FAC1502
Financial Accounting Concepts, Principles and Procedures
Online Assessment November 2020
The following information pertains to ALL STARS Tennis Club
1. Which of the following represents the correct amount for the gross profit/loss of the small
shop selling refreshments of ALL STAR Tennis Club to be disclosed in the income and
expenditure statement for the year ended 31 December 2019
a) Gross profit = R36000
b) Gross profit = R26120
c) Gross profit = R18500
d) Gross profit = R24120
e) Gross profit = 27120
Answer:
• The basic formula to calculate Gross is through taking cost of sales from sales
• Sales – Cost of sales = Gross profit
• You are given the sales amount and you need to work out the cost of sales
• Opening Inventory + Purchases – Closing Inventory= Cost of sales
𝑅1000 + 𝑅10880 − 𝑅2000 = 𝑅9880
𝑅36000 − 𝑅9880 = 𝑅26120
2. On 1 January 2019 the carrying value of equipment was R19720 (cost price R25670 and
accumulated depreciation, R5950). On 1 January 2019 equipment costing R5670 was purchased
(not included in the R25670). The depreciation policy is to provide for depreciation on all
equipment held at year-end, at 25% per annum on the diminishing balance method.
Financial Accounting Concepts, Principles and Procedures
Online Assessment November 2020
The following information pertains to ALL STARS Tennis Club
1. Which of the following represents the correct amount for the gross profit/loss of the small
shop selling refreshments of ALL STAR Tennis Club to be disclosed in the income and
expenditure statement for the year ended 31 December 2019
a) Gross profit = R36000
b) Gross profit = R26120
c) Gross profit = R18500
d) Gross profit = R24120
e) Gross profit = 27120
Answer:
• The basic formula to calculate Gross is through taking cost of sales from sales
• Sales – Cost of sales = Gross profit
• You are given the sales amount and you need to work out the cost of sales
• Opening Inventory + Purchases – Closing Inventory= Cost of sales
𝑅1000 + 𝑅10880 − 𝑅2000 = 𝑅9880
𝑅36000 − 𝑅9880 = 𝑅26120
2. On 1 January 2019 the carrying value of equipment was R19720 (cost price R25670 and
accumulated depreciation, R5950). On 1 January 2019 equipment costing R5670 was purchased
(not included in the R25670). The depreciation policy is to provide for depreciation on all
equipment held at year-end, at 25% per annum on the diminishing balance method.
