Question 2

c) The net profit originally calculated at N$25 370. Show your calculation of the correct

figure. (5 marks)

Question 4 (37 marks)

4.1 Gold construction cc depreciates its plant at a rate of 25% per annum, straight-line method, for each month of ownership. The following additions were made and the financial year ends 31 December.

01 January 2014

Bought plant costing N$2 600 by cheque

01 October 2014

Bought plant costing N$2 100 by cheque

01 September 2016

Bought plant costing N$2 800 cash

31 August 2017

Sold for the sum of N$810 which had been bought for N$2 600 on 01 January 2014.

You are required to draw up the following:

4.1.1 Plant account for each of the years 2014; 2015; 2016 and 2017. (10 marks)

4.1.2 The provision for depreciation account for each of the years 2014; 2015; 2016 and 2017 (14 marks)

4.1.3 Plant disposal account for the year. (4 marks)

4.2 As a manager of a business, you have to choose a method for stock valuation. The business you work for uses the perpetual inventory stock system. On 31 May 2016, there were 350 units at N$18 per unit in stock.

The inventory movement for June are shown below.

Dates

Received

Issued

Unit purchase price

June 1

300

20

12

800

25

24

900

30

150

You are required to:

4.2.1 Calculate the value of closing stock using the LIFO (Last in first out) method of stock valuation (9 Marks)

You are required to a statement of Affairs (Statement of financial position as at 31 December 2017 Draw up Question 4 (37 marks) method, ends 31 December. Gold construction cc depreciates its plant at a rate of 25% per annum straight-line for each month of ownership. The following additions were made and the financial year 01 January 2014 01 October 2014 Bought plant costing N$2 600 by cheque Bought plant costing N$2 100 by cheque 01 September 2016 Bought plant costing N$2 800 cash Sold for the sum of N$810 which had been bought for N$2 600 on 01 January 2014. 31 August 2017 You are required to draw up the following: 4.1.1 Plant account for each of the years 2014; 2015; 2016 and 2017. (10 marks) 701 zaiyPage 14 of 15