W8+Inventory - FINANCIAL ACCOUNTING (ACC1006/1106F)...

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FINANCIAL ACCOUNTING (ACC1006/1106F) TUTORIAL ACTIVITY: WEEK STARTING 18 APRIL 2011 TUTORIAL ACTIVITY Cape Computers is a small business based in Observatory which specialises in selling computers to private households and small businesses in the Western Cape. You have been asked by Cape Computers to review certain transactions that took place with respect to inventory during the financial year ended 30 April 2010. Cape Computers uses the perpetual method when recording inventory. You have been provided with the following information: 1. On 1 June 2009, Cape Computers ordered 25 computers from a local supplier. Each computer had a cost price of R4 550. Of these computers , 5 computers were to be used in the sales and administration office of Cape Computers. The computers were delivered to the premises of Cape Computers on 3 June 2009. Cape Computers settled the total amount owing for the computers on 30 June 2009. 2. Tom Barton, the owner of Cape Computers had a cousin who had just returned from overseas and was unemployed. Tom suggested to him that he could make some money by selling computers on behalf of Cape Computers in the Montagu area where his cousin lived. On 15 November 2009, Cape Computers delivered 10 computers on consignment to Tom Barton’s cousin in Montagu. Each computer had a cost of R3 980. It was agreed that the computers would each be sold for R5 600 and that Tom’s cousin would earn commission of 20% on the selling price of each computer sold. On 30 April 2010, Tom’s cousin had sold a total of 6 computers. 3. Cape Computers has a major client in Cape Town that required a specialised desktop computer that would have to be imported from Hong Kong. The computer had a cost price of R29 800. On 15 April 2010 Cape Computers ordered and paid for the computer. Other costs included import duties of R3 260 and packaging costs of R1 250. These costs would be paid in cash on the date that the computer was collected by Cape Computers from the
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W8+Inventory - FINANCIAL ACCOUNTING (ACC1006/1106F)...

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