laptops sold during November 2023. (4 marks)

1.2) Discuss and calculate in terms of IAS 2 Inventories what the additional cost per laptop will be. Reasons to support your inclusion or exclusion of an amount should be provided.

(6 marks)

1.3) Calculate the cost price of the laptops sold on the 10th of November 2023. (15 marks)

1.4) Calculate the cost price of the laptops sold on the 17th of November 2023. (10 marks)

1.5) Prepare the general journal entries to account for all the laptops sold during the month of November 2023. Note: All the calculations performed in 1.1,1.3 and 1.4 will be used in your response.

Journal dates and narrations are not required.

(6 marks)

1.6) Prepare the general journal entries to account for the purchase of laptops made on the 15th of November 2023. Only general journal entries relating to the month of November 2023 are required.

Journal dates and narrations are not required.

(15 marks)

1.7) Due to a newer model of the Pro-line laptop being released on the 15th of December 2023, the current Pro-line V1 is being replaced by the V2. The Pro- line V1 can currently be sold, during November 2023, at R1 250 (excluding VAT) per unit with selling costs amounting to R150 (excluding VAT) per unit.

Calculate the closing stock value of laptops to be disclosed in the Statement of Financial Position of Go bits (Pty) Ltd on the 30th of November 2023. Note: You are not required to prepare the Statement of Financial Position