exam pack from 2015 to 2017.pdf

22 creditors control account bank 25724 balance bd

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2.2 Creditors control account Bank 25724 Balance b/d 37452 Purchases returns 400 Purchases 59724 Balance c/d 71388 Interest expense 336 97512 97512 Balance b/d 71388 NOTES ¾ The creditors control is used to record all transactions with our creditors in our financial records. ¾ We credit all the things our creditors give us e.g. purchases and the interest they charge us, these transactions increase the amounts owed to our creditors. ¾ We debit the account when we pay them or return goods to them, that is all transactions that reduce our debt to creditors. 85 | P a g e
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FAC1502 2014 86 | P a g e
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FAC1502 2014 SOLUTION 3: ADJUSTMENTS JOURNALS, TRIAL BALANCE AND STATEMENT OF COMPREHENSIVE INCOME N & N ENTERPRISES GENERAL JOURNAL 1. Rent income (2400 ÷ 12) x 7 1400 Income received in advance 1400 2. Accrued income 1060 Interest income 1060 3. Prepaid expenses 3500 Insurance 3500 4. Prepaid expenses 2400 Advertising 2400 5. Salaries 800 Accrued expenses 800 6. Interest expenses (50000X8%*10/12)-3000 333 Accrued expenses 333 7. Depreciation (10%x14000) 1400 Accumulated depreciation : furniture & equipment 1400 87 | P a g e
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FAC1502 2014 3.2 N & N ENTERPRISES Post adjustment trial balance as at December 2010 Dr Cr Capital 130000 Depreciation 1400 Drawings 11000 Accrued income 1060 Mortgage loan 50000 Land & buildings 81000 Furniture & equipment 14000 Accumulated depreciation : furniture 1400 Bank 14000 Inventory 100000 Debtors control 82000 37200 Fixed deposit Creditors 90000 Sales 500000 Purchases 283000 Interest income (800+1060) 1860 Salaries (76000+800) 76800 Water & electricity 10000 Interest expense (3000 +333) 3333 Administration expenses 30000 Property rates and taxes 9600 Creditor losses 2600 Insurance (5000-3500) 1500 Advertising 7400 Freight charges on purchases 5000 Rent income (2400-1400) 1000 Accrued expenses (800+335) 1133 Income received in advance 1400 Prepaid expenses (3500 +2400) 5900 776793 776793 NOTES The post adjustment trial balance is simply prepared through incorporating the journal entries made in the first part of the question. 88 | P a g e
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FAC1502 2014 N & N ENTERPRISES Statement of profit or loss and other comprehensive income for the year ended 31 December 2010 Revenues 500000 Less: Cost of Sales (316000) Opening Inventory 100000 Purchases 283000 Freight charges on purchases 5000 Closing inventory (72000) Gross profit 184000 Other income 2860 Rent income (2400-1400) 1000 1860 Interest income (1060-800) 186860 (139300) Distribution , Administrative & other expenses Advertising (9800-2400) 7400 Insurance (5000-3500) 1500 Credit losses 2600 Administrative expenses 30000 Property rates & taxes 9600 Water & electricity 10000 Salaries (76000+800) 76800 Depreciation 1400 Finance costs Interest on mortgage loan Profit for the year Other Comprehensive Income (3333) (3333) 44227 - Total comprehensive income for the year 44227 89 | P a g e
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FAC1502 2014 SOLUTION 4: DEPRECIATION ON ASSET REALISATION NON TRADERS GENERAL LEDGER Equipment at cost account Balance b/d (120000 + 30000) 150000 Realisation 24000 OB Distributors (54000+3000) Bank 54000 3000 Balance c/d 183000 207000 207000 Balance b/d 183000 90 | P a g e
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FAC1502 2014 Accumulated depreciation: equipment Realisation (4800+3840+768) 9408 Balance b/d (1) 46200 Balance c/d 62848 Depreciation (a) 7600 Depreciation (b) 768 17688 Depreciation (c ) 72256 72256 Balance b/d 62848 Realisation Account Equipment @cost 24000 Accumulated dep. equipment 9408 Profit on sale of equipment 1158 B. Bauwer 15750 25158 25158 CALCULATIONS Balance: Accumulated (Opening) deprecation 01 March 2007: equipment 01 March 2007 – 28 February 20.8 120000 x 20% = 24000 01 March 20.8 - 28 February 20.9 (120000 - 24000) x 20% =
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