ACCE 112: ANALYSIS OF TRANSACTIONS

HOMEWORK 3: RESERVOIR STORES

Analyse the following transactions according to the Answer sheet provided. Assume a favourable
bank balance. The business uses the perpetual inventory system and a profit mark-up system of
75% on cost is maintained.

Transactions of Reservoir Stores for March 2020:

1. Paid R384 by EFT to a creditor LM Wholesalers in full settlement of our outstanding balance of
R400.
2. J. James, a debtor, has been declared insolvent. His estate will pay 40c in the Rand, the
balance of his outstanding debt of R800 must be written off. No entries has been made to
record the transaction.
3. Paid by EFT 001 – 005 R10 000 to employees in respect of their net salaries as shown in the
Salaries journal for March 2020.
4. The account of K. Pillay, a debtor with a credit balance of R100, must be closed and transferred
to his account in the Creditor's ledger.
5. Received R120 from J. Boden whose debt of R300 was written off as a bad debt four months
ago.
6. The account of D. Crouse, a debtor whose account of R400 has been in arrears for three
months, is charged with interest at a rate of 18% per annum.
7. The owner took trading stock with a selling price of R245 for his personal use.
8. Paid R20 out of petty cash on behalf of B. Cloete being carriage on goods delivered to him.
9. Purchased merchandise, R2 500, on credit form Els Stores. The merchandise is subject to 20%
trade discount and 5% cash discount if payment is made within 30 days.
10. Trading stock not according to order is returned to the creditor, AB Wholesalers, R150.
11. Received R10 000 from ACE Bank for a loan approved at an interest rate of 18% p.a.

12. Sold merchandise to S. Roux and issued him with an invoice for R490

13. Purchased stationery on credit from Kiljan Traders for R530.

14. The owner, R. Reservoir, increased his capital from R100 000 to R150 000 by giving his old
Ford panel van worth R30 000 to the business and for the rest of the amount was transfered by
EFT into the business current account

15. A debtor, K. Motsoneng, claimed a discount of R20 on an overcharge on merchandise

purchased. The claim was approved.

ACCE 112: Homework 3 / Analysis of transactions / Reservior Stores / Question 1/1

ACCE 112: Homework 3 / Analysis of transactions / Reservior Stores / Question 2/1