FAC1502_EXAM_PACK___FINANCIAL_ACCOUNTING_PRINCIPLES__CONCEPTS___PROCEDURES__1

FAC1502 EXAM PACK FINANCIAL ACCOUNTING PRINCIPLES, CONCEPTS & PROCEDURES MAY – JUNE 2023 SOLUTION 1: STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME (a) N & N ENTERPRISES STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015 R Revenue 500 000 Cost of Sales (362 800) Opening Inventory 100 000 Purchases (283 000 + 39 000 – 5 000) 317 000 Freight charges on purchases 5 000 Shipping Fees 2 800 Import duties 3 300 Delivery Fees 4 100 Modification Costs 2 600 Closing Inventory (72 000) Gross Profit 137 200 Other Income 2 860 Interest on fixed deposit (800 + 1 060) 1 860 Rental Income (2 400 * 5 / 12) 1 000 Total Income Less Expenses 140 060 (143 300) Administrative, Distribution & Other Expenses 139 300 Insurance expenses (5 000 – 3 500) 1 500 30 000 76 800 1 400 9 600 2 600 7 400 10 000 Administration expenses Salaries (76 000 + 800) Depreciation (10 % * 14 000) Municipal taxes Credit losses Advertising expenses (9 800 – 2 400) Water, Electricity and telephone expenses Finance Cost Interest on mortgage (50 000 * 8%) Loss for the year Other Comprehensive Income 4 000 4 000 (3 240) - Total Comprehensive Income (3 240) SOLUTION 2: DEBTORS` & CREDITORS` CONTROL ACCOUNTS 2.1 ZIZOBENZA TRADERS GENERAL LEDGER Date Details Folio Amount Date Details Folio Amount R R Debtors Control Account 2013 2013 Mar 1 Balance b/d 32 780 Mar 1 Balance b/d 1 780 31 Sales and VAT 31 Sales Returns and (R16 840 – R2 736 SJ 14 104 VAT SRJ 1 200 Bank CPJ 3 200 Bank and Sundry Debits GJ 2 760 Settlement Creditors control- Discount CRJ 22 750 set off GJ 1 780 Sundry Credits Creditors control- (R430 + R1 450) GJ 1 880 set off GJ 2 020 Balance c/d 29 034 Receipts 56 644 56 644 April 1 Balance b/d 29 034 NOTES  We start by entering the balances brought forwards. Debtors is an asset, therefore, the normal balance appears on the debit side. There can also be an abnormal credit balance in a bank account. This is whereby the business now owes it`s traditional customers. This can happen as examples when a customer mistakenly overpays, or returns goods after paying for them.  All transactions that increase what our customers owe us should be debited e.g. sales, interest charged on overdue accounts, dishonoured cheques, e.t.c, whilst the transactions which reduce our customers` debts should be credited e.g. payment by our customers, credit losses written off, returns by our customers, e.t.c.  Our sales and sales returns should be included inclusive of VAT because our customers are liable to paying us the total amount including VAT ...............................................continued.....................................................