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QUESTION 1 ( 4 4 marks ) EVE Ltd is a local shop that sells tablecloths and napkins to clients. The company is not registered
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EVE Ltd is a local shop that sells tablecloths and napkins to clients. The company is
not registered for VAT and all transactions are in cash.
EVE Ltd uses the perpetual inventory recording system for tablecloths and the periodic
inventory recording system for napkins. Tablecloths are measured using the Firstin
firstout basis, and napkins using the weighted average method.
All tablecloths are sold at a markup of on the cost price and napkins at a mark
up percentage of on the selling price.
The following transactions occurred during the year ended December in the
order indicated and have not been accounted for:
The results of the inventory count on December indicated the following:
Tablecloths units on hand uniform unit price of R each
Napkins R
Receive tablecloths back that were consignment stock at a local caf They
initially took these tablecloths on December
In January EVE Ltd bought napkins and received a discount. The price
before the discount was R
EVE Ltd donated tablecloths to the local coffee shop. The cost price of these
tablecloths is R each.
EVE Ltd sold tablecloths with a total selling price of R
EVE Ltd bought napkins with a purchase price of R and incurred a delivery
fee of R
EVE Ltd sold napkins with a selling price of REVE Ltd bought tablecloths from a new supplier at a price of R per
tablecloth. EVE Ltd paid R for the tablecloths to be delivered.
The owner took tablecloths and napkins to the value of R to give as a
birthday gift to her sister.
EVE Ltd donated napkins, with a cost price of R to the local school.
EVE Ltd bought tablecloths with unique patterns for a special price of R
per tablecloth.
Thirteen tablecloths were sold during the yearly Christmas market. These
were sold at a discount of
During the night of December burglars got access to the shop and stole
some tablecloths. The tablecloths were displayed with the oldest tablecloths at the
front the burglars, therefore, stole some of the eldest tablecloths in stock. The
owners were traumatised and did not take stock count on the day.
EVE Ltd sold tablecloths to local supports.
On December EVE Ltd held an inventory count that indicated the
following:
Tablecloths units on hand
Napkins R
Included in the napkins inventory at yearend are napkins with a cost price of R
that were damaged during the burglary. These damaged napkins can only be
sold if they get cleaned for R The cleaned napkins can then be sold at a
discount of REQUIRED:
Calculate the value of the tablecloths that were stolen on December
Calculate by indicating the movement in inventory from January
December
Make use of the following format:
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Prepare the Cost of Sales general ledger account for ONLY the napkins for
the year ended December
Please note that dates are not necessary.
Round off to the nearest Rand where applicable.
Close off account at year end.
SAICA Competency Framework Reference:
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