The following trial balance was taken from the books of Reef Traders on 30 June 2019: N$ Dr NS Cr 132 200 4331 150 000 13 400 100 000 Statement of financial position for the division: Capital Drawings Land and buildings Equipment at cost Vehicles at cost Accumulated depreciation Equipment Accumulated depreciation: Vehicles 12% Mortgage loan Unlisted share investment Creditors Debtors Listed share investment Allowance for credit losses debt Inventory (1 July 2018) Bank 6 600 24 300 100 000 4 000 21 200 18 800 12 000 650 2 080 8 455 95 700 525 208 000 Nominal accounts for the division: Purchases and imports Purchases returns Sales Freight on purchases Import duty Sales returns Salaries and wages Dividends on listed shares Office expenditure Insurance Bank charges Rent Interest on loan Freight on sales Discount allowed 10 560 18 480 160 60 669 2 800 4 200 3 159 1 841 5 280 8 000 1 950 680 Additional information: 1 Inventory on hand on 1 July 2018 consisted of 650 units. Purchases and imports during the year were: a. 14 000 units N$ 49 000 b. 12 000 units N$ 45 000 c 400 units N$ 1 700 2. 26 020 units were sold during the year 20 units were returned by buyers. 150 units of the first consignment purchases were sent back to creditors. Inventory is valued on the FIFO basis 3. Since 1 Jan 2016 a storeroom has been rented. The initial rent was N$500 per month On 1 Jan 2017 the rent was increased by 10% and remained unchanged until 4. 5. 6. 1 Jan 2019. An increment of 20% that applied on the rent at that time was instituted. On 30 June 2019 there was still three (3) months' rent in arrears. Insurance premiums are paid annually on the following dates: a. 1 October NS 486 b. 1 January N$ 624 c. 1 April N$ 900 Discount allowed and not yet recorded, N$ 220 Debtors to the amount of NS 1 580 are insolvent. An average dividend of 3c in the Namibian Dollar was received. Adjust the allowance for credit losses to 4% of good debtors Depreciation on equipment is written off according to the sum of digits method. The residual value is calculated at N$ 800. The equipment was purchased on 1 July 2016 The estimated useful life of the equipment is six (6) years. The fleet of vehicles was purchased on 1 July 2016. It is estimated that the vehicles will be able to do a total of 650 000 kilometres with a residual value of N$ 2 500. In the current year a total of 81 000 km were travelled Depreciation must be provided at 5 % of the cost of buildings 7 8 9. QUESTION 4 - REQUIRED Marks Subtotal Total 6 (a) Calculate the closing inventory on 30 June 2019. (b) Compile the statement of profit or loss and other comprehensive income for the financial year ended 30 June 2019 6 6 20 20 Total for the question 26 Source: Accounting Question Bank, 2014, JJ Steyn et al. - question adapted. -END OF PAPER The following trial balance was taken from the books of Reef Traders on 30 June 2019: N$ Dr NS Cr 132 200 4331 150 000 13 400 100 000 Statement of financial position for the division: Capital Drawings Land and buildings Equipment at cost Vehicles at cost Accumulated depreciation Equipment Accumulated depreciation: Vehicles 12% Mortgage loan Unlisted share investment Creditors Debtors Listed share investment Allowance for credit losses debt Inventory (1 July 2018) Bank 6 600 24 300 100 000 4 000 21 200 18 800 12 000 650 2 080 8 455 95 700 525 208 000 Nominal accounts for the division: Purchases and imports Purchases returns Sales Freight on purchases Import duty Sales returns Salaries and wages Dividends on listed shares Office expenditure Insurance Bank charges Rent Interest on loan Freight on sales Discount allowed 10 560 18 480 160 60 669 2 800 4 200 3 159 1 841 5 280 8 000 1 950 680 Additional information: 1 Inventory on hand on 1 July 2018 consisted of 650 units. Purchases and imports during the year were: a. 14 000 units N$ 49 000 b. 12 000 units N$ 45 000 c 400 units N$ 1 700 2. 26 020 units were sold during the year 20 units were returned by buyers. 150 units of the first consignment purchases were sent back to creditors. Inventory is valued on the FIFO basis 3. Since 1 Jan 2016 a storeroom has been rented. The initial rent was N$500 per month On 1 Jan 2017 the rent was increased by 10% and remained unchanged until 4. 5. 6. 1 Jan 2019. An increment of 20% that applied on the rent at that time was instituted. On 30 June 2019 there was still three (3) months' rent in arrears. Insurance premiums are paid annually on the following dates: a. 1 October NS 486 b. 1 January N$ 624 c. 1 April N$ 900 Discount allowed and not yet recorded, N$ 220 Debtors to the amount of NS 1 580 are insolvent. An average dividend of 3c in the Namibian Dollar was received. Adjust the allowance for credit losses to 4% of good debtors Depreciation on equipment is written off according to the sum of digits method. The residual value is calculated at N$ 800. The equipment was purchased on 1 July 2016 The estimated useful life of the equipment is six (6) years. The fleet of vehicles was purchased on 1 July 2016. It is estimated that the vehicles will be able to do a total of 650 000 kilometres with a residual value of N$ 2 500. In the current year a total of 81 000 km were travelled Depreciation must be provided at 5 % of the cost of buildings 7 8 9. QUESTION 4 - REQUIRED Marks Subtotal Total 6 (a) Calculate the closing inventory on 30 June 2019. (b) Compile the statement of profit or loss and other comprehensive income for the financial year ended 30 June 2019 6 6 20 20 Total for the question 26 Source: Accounting Question Bank, 2014, JJ Steyn et al. - question adapted. -END OF PAPER