QUESTION $4$

$(25$ Marks$)$

Jack Ltd sells portable waterproof speakers to hypermarkets. You have been asked to assist in the preparation of the annual financial statements for the year ended $31$ March $2024.$ The following statement of comprehensive income has been prepared by the bookkeeper,

$\backslash$table$[[,$R$],[$Retained income $31$ March $2024,80476],[$Sales$,236000],[$Purchases$,93338],[$Import duty,$14160],[$Salaries$,29736],[$Rent$,19234],[$Interest$,3540],[$General expenses,$26786],[$Profit$,35990]]$

On investigation of the above statement of comprehensive income, you discover the following;

The bookkeeper had not journalized the reversing entry for the accrual at $31$ March $2024$ of rent paid in advance of R$3540$ and sales received in advance of R$7870.$ Both these amounts are related to April $2023.$ All other reversing entries have been processed.

Interest represents payments of interest for the year on a loan of R$35400.$ The interest rate is $15\%$ per annum, and there have been no repayments during the year.

The inventory per the statement of financial position at $31$ March $2023$ was R$7420,$ which represented $70$ speakers valued at $R106.$

There were $80$ speakers on hand at $31$ March $2024.$ Of these, $8$ were considered worthless. Jack Solutions accounts for inventory on the periodic using the FIFO basis of allocating costs.

The purchases and purchase returns records for the year were as follows:

$\backslash$table$[[$Purchases$,],[$July$,330$ units at R$100$ each$],[$October$,375$ units at R$110$ each$],[$January$,118$ units at R $120$ each$],[$March$,25$ units at R$130$ each $($after trade discount$)],[,],[$Purchase returns,$],[$July$,47$ units at R$100$ each$],[$March$,10$ units at R$130$ each$]]$

A Chinese supplier entered the market in late March and was selling its speakers at R$177$ each. The normal selling price of Jack was R$236.$

In March $2024,$ a carton of $10$ speakers purchased in March was stolen. Jack is not insured for losses of this nature.

No taxation or dividends are payable for the year.

Required;

a$)$ Record the journal entries to finalise the books for the year ended $31$ March $2024$ for items $1,2,6$ and $7$ only. Narrations are not required. If no entry is required, state this fact and give a reason for your answer.

$(10$ marks$)$

b$)$ Prepare the statement of comprehensive income for the year ended $31$ March $2024,$ taking $(1-8)$ above into account.

$(15$ marks$)$

Question $3$

$[36$ Marks$]$

You are employed as the cost accountant of Thabani Civil Engineers Pty Ltd$,$ and your company trades in a single, homogeneous product. On $1$ August $2020,$ there were $5500$ units with a selling price of R $4$ each $($after marking these goods up with $25\%$ on cost$)$ on hand. Your company uses the perpetual inventory system.

The following transactions were carried out by your company during the month of August $2020$:

Date Transactions

$4$ Purchased $2500$ units at R $3\mathrm{.}70$ each.

$10$ Sold $6500$ units at $R6\mathrm{.}20$ each.

$16$ Purchased $1300$ units at R $3\mathrm{.}80$ each.

$20$ Purchased $5000$ units at R $3\mathrm{.}50$ each.

$26$ Sold $5500$ units at $R6\mathrm{.}20$ each.

$30$ Purchased $2000$ units at R $3\mathrm{.}85$ each.

Required:

Calculate each of the following using the FIFO method:

$3\mathrm{.}1$ The value of the closing inventory on $31$ August $2020$

$(25$ marks$)$

$3\mathrm{.}2$ The sales revenue for August $2020$

$(3$ marks$)$

$3\mathrm{.}3$ The cost of sales for August I $2020$

$(6$ marks$)$

$3\mathrm{.}4$ The gross profit for August $2020$

$(2$ marks$)$

$($Ignore VAT$).$

$7$

HICMA$1181-$Jan$-$Jun$2024-$FA$1-$CTM$-$V$\mathrm{.}3-29012024$