4.1 Choose the correct cost concepts from those given in brackets - English General - NSC Accounting - Question 4 - 2023 - Paper 2

Using the formula:

ext{Holding Period} = rac{ ext{Closing Stock}}{ ext{Average Daily Sales}}

Here, Average Daily Sales for Hawi:

• Units Sold = 300
• Stock Holding Period = 151.2 days

The calculation is:

ext{Days to Sell Hawi} = rac{255}{rac{300}{151.2}}

This yields approximately 127 days for the remaining stock of Hawi.

Sipho should be concerned about the stockholding periods.

• Hawi has a much longer stockholding period of 152.1 days, indicating slow sales and possible obsolescence. This could lead to increased carrying costs or potential losses if the stock becomes outdated.
• Yama, however, sells more quickly with a holding period of only 55.2 days, indicating strong demand.

This discrepancy suggests Hawi may need marketing strategies or pricing adjustments to improve its sales performance.

To find the cost price of vehicles:

• Cost Price = R930,000 - R260,000 + R180,000 = R850,000.

The bookkeeper's method is incorrect because the asset is almost fully depreciated. The R75,000 cannot be recognized as it would lead to a negative carrying value.

Calculation of Accumulated Depreciation:

If the cost was R300,000 and the vehicle is disposed, the calculated depreciation should not allow any carrying value below R1,000:

$ext{Remaining Value} = R300,000 - R262,500 = R37,500$

1. Donating the computers can enhance the company's image in the community, which can improve goodwill and possible customer relations.
2. It provides an opportunity to be involved in corporate social responsibility (CSR), demonstrating a commitment to education and community development.