QUESTION 1: FIXED ASSETS AND STATEMENT OF COMPREHENSIVE INCOME
The information relates to Robbie Ltd for the financial year ended 28 February 2021:
REQUIRED:
1.1 Refer to INFORMATION B(a) for fixed assets - NSC Accounting - Question 1 - 2020 - Paper 1
Question 1
QUESTION 1: FIXED ASSETS AND STATEMENT OF COMPREHENSIVE INCOME
The information relates to Robbie Ltd for the financial year ended 28 February 2021:
REQUIRED:
... show full transcript
Worked Solution & Example Answer:QUESTION 1: FIXED ASSETS AND STATEMENT OF COMPREHENSIVE INCOME
The information relates to Robbie Ltd for the financial year ended 28 February 2021:
REQUIRED:
1.1 Refer to INFORMATION B(a) for fixed assets - NSC Accounting - Question 1 - 2020 - Paper 1
Step 1
1.1.1 The missing amounts denoted by (i) to (iii) on the Fixed Asset Note
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To calculate the missing amounts on the Fixed Asset Note, follow these steps:
Calculate the carrying value of the vehicle on hand on 1 March 2020:
The formula is:
CV=Cost−AccumulatedDepreciation
Substituting the values gives:
CV=460,000−396,750=63,250
Calculate the depreciation on vehicles for the year:
The depreciation is computed using this formula: Depreciation=25,500+63,249
Which results in: Depreciation=25,500+63,249=88,749
For the carrying value of the equipment sold, you can follow:
The formula is again: CV=Cost−AccumulatedDepreciation
Using the respective values results in:
Based on the indicated calculations, the carrying value amounts can be derived.
Step 2
1.1.2 Profit/Loss on the sale of equipment on 1 October 2020
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To determine the profit or loss on the sale of equipment, use the formula: Profit/Loss=SalePrice−CarryingValue.
Assuming a sale price of 40,000 and carrying value of 33,920, we can compute: Profit/Loss=40,000−33,920=6,080.
This indicates a profit of 6,080 on the sale of the equipment.
Step 3
1.2 Refer to INFORMATION B(e) for trading stock. Calculate the trading stock deficit.
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To calculate the trading stock deficit, apply the formula: Deficit=(OpeningStock+Purchases)−ClosingStock.
Using the provided figures:
Opening Stock: 280
Closing Stock: 262
The calculation results in:
ightarrow ext{Resulting in a deficit of R72,900}$$.
Step 4
1.3 Prepare the Statement of Comprehensive Income for the financial year ended 28 February 2021.
98%
120 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To prepare the Statement of Comprehensive Income, follow these sections:
Sales: Total sales amounts to 15,325,200.
Cost of Sales: With a calculated cost of 6,966,000.
Gross Profit: Derived by subtracting the cost from sales, thus:
GrossProfit=15,325,200−6,966,000=8,359,200
Operating Expenses: List and total the various expenses, which totals 6,288,260.
Profit before tax: Calculated by:
Profitbeforetax=GrossProfit−OperatingExpenses
Evaluating gives:
8,359,200−6,288,260=2,070,940
Net Profit after tax can be calculated from the profit before tax by applying the tax rate.
