4.1 Choose a description from COLUMN B that matches the term in COLUMN A. Write only the letter (A–D) next to the question number (4.1.1–4.1.4) in the ANSWER BOOK, for example 4.1.5 E. 4.1.1 Income Statement 4.1.2 Balance Sheet 4.1.3 Cash Flow Statement 4.1.4 Independent Audit Report 4.2 MTOMBENI LTD The information relates to Mtombeni Limited for the financial year ended 28 February 2017: REQUIRED: 4.2.1 Refer to Information A and B and calculate: - Carrying value of the vehicle sold on 30 November 2016 (5) - Total depreciation on 28 February 2017 (7) 4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017. (54)

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4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1

Question 4

4.1 Choose a description from COLUMN B that matches the term in COLUMN A. Write only the letter (A–D) next to the question number (4.1.1–4.1.4) in the ANSWER BOOK, f... show full transcript

Worked Solution & Example Answer:4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1

Step 1

4.2.1 Carrying value of the vehicle sold on 30 November 2016

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Answer

To find the carrying value of the vehicle sold, we start with the cost price and subtract the accumulated depreciation up to the date of sale.

Cost price of the vehicle: R190,000
Accumulated depreciation on 1 March 2016: R72,000
Additional depreciation for 8 months at 20% per annum on the cost:

$ext{Depreciation} = R190,000 \times 0.20 \times \frac{8}{12} = R25,333.33$
Total accumulated depreciation before sale:

$\text{Total Accumulated Depreciation} = R72,000 + R25,333.33 = R97,333.33$
Thus, the carrying value is:

$\text{Carrying Value} = R190,000 - R97,333.33 = R92,666.67$

Step 2

4.2.1 Total depreciation on 28 February 2017

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Answer

For total depreciation on equipment, we need to consider both the straight-line method for the original vehicle and the diminishing-balance method:

Original Equipment:
- Cost = R250,000
- Accumulated depreciation (using straight-line method for period):
$\text{Depreciation} = R250,000 \times 0.10 = R25,000$
Vehicle:
- From prior calculation: R25,333.33

Total depreciation:

$\text{Total Depreciation} = R25,000 + R25,333.33 = R50,333.33$

Step 3

4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017

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Answer

The Income Statement can be structured as follows:

MTOMBENI LTD

Income Statement for the year ended 28 February 2017

Revenue:

Sales: R5,482,500
Cost of Sales: R3,159,375
Gross Profit: R2,323,125

Other Income:

Rent Income: R186,000
Bad Debt Recovered: R4,750
Total Operating Income: R2,513,875

Expenses:

Directors' Fees: R380,000
Audit Fees: R54,000
Bad Debts: R15,500
Salaries and Wages: R490,250
Consumable Stores: R61,700
Insurance: R19,220
Bank Charges: R7,760
Sundry Expenses: R140,085
Total Operating Expenses: R1,168,515

Operating Profit:

Profit before Interest: R1,345,360

Interest Income: R300,000

Net Profit Before Tax: R1,645,360

Income Tax: R336,000

Net Profit After Tax: R1,309,360

4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1

Worked Solution & Example Answer:4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1

4.2.1 Carrying value of the vehicle sold on 30 November 2016

4.2.1 Total depreciation on 28 February 2017

4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017

MTOMBENI LTD

Income Statement for the year ended 28 February 2017

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