exam pack from 2015 to 2017.pdf

Bank account 1 total receipts these are calculated by

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BANK ACCOUNT 1. Total Receipts: these are calculated by adding together the following: Sales 16 000 Debtors control 5550 Settlement Discount granted (150) VAT Output 2240 VAT input (20) 23620 31 | P a g e
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FAC1502 2014 (a) Sales represent cash sales; therefore they are included in total. (b) Debtors control is the gross amount settlement discounts before subtracting settlement discounts granted. As a result, the settlement discount should be deducted from the gross amount. (c) VAT Output: this should be included as this is part of the amounts receives by the business although this will later be handed over to SARS. (d) VAT input is to be deducted because it represents reductions in amounts receivable. (e) The cost of sales column is not added as it is used as a tool of updating the cost of sales when using the perpetual inventory system. This column does not affect amounts received. 2. Total Payments These were calculated as follows Purchases 5800 Creditors 8200 VAT Input 1148 VAT Output (25) Settlement Discount Received (100) Sundry expenses 3395 18418 Purchases, Sundry expenses and VAT input are included as they represent actual amounts paid. Creditors represents the gross amounts of debts settled, therefore, the settlement discount should then be deducted to arrive at the net amount paid. VAT output in the CPT represents a reduction in amounts payable, therefore it should be subtracted. 32 | P a g e
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FAC1502 2014 SOLUTION 4: GROSS PROFIT DETERMINATION JUMBO TRADERS Inventory account Balance b/d 155000 Cost of sales 602000 Creditors control (refer to creditors control account) 612000 Balance c/d 165000 767000 767000 Balance b/d 165000 Debtors control account Balance b/d 159000 Credit losses 8000 Sales 1002000 Bank 950000 Balance c/d 203000 1161000 1161000 Balance b/d 203000 HINTS Sales is balancing figure Creditors control Bank 560000 Balance b/d 68000 Balance c/d 120000 Inventory 612000 680000 680000 Balance b/d 120000 HINTS a) Purchases/ Inventory bought = Balancing figure Trading Account Cost of Sales (from inventory account) 602000 Sales 1002000 Profit or loss (gross profit) 400000 1002000 1002000 33 | P a g e
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FAC1502 2014 HINTS Gross profit - balancing figure If balancing figure was on the credit side it would have been a gross loss. Inventory Account Inventory is an asset; therefore, the balance b/d is always on the debit side whilst the balance carried forward (c/d) will be on the credit side. The purchases or creditors control is the balancing figure in the creditors control account. The cost of sales refers to the items from inventory that have been sold during the period. In this case it is the balancing figure after period. In this case it is the balancing figure after making all the entries in the inventory account. Debtors Control This is an asset, therefore the balance bought forward is on the debit side whilst the balance carried forward is on the credit side. In this case, since all the balances and are given.
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