economics - 2009 Test 2 Question 1 Suggested solution a....

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2009 Test 2 Question 1 Suggested solution a. (11 marks) Interest Income 01/5/08 Accrued interest income 7 500 31/5/08 Bank 10 000 (R300k x 10% x 3/12) (R300k x 10% x 4/12) 30/4/09 Profit & loss 28 750 30/9/08 Bank 10 000 (R300k x 10% x 4/12) 31/1/09 Bank 10 000 (R300k x 10% x 4/12) 30/4/09 Accrued interest income 6 250 (R250k x 10% x 3/12) 36 250 36 250 Workings: Repayment dates so far: 01/2/07, 01/2/08, 01/2/09 Therefore 5 instalments remain Each instalment: R250 000 ÷ 5 = R50 000 Balance outstanding at beginning of year = R250 000 + R50 000 = R300 000 b. (3 marks) Dr Accrued salaries expense (L) 5 000 Cr Salaries expense 5 000 Reversal of prior year adjustment for unpaid salaries c. (2 marks) Rent paid = R36 600 – R6 100 + R3 050 = R33 550 d. (5 marks) Accumulated depreciation - equipment 30/4/09 Balance c/d 76 500 01/5/08 Balance b/d 58 500 30/4/09 Depreciation expense 18 000 76 500 76 500 Workings: Depreciable amount = R200k – R20k = R180 000 Depreciation expense per year = R180k ÷ 10 yrs = R18 000 No of months from 01/2/05 to 01/5/08 = 3 yrs x 12 mnths per yr + 3 months = 39 months Accumulated depreciation as at 01/5/08 = R18k x 39 /12 = R58 500 e. (4 marks) Dr Cost of sales expense 11 000 Cr Inventory (A) 11 000 Workings: NRV = R20k – R5k = R15 000 Write-down of damaged inventory = R18k – R15k = R3 000 Correct carrying value of inventory = R134k – R3k = R131 000 Total write-down = R145k – R131k = R11 000
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This note was uploaded on 02/28/2012 for the course ECO 1010F taught by Professor Catherinekannemeyer during the Spring '11 term at University of Cape Town.

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economics - 2009 Test 2 Question 1 Suggested solution a....

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