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QUESTION 1 ( 3 9 marks ) CampMore ( Pty ) Ltd is a company with a 3 0 June year - end. CampMore (
QUESTION marks CampMore Pty Ltd is a company with a June yearend. CampMore Pty Ltds main business is to manufacture and sell tents. CampMore Pty Ltd also, as an added extra, sells gazebos that fit their tent range. Due to capacity constraints, CampMore Pty Ltd does not manufacture the gazebos inhouse but rather purchases completed gazebos from the thirdparty manufacturer to sell as inventory. Tent manufacturing Below is an extract from the trial balance of CampMore Pty Ltd for the June yearend, which the entity is in the process of finalising. R Purchases raw materials components Labour costs hourly paid employees Factory staff Administration and selling staff Salaries and commissions Factory staff Administrative and sales staff Depreciation plant and machinery Depreciation office equipment The normal capacity at CampMore Pty Ltds factory is tents per year. Due to various factors, CampMore Pty Ltds actual production for the June financial year was of normal production capacity. ANNEXURE I: FORMATIVE ASSESSMENT HFACJanJunFACPV Inventories relating to tent manufacturing as at June: R R Raw materials cost price Work in progress cost price Note Finished goods cost price Note Note Work in progress of CampMore Pty Ltd has not been finalised for the June financial yearend. The production records indicate that of the current years allocated production expenditure labour salaries and depreciation costs and materials used relate to tents that were still under production at the yearend. Note The production records indicate that of the current years allocated production expenditure labour salaries and depreciation costs and materials used relate to tents that are finished and still on hand at yearend. Gazebos Completed gazebos are purchased from a third party on an asneeded basis. CampMore Pty Ltd purchased the following from a third party during the financial year: Date Number of gazebos Cost per gazebo July R September R November R January R March R May R CampMore Pty Ltd had gazebos with a cost of R per gazebo on hand on July and CampMore Pty Ltd had gazebos on hand on June ANNEXURE I: FORMATIVE ASSESSMENT HFACJanJunFACPV While the yearend stock take was performed, it was noted that CampMore Pty Ltd had gazebos on hand, which links to an older tent model. CampMore Pty Ltd no longer manufactures or sells this older tent model and in order to sell these gazebos they would need to be modified to fit the current tent model that CampMore Pty Ltd manufactures. These gazebos can be modified at a cost of R per gazebo. CampMore Pty Ltd will then be able to sell these gazebos for R each, while all other gazebos are sold for R each. Additional information: CampMore Pty Ltd makes use of a periodic inventory recording system. CampMore Pty Ltd values raw materials, work in progress, and finished goods relating to the manufactured tents on a firstinout basis FIFO There were no raw material spillages with the manufacturing process during the year. CampMore Pty Ltd values the gazebos on a weighted average costing basis WAC REQUIRED: Prepare an extract from the Statement of Profit or Loss and Other Comprehensive Income of CampMore Pty Ltd for the year ended June to show the cost of sales relating to the Tent manufacturing only. Comparative figures are not required. Prepare an extract from the statement of financial position of CampMore Pty Ltd as at June to ahow the Gazebos inventory only for the year ended June Comparative figures are not required
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