Question
QUESTION 2 DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT; CREDITORS CONTROL [20 MARKS] 2.1 REQUIRED Use the information provided below to prepare the Fixed Asset Realisation
QUESTION 2 DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT; CREDITORS CONTROL [20 MARKS]
2.1 REQUIRED Use the information provided below to prepare the Fixed Asset Realisation account in the General Ledger of Karridene Traders. (5)
INFORMATION
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On 01 March 2015, the following balances appeared, amongst others, in the books of Karridene Traders:
Vehicles (at cost) R500 000
Accumulated depreciation on vehicles R220 000
-
On 31 May 2015, an old vehicle that cost R200 000 was sold for cash to J. Jones for R50 000. The
accumulated depreciation on the vehicle sold amounted to R150 000 on 01 March 2015.
-
Depreciation is calculated at 20% p.a. on cost. The financial year ends on the last day of February
each year.
2.2 The information given below was extracted from the records of Salmo Traders for May 2016:
REQUIRED
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2.2.1 Prepare the correct Creditors Control account for May 2016. Balance the account. (9)
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2.2.2 Prepare the correct Creditors List as at 31 May 2016. (6)
INFORMATION
The following Creditors Control account and Creditors List appeared in the books of Salmo Traders before the additional information provided below was considered:
DR CREDITORS CONTROL CR
2016 May 01
31
Bank and discount Purchases returns Interest expense Balance
71 350 840 30 31 280
2016 May 31
CPJ4 PRJ4 GJ4 c/d
Balance Purchases Equipment
SRJ4 PJ4 GJ4
28 500 73 400 1 600
103 500
103 500
00 5
Jun 01 Balance b/d 31 280
Creditors List as at 31 May 2016
Creditor
Miller Traders Engin Enterprises Rio Traders Mega Suppliers Riptide Stores
Debit
Credit
4 600
7 020 18 800 3 400
300
300
33 820
Additional information not yet recorded:
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One entry appears on the wrong side of the Creditors control account.
-
The credit balance of R300 in the account of Miller Traders in the Debtors Ledger must be transferred
to their account in the Creditors ledger.
-
An invoice for goods purchased from Miller Traders was entered in the Purchases journal as R3 240
instead of R2 340.
-
A return of goods for R1 530 to Rio Traders was correctly recorded in the Purchases Returns Journal
but was posted to their account as R1 350 in the Creditors ledger.
-
An electronic payment to Engin Enterprises in part payment of account was not recorded in the Cash
Payments Journal, R700.
-
A cheque to Mega Suppliers for R2 000 was recorded in the Cash Payments Journal but not posted
to their account in the Creditors ledger.
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