UNIT 29

INCOMPLETE RECORDS
Question 1

(a)
SHERELLE
Statement of Affairs at 1 January 2012
$ $
NON-CURRENT ASSETS
Delivery van 14 000
CURRENT ASSETS
Inventory 7 400
Cash at bank 80 000
87 400
less CURRENT LIABILITIES
Trade payables 6 300
Net current assets 81 100
95 100

CAPITAL 95 100

Statement of Affairs at 31 December 2012

$ $
NON-CURRENT ASSETS
Shop premises 95 000
Delivery van 12 000
Fixtures and fittings 8 500
115 500
CURRENT ASSETS
Inventory 11 200
Cash at bank 3 600
14 800
less CURRENT LIABILITIES
Trade payables 8 900
Net current assets 5 900
121 400
NON-CURRENT LIABILITY
Bank loan 25 000
96 400

CAPITAL 96 400
(b)

Calculation of profit or loss for 2012

$
Capital at 31 December 96 400
less capital at 1 January 95 100
increase in capital during year 1 300
Add back drawings 21 700
23 000
Less additional capital 4 000
Profit for year 19 000

Question 2
(a)

ZAK
Statement of Affairs at 1 June 2011
$ $
NON-CURRENT ASSETS
Furniture and equipment 17 300
CURRENT ASSETS
Inventory 11 200
Trade receivables 3 760
Prepaid rent 740
Cash at bank 6 290
21 990
less CURRENT LIABILITIES
Trade payables 4 710
Net current assets 17 280
34 580

CAPITAL 34 580

Statement of Affairs at 31 May 2012

$ $
NON-CURRENT ASSETS
Furniture and equipment 14 900

CURRENT ASSETS
Inventory 13 340
Trade receivables 3 130
16 470
less CURRENT LIABILITIES
Trade payables 5 580
Wages due 530
Bank overdraft 5 180
11 290
Net current assets 5 180
20 080
 NON-CURRENT LIABILITY
Loan from JL Finance Ltd 8 000
12 080

CAPITAL 12 080

(b)
Calculation of profit or loss for 2012
$
Capital at 31 May 2012 12 080
less capital at 1 June 2011 34 580
decrease in capital during year (22 500)
Add back drawings 23 520
1 020
Less additional capital 12 500
Loss for year 11 480

Question 3

(a)
Trade receivables account
$ $
Opening balance 8 700 Bank 53 600
Closing balance
Credit sales 52 100 c/d 7 200
60 800 60 800
Balance b/d 7 200

(b)
Trade payables account
$ $
Bank 37 300 Opening balance 4 900
Closing balance c/d 5 200 Credit purchases 37 600
42 500 42 500
Balance b/d 5 200

Question 4

(a)
Trade receivables account
$ $
Opening balance 19 150 Bank 103 820
Closing balance
Credit sales 107 530 c/d 22 860
126 680 126 680
Balance b/d 22 860
(b)
Trade payables account
$ $
Bank 85 400 Opening balance 14 320
Closing balance
c/d 11 970 Credit purchases 83 050
97 370 97 370
Balance b/d 11 970

Question 5

(a)
Trade receivables account
$ $
Opening balance 9 420 Bank 48 760
Credit sales 51 350 Discounts allowed 880
Closing balance
c/d 11 130
60 770 60 770
Balance b/d 11 130

(b)
Trade payables account
$ $
Bank 31 570 Opening balance 6 280
Discounts received 490 Credit purchases 31 690
Closing balance c/d 5 910
37 970 37 970
Balance b/d 5 910

Question 6

(a)
Trade receivables account
$ $
Opening balance 21 390 Bank 112 300
Credit sales 111 770 Bad debt 140
Closing balance
c/d 20 720
133 160 133 160
Balance b/d 20 720

(b)
Trade payables account
$ $
Bank 66 530 Opening balance 15 990
Discounts received 1 340 Credit purchases 68 890
Closing balance
c/d 17 010
84 880 84 880
Balance b/d 17 010
Question 7
(a) Statement of Affairs at 1 July 2011
$ $ $
NON-CURRENT ASSETS
Shop fittings 22 400
CURRENT ASSETS
Inventory 14 180
Prepaid rent 850
Trade receivables 11 550
Cash at bank 8 420
35 000
less CURRENT LIABILITIES
Trade payables 8 240
Wages accrued 420
(8 660)
Net current assets 26 340
48 740

CAPITAL 48 740

(b)(i) Trade receivables account

$ $
Opening balance 11 550 Bank 116 510
Credit sales 117 650 Closing balance c/d 12 690
129 200 129 200
Balance b/d 12 690

(ii) Trade payables account

$ $
Bank 57 210 Opening balance 8 240
Closing balance c/d 9 780 Credit purchases 58 750
66 990 66 990
Balance b/d 9 780

(iii) Rent
$
Paid 11 470
Add opening prepaid 850
12 320
Less closing prepaid (720)
11 600

(iv) Wages
$
Paid 31 460
Less opening accrued (420)
31 040
Add closing accrued 710
31 750
(v) Depreciation of shop fittings and equipment
$
Opening nbv 22 400
less closing nbv (19 900)
2 500

BESTPRICE FURNITURE STORES

Income Statement for the year ended 30 June 2012
$ $
Revenue 117 650
Less: opening inventory 14 180
add purchases 58 750
72 930
less closing inventory (12 380)
Cost of sales (60 550)
Gross profit 57 100
Less expenses
Rent 11 600
General expenses 15 220
Wages 31 750
Depreciation of shop fittings and
equipment 2 500
(61 070)
Loss for year 3 970

Balance Sheet at 30 June 2012

$ $ $
NON-CURRENT ASSETS
Shop fittings and equipment at net book value 19 900
CURRENT ASSETS
Inventories 12 380
Trade receivables 12 690
Prepaid rent 720
Cash at bank 1 570
27 360
less CURRENT LIABILITIES
Trade payables 9 780
Wages accrued 710
(10 490)
Net current assets 16 870
36 770
CAPITAL
Opening balance 48 740
Less loss for year (3 970)
44 770
Less drawings (8 000)
36 770
Question 8

(a)(i) Trade receivables account

$ $
Opening balance 6 140 Bank 82 980
Credit sales 84 320 Closing balance c/d 7 480
90 460 90 460
Balance b/d 7 480

(ii) Trade payables account

$ $
Bank 45 120 Opening balance 4 300
Closing balance c/d 3 950 Credit purchases 44 770
49 070 49 070
Balance b/d 3 950

(iii) General expenses

$
Paid 11 240
Add opening prepaid 480
11 720
Less closing prepaid 270
11 450

(iv) Electricity charges

$
Paid 4 110
Less opening accrued 350
3 760
Add closing accrued 440
4 200

(v) Depreciation of delivery vehicle

$
Opening nbv 22 400
less closing nbv 19 700
2 700
(b) ALEX
Income Statement for the year ended 30 April 2012
$ $
Revenue 84 320
Less: opening inventory 16 600
add purchases 44 770
61 370
less closing inventory 19 300
Cost of sales 42 070
Gross profit 42 250
Less expenses
Rent 6 820
General expenses 11 450
Electricity charges 4 200
Depreciation of delivery vehicle 2 700
25 170
Profit for year 17 080

Balance Sheet at 30 April 2012

$ $ $
NON-CURRENT ASSETS
Delivery vehicle at net book value 19 700
CURRENT ASSETS
Inventories 19 300
Trade receivables 7 480
Prepaid general expenses 270
Cash at bank 1 090
28 140
less CURRENT LIABILITIES
Trade payables 3 950
Electricity charges accrued 440
4 390
23 750
43 450
less NON-CURRENT LIABILITIES
Loan ($10 000 −− repayments $2 000) 8 000
35 450

CAPITAL
Opening balance 43 270
Add profit for year 17 080
60 350
Less drawings 24 900
35 450
Question 9

(a) Income Statement for the year ended 31 December 2012

$
Revenue 102 000
Less Cost of sales (85 000)
Gross profit (20% x cost of sales) 17 000

(b) Income Statement for the year ended 29 February 2012

$ $
Revenue 380 000
Less: Opening inventory 18 900
Add purchases 282 600
301 500
Less closing inventory (16 500)
Cost of sales (285 000)
Gross profit (25% x revenue) 95 000

(c) Income Statement for the year ended 31 August 2012

$ $
Revenue 420 000
Less: Opening inventory 16 000
Add purchases 298 000
314 000
Less closing inventory (14 000)
Cost of sales* (300 000)
Gross profit 120 000

* Cost of sales is: 20 x average inventory ($15 000)

Question 10

(a) Income Statement for the year ended 31 March 2012

$
Revenue 300 000
Less Cost of sales (240 000)
Gross profit (25% x cost of sales) 60 000

(b) Income Statement for the year ended 30 November 2012

$ $
Revenue 880 000
Less: Opening inventory 42 100
Add purchases 739 600
781 700
Less closing inventory (33 700)
Cost of sales (748 000)
Gross profit (15% x revenue) 132 000
(c) Income Statement for the year ended 30 June 2012
$ $
Revenue 505 000
Less: Opening inventory 23 500
Add purchases 378 000
401 500
Less closing inventory (26 500)
(i) Cost of sales* (375 000)
(ii) Gross profit 130 000

* Cost of sales is: 15 x average inventory ($25 000)

Question 11

(a) Statement of Affairs at 1 October 2011

$ $ $
NON-CURRENT ASSETS 590 000

CURRENT ASSETS
Inventory 72 400
Trade receivables 33 100
Insurance prepaid 800
Cash at bank 11 200
117 500
less CURRENT LIABILITIES
Trade payables 19 400
Accruals –
(19 400)
Net current assets 98 100
688 100

(i) CAPITAL 688 100

(ii) Trade receivables account

$ $
Opening balance 33 100 Bank 449 400
Credit sales 450 000 Closing balance c/d 33 700
483 100 483 100
Balance b/d 33 700

Trade payables account

$ $
Bank 219 800 Opening balance 19 400
Closing balance c/d 22 100 Credit purchases 222 500
241 900 241 900
Balance b/d 22 100
(iii) Insurance
$
Paid 16 200
Add opening prepaid 800
17 000

Wages
$
Paid 94 300
Add closing accrued 1 100
95 400

Depreciation of non-
current assets
$
Opening nbv 590 000
less closing nbv (560 000)
30 000

(b) ALICE CATERING SUPPLIES

Income Statement for the year ended 30 September 2012
$ $
Revenue 450 000
Less: opening inventory 72 400
add purchases 22 500
94 900
less closing inventory (69 900)
Cost of sales (225 000)
Gross profit (50% x revenue) 225 000
Less expenses
Insurance 17 000
General expenses 51 500
Wages 95 400
Depreciation of non-current assets 30 000
(193 900)
Profit for year 31 100
(c) Balance Sheet at 30 September 2012
$ $ $
NON-CURRENT ASSETS
at net book value 560 000
CURRENT ASSETS
Inventories 69 900
Trade receivables 33 700
Prepayments 0
Cash at bank 25 100
128 700
less CURRENT LIABILITIES
Trade payables 22 100
Wages accrued 1 100
(23 200)
Net current assets 105 500
665 500

CAPITAL
Opening balance 688 100
Add profit for year 31 100
719 200
Less drawings (53 700)
665 500

Question 12

(a)(i) Trade receivables account

$ $
Opening balance 6 580 Bank 94 880
Closing balance
Credit sales 96 640 c/d 8 340
103 220 103 220
Balance b/d 8 340

General expenses
$
Paid 14 440
Add opening prepaid 460
14 900
Add closing due 310
15 210
 Rent
$
Paid 8 180
Less closing accrued (290)
7 890
Less closing prepaid (440)
7 450

Depreciation of non-current assets

$
Opening nbv 285 000
Add new 15 000
300 000
less closing revaluation (291 000)
9 000

(b) JOHN
Income Statement for the year ended 30 June 2012
$ $
Revenue 96 640
Less: opening inventory 17 480
add purchases 55 040
72 520
less closing inventory (18 520)
Cost of sales* (54 000)
Gross profit 42 640
Less expenses
General expenses 15 210
Rent 7 450
Depreciation of non-current assets 9 000
(31 660)
Profit for year 10 980

* Cost of sales is 3 x average inventory ($18 000)

PREPARING FOR THE EXAMINATION

Q Ans Q Ans Q Ans Q Ans Q Ans

13 C 14 C 15 B 16 A 17 C

Question 18
(a)
Trade receivables account
$ $
Opening balance 14 480 Bank 85 750
Credit sales 85 280 Discounts allowed 1 320
Closing balance
c/d 12 690
99 760 99 760
Balance b/d 12 690

Trade payables account

$ $
Bank 58 400 Opening balance 11 140
Discounts received 860 Credit purchases 57 600
Closing balance c/d 9 480
68 740 68 740
Balance b/d 9 480

(b) Gross profit margin

This term tells the owner of a business how much gross profit is being made in
relation to turnover. The formula used to calculate this ratio (as a percentage) is

Gross profit x 100

Revenue

(c)
Income Statement for the year ended 31 July 2012
$ $
Revenue 85 280
Less: Opening inventory 7 450
Add purchases 57 600
65 050
Less closing inventory*** 1 090
Cost of sales** 63 960
Gross profit* 21 320

* Gross profit is 25% x revenue (i.e. 25% x $85 280)

** Cost of sales is revenue less gross profit (i.e. $85 280−- $21 320)
*** Calculating closing inventory
i.e. $1 090