exam pack from 2015 to 2017.pdf

# 8 28 february 209 120000 24000 x 20 19200 01

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01 March 20.8 - 28 February 20.9 (120000 - 24000) x 20% = 19200 01 September 2008 equipment 01 September 20.8 – 28 February 20.9 30 000 x 20% x 6 12 = 3000 46200 (a) Depreciation on new equipment 57000 x 20% x 8 12 = 0 7600 (b) Depreciation sold equipment 01 March 20.7 - 28 February 20.8 24000x 20% = 4800 01 March 20.8 - 28 February 20.9 (24000-4800 x 20%) = 3840 01 March 20.9 - 01 June 20.9 (24000 - 4800-3840) x 20% x 3 12 = 768 (c) Depreciation on remaining old equipment (150000 – 24000) – (46200 – 4800-3840) x 20% = 17688 91 | P a g e

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FAC1502 2014 NOTES (a) The cost at the beginning of the period is made up of the cost of all those assets bought prior to the current period. (b) The costs of installation of the equipment should be debited in the equipment at cost account. In terms of International Accounting Standard (IAS16) all the costs of putting the non-current asset into the state required for use by management are to be added to the cost of the asset. (c) Depreciation on the sold equipment will be provided from the beginning of the period up to the date of sale (01 March 2009 – 30 May 2009). It will not be depreciated for June as it was disposed of on the first day of the month. (d) When calculating the depreciation on the remaining old equipment, we first subtract the accumulated depreciation of the asset sold from the depreciation of the old asset prior to this year. (e) Upon disposal, all the depreciation that had been provided on the disposed of asset from its date of purchase should be eliminated from the books of accounts by debiting the Accumulated Depreciation Account and crediting the Realisation Account. 92 | P a g e
FAC1502 2014 OCTOBER – NOVEMBER 2011 93 | P a g e

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FAC1502 2014 94 | P a g e
FAC1502 2014 95 | P a g e

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FAC1502 2014 SOLUTION 1: CLOSING ENTRIES XYZ TRADERS GENERAL JOURNAL 1.1 Trading inventory bought into a/c DEBIT CEDIT Inventory : Trading (closing ) 14885 Trading account 14885 1.2Closing Entries Sales 553 Settlement discount granted 553 Settlement discount received 155 Purchases 155 Trading acc 156723 Carriage on purchases 660 Purchases 154725 Sales returns 1338 Sales 255847 Purchases returns 245 Trading acc 256092 Trading acc 100704 Profit or loss 100704 Profit or Loss 82519 Credit loss 244 Depreciation 15400 Insurance 2400 Packing materials 3300 Wages 56775 Water and electricity 4400 Commission income 15000 Rent income 3600 Profit or loss 18600 Profit or loss 36785 capital 36785 capitals 2445 drawings 2445 96 | P a g e
FAC1502 2014 1.3 XYZ TRADERS GENERAL LEDGER Trading Account June 30 Inventory 13550 Inventory 14885 Carriage on purchases 660 Sales (256400 – 553) 255847 Purchases 9154880-155) 154725 Purchases returns 245 Sales returns 1338 Profit & loss (gross) 100704 270977 270977 Profit or loss account June 30 Credit loss 244 Trading account 100704 Depreciation Wages 15400 56775 Commission income 15000 Insurance 2400 Rent income 3600 Packing materials 3300 Water and electricity 4400 Capital (net profit) 36785 119304 119304 NOTES: CLOSING ENTRIES 1. (a) The closing entries are as follows: Opening stock: Dr Trading Account Cr Inventory (b) Closing Stock: Dr Inventory Cr Trading Account (2) The settlement discount granted account is closed off to the sales account as follows: Dr Sales Cr Settlement Discount Granted (3) The settlement discount received account is closed off to the purchases account as follows: Dr Settlement Discount Received Cr Purchases Account (4) Sales will be transferred to the Trading Account as follows: Dr

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