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Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Question 4
Choose an explanation in COLUMN B that matches the term in COLUMN A. Write only the letters (A–E) next to the question numbers (4.1.1 to 4.1.5) in the ANSWER BOOK. ... show full transcript
Worked Solution & Example Answer:Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Step 1
4.2.1 Amounts for (ii) and (iii) in the Fixed Assets Register
Answer
To calculate these amounts, we need to identify the fixed asset disposals and the carrying value. From the provided information, the loss on the sale of the asset is indicated as $7,500 and the carrying value for fixed assets as of 28 February 2019 needs to be calculated based on adjustments in the register.
Step 2
4.2.2 Calculate the correct net profit after tax for the year ended 28 February 2019
Answer
The initial incorrect net profit before tax is $282,700. We need to make the following adjustments:
- Provision for bad debts adjustment: (− $65,000)
- Advertising: (+ $9,800)
- Rent income: (− $28,000)
- Additional depreciation adjustment: (− $37,000)
- Profit on sale of asset: (+ $7,500)
- Income tax adjustment: (− $198,000)
The correct net profit after tax is calculated as follows:
Step 3
4.2.3 Prepare the Retained Income Note on 28 February 2019
Answer
The Retained Income Note is prepared by starting with the beginning balance and adjusting based on net profit and dividend payments. The calculations are as follows:
- Balance at beginning: $865,300
- Net profit after tax: +$511,500
- Dividends declared (ordinary and interim): − $783,200
The ending balance of retained income will be:
Step 4
4.2.3 Prepare the Statement of Financial Position (Balance Sheet)
Answer
The Statement of Financial Position lists the company's assets, liabilities, and equity.
Assets:
- Non-current assets: $10,624,000
- Current assets: $2,320,000
- Total Assets: $12,944,000
Equity and Liabilities:
- Ordinary shareholders' equity: $8,637,600
- Total Equity: $12,944,000
This information allows for assessing the company’s financial position as of 28 February 2019.