FAC1502 Assignment 02 Semester 01 2020 Solutions

FAC1502
Financial Accounting Concepts, Principles and
Procedures
Assignment 02 for Semester 01 (compulsory)
Unique Number 887604
Due: 08 April 2020


Question 1:

Use the information provided below, for Siyeza Traders for the financial year ended 28
February 20.8, to answer questions 1 to 3.

Siyeza Traders is an enterprise that sell motor vehicles in the ordinary course of business at
a mark-up of 45% on cost. During the current financial period, Siyeza Traders sold eight
motor vehicles for a cash price of R80 000 each (15% VAT inclusive). Round your answer off
to the nearest Rand.

1. Income earned from the sale of motor vehicles will be classified under ... in the
statement of profit or loss and other comprehensive income.

(1) Other income
(2) Profit on sale of motor vehicle
(3) Revenue
(4) Gains
(5) Finance income
Answer:

, 2. Income earned from the sale of motor vehicles will be disclosed in the statement of
profit or loss and other comprehensive income as an amount of … .

(1) R640 000
(2) R441 379
(3) R544 000
(4) R556 520
(5) R352 000
Answer:
Selling price = R80 000 each (15% VAT inclusive)
100
So (R80 000 × 8) × 115 = R556 520