Question
Use the following information to answer questions 19 to 30. Alicia and Carey are friends who are passionate about baking. They decided to go into
Use the following information to answer questions 19 to 30.
Alicia and Carey are friends who are passionate about baking. They decided to go into a partnership trading as Florick and Argos Bakery (F&A). They both have an equal interest in the business.
The following information pertains to the business activities for the partnership for the year ended 31 March 2023.
Extracts of balances as of 31 March 2023.
| TRIAL BALANCE AS AT 31 March 2023: | |
| R | |
| Sales | 700,000.00 |
| Capital contribution: Shonda | 145,200.00 |
| Capital contribution: Argos | 114,950.00 |
| Land and buildings (at cost) | 903,870.00 |
| Equipment (at cost) (31 January 2021) | 250,200.00 |
| Vehicles at cost (28 February 2021) | 660,000.00 |
| Loan from Alicia | 113,498.00 |
| Loan to member: Pfizer | 85,305.00 |
| Inventory (31 March 2023) | 140,000.00 |
| Purchases | 520,000.00 |
| Trade receivables control | 43,076.00 |
| Trade payables control | 30,371.00 |
| Bank (Dr) | 58,201.00 |
| Petty cash | 3,388.00 |
| Salaries | ?? |
| Loan from Diane Bank | 500,000.00 |
| Investments (at cost) | 356,950.00 |
| Allowance for settlement discount granted | 1,815.00 |
| Retained earnings (01 April 2022) | 571,120.00 |
| Interim profit distribution paid to members | 50,820.00 |
| Accumulated depreciation: Vehicles | ??? |
| Accumulated depreciation: Equipment | 29,040.00 |
| Stationery (01 April 2022) | 2,500.00 |
| Income received in advance | 17,738.60 |
| Prepaid expenses | 2,200.00 |
| Allowance for credit losses | 6,000.00 |
| Insurance premiums | ?? |
| SARS (income tax) | 123,086.00 |
Additional Information:
1.Revenue
Sales returns for the year amounted to R9000,00.
2. Cost of Sales:
Stock on hand on the 01 April 2022 R65 000,00.
Delivery cost of R12 000 was charged on purchases for the current year.
3. The allowance for credit losses must be adjusted to R7 800,00.
4. Stationery:
Purchases for the current year amounted to R7 000,00.
Alicia and Carey each took stationery with a cost price of R520 for personal use.
The closing balance for Stationery R1 300,00.
4. Depreciations:
Vehicles: 20% on the diminishing method, Residual value of R25 000,00.
The were no additions of Vehicles in the current year.
Equipment: 20% on the straight-line method, Residual value R30 000,00.
New Equipment was purchased on the 31 August 2022 for a cash amount of R260 000, the residual value on the vehicles is estimated at R30 000.
All other assets were purchased on the 01 March 2018 when the business was incorporated.
5. On the 31th of January 2023 a delivery vehicle with a carrying value R70 000,00 was sold for cash of R64 200.
6. The monthly salary cost for old employees is R62 000. The business hired one new employee earning R14 000 per month from 01 December 2022.
7. The monthly insurance premiums are R1300, the total annual payments are made on the 1st of January every year. The current years premium was not recorded in the books of F&C.
8. Loan from Digital Vibez Bank: The loan is unsecured and was granted on 31 July 2022 at an interest rate of 13% per annum payable on 31 March every year. The loan is unsecured and is repayable annually in 8 equal instalments from 1 December 2023.
10. The income tax for the year increased by R48 465.
Question 19
Which of the following alternatives represents the correct amount to be recorded as Sales in the Statement of Profit/Loss for the financial year ending 31 March 20.23?
A.
R 691,000.00
B.
R 537 565,22
C.
R 710 930,00
D.
R 618 200,00
E.
R 698 834,78
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Question 20
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Which of the following alternatives represents the correct amount to be recorded as Cost of Sales in the Statement of Profit/Loss for the financial year ending 31 March 20.23?
A.
R 445 000,00
B.
R 590 900,00
C.
R 300 332,48
D.
R 602 900,00
E.
R 457 000,00
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Question 21
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Which of the following alternatives represents the correct amount to be recorded as an adjustment to Credit Losses in the Statement of Profit/Loss for the financial year ending 31 March 20.23?
A.
R 6 000,00
B.
(R 5 750,00)
C.
(R7 800,00)
D.
R 5 750,00
E.
R 1 800,00
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Question 22
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Which of the following alternatives represents the correct amount to be recorded as the depreciation expense amount relating to the Equipment in the financial year ending 31 March 20.23?
A.
R 90 040,00
B.
R 74 706,00
C.
R 55 540,00
D.
R 70 873,33
E.
R 23 040,00
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Question 23
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Which of the following alternatives represents the correct amount to be recorded as depreciation expense relating to the Vehicles in the financial year ending 31 March 2023?
A.
R 124 833,33
B.
R 76 200,00
C.
R 62 500,00
D.
R 99 906,67
E.
R 145 742,50
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Question 24
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Which of the following alternatives represents the correct amount for the profit/loss on sale of vehicles relating to the Delivery vehicles in the financial year ending 31 March 2023?
A.
R 70 000,00 Profit
B.
R 64 200,00 Profit
C.
R 5 800,00 Loss
D.
R 5 800 Profit
E.
R 64 200,00 Loss
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Question 25
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Which of the following alternatives represents the correct amount for the Salary expense in the financial year ending 31 March 2023?
A.
R 814 000,00
B.
R 700 000,00
C.
R 675 000,00
D.
R 800 000,00
E.
R 744 000,00
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Question 26
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Which of the following alternative is the correct amount to be recorded as Insurance expense for the year ended 31 March 2023?
A.
R 3 900,00
B.
R 1 200,00
C.
R 5 000,00
D.
R 1 300,00
E.
R 11 700,00
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Question 27
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Which of the following alternative is the correct amount to be recorded as Prepaid expense for the year ended 31 March 2023?
A.
R 6 000,00
B.
R 15 600,00
C.
R 4 200,00
D.
R 8 000,00
E.
R 13 900,00
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Question 28
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Which of the following alternative is the correct amount to be recorded as interest expense for the year ended 31 March 2023?
A.
R 7 012,75
B.
R 41 250,00
C.
R 43 333,33
D.
R 48 750,00
E.
R 65 000,00
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Question 29
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Which of the following alternative is the correct amount to be recorded as Income Tax expense for the year ended 31 March 2023?
A.
R 123 086,00
B.
R48 465,00
C.
R 171 551,00
D.
R 141 086,00
E.
R 72 465,00
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Question 30
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Which of the following alternative is the correct amount to be recorded as Stationery for the year ended 31 March 2023?
A.
R 8 460,00
B.
R7 200,00
C.
R5 700,00
D.
R7 160,00
E.
R8 200,00
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Global Accounting And Control A Managerial Emphasis
Authors: Sidney J. Gray, Stephen B. Salter, Lee H. Radebaugh
1st Edition
0471128082, 978-0471128083
