Accounting Assignment 2

Question 1

1.1.1) D
1.1.2) D
1.1.3) B

1.2)

Note 9

Property, plant & Buildings Gym Equipment Furniture & Fiitngs

equipment:
Balances at 1 (R) (R)
January 2020 (R)
Cost 550 000 275 000 88 000
Accumulated -27 500 -140 000 -23 500
Depreciation
Carrying amount: 522 500 135 000 64 500
1.1.20

Movements for the

year
Additions at cost 60 000 130 000 20 000

Disposals at Carrying 44880

Amount
Cost (66 000)
Accumulated -21 120 -22 000
depreciation

Depreciation for the -11600 30 860 -22 500

year 31.12.2020

Carrying amount: 543 400 530 860

1.1.20

Cost 582500 339 000 108 000

Accumulated -39 100 (191 860) -46 000
Depreciation

Workings

Buildings

550 000 x 2% = 11000

60 000 x 2% x (6/12) = 600

Fixtures & Fittings

20 000/4 = 5 000 x (6/12) = 2 500

88 000/4 = 22 000

Dr Debtors Control Cr
31.05.21 Sales SJ 762 000 31.05.21 Bank Crj 586 800
Interest GJ 2 100 Sales Srj 7 200
charged returns
on (6 300 +
overdue 900)
accounts
C Gale SJ 5 400 R Nadal 9 000
G Hunt 1 827

Bad 2 700
debts
write off
764 100 764 100
Balance b/d 165 627

Question 2

2.1)
2.2)

C Gale
Date Doc No Detail Folio Debit R Credit R Balance
31.05.2021 Balance 31 500 31 500
Sales 5 400 36 900
Correction 4 500 41 400
of incorrect
credit note

H Bolt
Date Doc No Detail Folio Debit R Credit R Balance
31.05.2021 Balance 132 300 132 300
Payment 37 800 94 500
receipt

G Hunt
Date Doc No Detail Folio Debit R Credit R Balance
31.05.2021 Balance 182 700 182 700
Interest 1 827 184 527
charged

I Khune
Date Doc Detail Folio Debit Credit R Balance
No R
31.05.2021 Balance 18 18 900
900
Coorection of 4 500 14 400
incorrect
credit note
 R Nadal
Date Do Detail Foli Debit Credit R Balance
c o R
No
31.05.2021 Balance 9 000 9 000
Bad debts written 9 000 0
off
Question 3

Adax Design Services

Statement of changes in equity for year ended 28 February 2021

Current Accounts Andile - R Sipho – R Appropriation

only
Balances at 1 40 000 (20 000) 0
March 2020
Profit for the year 800 000

Appropriations: 439 860 360 140 (800 000)

Interest on 54 000 40 500 (94 500)
capital(W1)
Interest on current 4 800 (2 400) (2 400)
accounts(W2)
Salaries - 108 000 120 000 (228 000)
partners(W3)
Bonus – 20 000 (20 000)
Sipho(W4)
Remaining profits 455 100
Share of profits 273 060 182 040 (455 100)

Drawings(W3) (238 000) (222 000)

Balance at 28 241 860 118 140 0

February
2021(40 000 +
439 860 -238 000)

Working 1(W1) – Interest on Capital

Andile Sipho

400 000 x 12% x 0.5 = 24 000 300 000 x 12% x 0.5 = 18 000

400 000 x 15% x 0.5 = 30 000 300 000 x 15% x 0.5 = 22 500

24 000 + 30 000 = 54 000

Working 2(W2) – Interest on current accounts

Andile Sipho
40 000 X 12% = 4800 (20  000) x 12% = (2 400)

Working 3(W3) – Salaries and drawings Partners

Andile Sipho

18 000 x 12 = 216 000 x 50% = 108 000 20 000 x 12 = 240 000 x 50% = 120000

Drawings = 108 000 + 130 000 = (238 000) Drawings = 120 000 + 102 000 = (222 000)

Working 4(W4) – Bonus Sipho

800 000 x 2.5% = 20 000

Question 4

Style Ltd
Statement of profit and loss and other comprehensive income for the year ended 30 June 2020.

2 174 485
Revenue

(1 018 120)
Cost of Sales

Gross profit 1 156 365

Other Income 76100

Commission received ( 69300-6300) 63 000
Interest received 13 100
1 232 465
Distribution, administration and other (771 276.67)
 expenses
Advertising (20 000 x (7/12)) 11 666.67
Credit losses (2 650 + 1 200) + 800 4 600
Electricity & Water (83 570 + 6 400) 90 150
Other operating expenses 664 860
461 188.33
Finance costs
Interest on loan (W1) (35 875)
425 313.33
Income tax expense (122 238)

Profit for the year 303 075.33

Other comprehensive income

Total comprehensive income for the year 303 075.33

Working 1(W1) – Interest on loan

227 500 – 183 750 = 43 750

227 500 – 79 625 = 147 875

79 625 – 43 750 = 35 875

Question 5

COF (Pty) Ltd

Statement of cash flows for the year ended 30 June 2021

Cash flows from R R 93 000

operating activities
Profit before tax 210 000
(123 000 + 87 000)
Adjustments/Reversals: 92 000
Non-cash items: 72 000
Depreciation
Separately disclosable 20 000
items: Interest expense
302 000

Working capital (25 000)

changes:
increase in inventories (10 000)
(302 000 – 292 000)
decrease in trade (30 000)
debtors (690 000 –
720 000)
Increase in payables 15 000
277 000
Cash generated by (92 000)
operations
Interest expense (20 000)
Taxation paid (60 000 + (72 000)
87 000 – 75 000)