exam pack from 2015 to 2017.pdf

The profit or loss account is closed off to the

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The profit or loss account is closed off to the capital account. If there is a profit, we debit the profit or loss account and credit the capital account. If there is a loss, we debit the capital account and credit the profit or loss account. Drawings are closed off to the capital account by debiting capital account and crediting the drawings account. 3.1 Robust Traders 54 | P a g e
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FAC1502 2014 GENERAL JOURNAL Date Details Folio Debit Credit R R 2009 June 30 Capital Drawings 2 445 2 445 June 30 Sales Settlement Discount Granted 553 553 June 30 Settlement discount received Purchases 155 155 June 30 Sales (256 400-553) Purchases returns Closing inventory Trading account 255 847 245 13 550 269 642 June 30 Trading account Purchases (154 880-155) Carriage on purchases Sales returns Inventory (opening) 171 608 154 725 660 1 338 14 885 June 30 Trading account (Gross Profit: 269 642-171 608) 98 034 98 034 June 30 Commission income Rent income Profit and Loss Account 15 000 3 600 18 600 June 30 Profit or Loss Credit losses Depreciation Insurance Packing materials Wages Water and Electricity 82 519 244 15 400 2 400 3 300 56 775 4 400 June 30 Profit or Loss Account: Net Profit (98 034+18 600-82 519) Capital 34 115 34 115 Date Details Folio Amount Date Details Folio Amount R R Trading Account 2009 June 30 Inventory (opening) Purchases (C2) Carriage on Purchases Sales Returns Profit or Loss (Gross Profit) 14 885 154 725 660 1 338 98 034 2010 March 31 Sales (C1) Inventory: closing Purchases returns 255 847 13 550 245 55 | P a g e
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FAC1502 2014 269 642 269 642 Date Details Folio Amount Date Details Folio Amount R R Profit or Loss Account 2009 June 30 Credit losses Depreciation Insurance Packing materials Wages Water and Electricity Capital (Net Profit) 244 15 400 2 400 3 300 56 775 4 400 34 115 2010 March 31 Trading Account (gross profit) Commission income Rent income 98 034 15 000 3 600 21 600 21 600 C1: Sales Sales = Sales-Settlement discount granted = R256 400-R553 = R255 847 C2: Purchases Purchases= Purchases-Settlement discount received = R154 880-R155 = R154 725 56 | P a g e
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FAC1502 2014 57 | P a g e
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FAC1502 2014 SOLUTION 5: CASH JOURNALS; VAT CASH RECEIPTS JOURNAL ¾ This is a book of original entry in which we record all receipts of money. ¾ The analysis columns for receipts are entered at the end of each day as it is entered when amounts are banked. According to the question, cash and cash equivalents are daily deposited at the bank. ¾ VAT output refers to the VAT charged to our customers. This amount belongs to SARS. It is entered at the point of charging, not at the point of payment. As such, VAT is charged at the point of sale, whether on cash or on credit. We calculate VAT for cash sales and enter it in the VAT output column in the Cash Receipts Journal and we calculate VAT on credit sales and enter it in the VAT output column in the Sales Journal. No adjustment for VAT is made when customers settle their accounts. ¾ If selling price or transactions are inclusive of VAT, as in most cases, calculate VAT by multiplying by the factor 14/114 derived as follows: x Price exclusive of VAT = 100% x VAT = 14% x Price inclusive of VAT = 114% ¾ Therefore, vat = 14/114x Price inclusive of VAT Or VAT= 14/100x Price exclusive of VAT ¾
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