Question 4 A business commenced on 1 January and purchases are made as follows: Month No. of units Unit price Value Jan 380 2 760 Feb 400 2.5 1000 Mar 350 2.5 875 Apr 420 2.75 1155 May 430 3 1290 Jun 440 3.25 1430 2420 6510 Notes The suspense account represents 10,000 received from the sale of a salesman's car on April 1 The car had cost 24,000 and had been fully depreciated. No adjustment had yet been made to the Cars or Accumulated Depreciation accounts Depreciation is to be provided for the year as follows:- Office fixtures and fittings - 10% using the reducing balance method. Salesmen's cars - 25% on cost Rent and rates includes 15,000 rent paid in respect of the quarter to April 30 Accrued office expenses are 1,000. A general reserve of 8,000 is to be set Inventory at March 31 2019 was 192,000 A customer owing 34,000 at the year-end went into liquidation on April 2 It is not expected that any of the money owed will be recovered The company declared the final preference dividend on March 2 This dividend will be paid on May 4 2019. The corporation tax charge for the year is calculated to be 30,000. Required 1. ) Show the double entries for the end of year adjustments. (Notes a - 1) 7marks (% mark per double entry) 2. ii) Prepare the statement of Profit or Loss (Income statement) Smarks il) Prepare the statement of changes in equity (SOCIETY) 3marks 1. Prepare the Statement of Financial Position. 9marks SHOW ALL WORKINGS (7marks available for workings) Mar 350 2.5 875 Apr 420 2.75 1155 May 430 3 1290 Jun 440 3.25 1430 2420 6510 In June, 1420 articles were sold for 7000 What is the cost of closing inventory and gross profit for the period using the FIFO method? Total 12 marks Question 4 A business commenced on 1 January and purchases are made as follows: Month No. of units Unit price Value Jan 380 2 760 Feb 400 2.5 1000 Mar 350 2.5 875 Apr 420 2.75 1155 May 430 3 1290 Jun 440 3.25 1430 2420 6510 Notes The suspense account represents 10,000 received from the sale of a salesman's car on April 1 The car had cost 24,000 and had been fully depreciated. No adjustment had yet been made to the Cars or Accumulated Depreciation accounts Depreciation is to be provided for the year as follows:- Office fixtures and fittings - 10% using the reducing balance method. Salesmen's cars - 25% on cost Rent and rates includes 15,000 rent paid in respect of the quarter to April 30 Accrued office expenses are 1,000. A general reserve of 8,000 is to be set Inventory at March 31 2019 was 192,000 A customer owing 34,000 at the year-end went into liquidation on April 2 It is not expected that any of the money owed will be recovered The company declared the final preference dividend on March 2 This dividend will be paid on May 4 2019. The corporation tax charge for the year is calculated to be 30,000. Required 1. ) Show the double entries for the end of year adjustments. (Notes a - 1) 7marks (% mark per double entry) 2. ii) Prepare the statement of Profit or Loss (Income statement) Smarks il) Prepare the statement of changes in equity (SOCIETY) 3marks 1. Prepare the Statement of Financial Position. 9marks SHOW ALL WORKINGS (7marks available for workings) Mar 350 2.5 875 Apr 420 2.75 1155 May 430 3 1290 Jun 440 3.25 1430 2420 6510 In June, 1420 articles were sold for 7000 What is the cost of closing inventory and gross profit for the period using the FIFO method? Total 12 marks
