Week+10 - FINANCIAL ACCOUNTING (ACC1006S) SUGGESTED...

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SUGGESTED SOLUTIONS TUTORIALS HANDED IN ON 12 OCTOBER 2009 TUTORIAL 28 1. DR CR 1/6 – 28/6 DR Bank (A) (W2) 323 950 CR Sales income 323 950 DR Cost of sales expense (W1) 226 765 CR Inventory (A) 226 765 Workings 1: Cost per item 28/3 R1 180 + R118 (1180 x 10/100) = R1 298 14/3 R1 200 + R120 (1200 x 10/100) = R1 320 21/3 R1 350 + R135 (1350 x 10/100) = R1 485 Cost of sales = [5 x 1298]+[150 x 1320]+[170 – 5 – 15 = 15 x 1485] = 6 490 + 198 000 +22 275 = 226 765 Workings 2: GP%=30% on sales Therefore selling price = 100% Gross profit = 30% Cost price = 70% So, sales = 100/70 x 226 765 = 323 950 2. Cost of inventory at 1 June 2004 390 115 [5x1298]+[150x1320]+[125x14 85] Cost of inventory sold during June (226 765) Sold, therefore no future benefits (Calc in (1) above) Cost of inventory at 30 June 2004 163 350 OR 125 – 15 = 110 x 1350 x 110/100 Damaged inventory (W1) (1 995) Write-down to NRV Closing inventory 30 June 2004 161 355 Working 1: Cost per damaged statue = 1 485 (R1350 cost per statue + R135 import duties & transport costs) Net Realisable Value each = 1 500 – 300 = 1 200 Therefore write down to lower of cost & NRV = 1 485 - 1 200 = 285 Therefore impairment = 7 x 285 = 1 995 3.1 No entry required. Page
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Week+10 - FINANCIAL ACCOUNTING (ACC1006S) SUGGESTED...

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