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JUNE 2013

1. a)

ConEct
Income Statement for the year ended 31 January 2012

Income
Sales commissions received 115 500
Add sales commissions outstanding 14 100

129 600
Less Expenses
Rent 13 300
Add Rent owing 3 000 16 300
Insurance 7 100
Less insurance prepaid (1 800 ) 5300
Delivery expenses 11 500
Salesmen's wages 46 700
Loan interest 5 500
Depreciation (60 000-12 000 = 48 000 * 20%) 9600
(94 900)
Net Profit 34 700
1. b)
ConEct
Classified Balance Sheet as at 31 January 2012

Fixed Assets
Delivery van at cost 60 000
Less accumulated depreciation (12 000 + 9600) (21 600)
38 400

Current Assets
Bank 121 400
Sales commissions outstanding 14 100
Insurance prepaid 1 800
137 300
Less Current Liabilities
Rent owing (3 000)
Working Capital 134 300
172 700

Financed By
Capital 88 000
Add Net Profit 34 700
122 700

Long Term liabilities


5-year bank loan 50 000
172 700
2. (a) The table below shows sources of the Debtors' Control Accounts.

Source of Information Book of Original Entry


Total refund to debtors Cash Book
Total dishonored cheques Cash Book
Total credit sales Sales Journal
Total returns inwards Returns Inwards Journal
Receipts from debtors Cash Book
Total discounts allowed Cash Book
Total bad debt General Journal

2. (b)
L. Somerset
Purchases Ledger Control Account for for the month of October

Balance b/d 1 450 Balance b/d 25 400


Returns Outwards 1 200 Purchases 123 900
Payments to creditors 100 300 Refund 1 180
Discount received 2 500 Cheque returned 3 300
Set off 620 Received from creditor 284
Balance c/d 47 994
154 064 154 064

2. (c)
General Journal

$ $
i Equipment 2 100
Purchases 2 10
Correction of error where by Equipment
was debited to Purchases Account

ii Bank Account 270


Suspense Account 270
Payment to creditors overstated by 270 in
Bank Account
3. (a)
i.

current asset $12 000 2


current liabilities x = 1

current assets as at June 2011 = $6 000

ii.

current asset $60 000 4


current liabilities x 1

current liabilities as at June 2012 = $15 000

(b)

i. Average stock = Opening Stock + Closing Stock = 6 800 + 4 400


2 2 = $5600

ii. Stock turn = cost of good sold $122 800


average stock = $5600 = 21.9 times

iii. Gross profit percentage = Gross Profit 100 $131 600


Sales X 1 = $250 000

= $0.5264 X 100 = 52.64%

(c)
Balance sheet for Reisse Holding as at 30 June 2012.

$ $ $ $
Fixed assets 125 000 Capital 71 600
Add Net Profit 69 900
Current assets 60 000 Less Drawings (23 900)
117 600
Total liabilities 67 400
185 000 185 000
(d) return on capital employed = Net profit
Capital employed (total assets – current liabilities) =

$69 900 100


$170 000 ($185 000 – $15 000) X 1

= 41.12%

(e)
 The rate of stock turnover for this company was 22 times this means that stock
is used or sold out and replaced 22 times a year.

 For Reisse Holding 41.12% of sales is left over after paying cost of goods sold

 shows how effectively assets are performing while taking into consideration
long-term financing.

4a
Statement showing Cost of material consumed
$ $ $
Inventory b/f (300 x 19) 5 700
Purchases of raw material
4 500 metres at 19 - 85 500
2 150 metres at 24 – 51 600 137 100
Less:- Returns outwards of raw material (2400)
100 metres at $24 per metre
Add:- Carriage on raw material 3 400 138 100
143 800
Less Inventory c/f (340 x 24) (8160)
Cost of material consumed 135640

4b
Statement showing cost of direct material
Direct labour(wages)
Cutters (4 500 x15 ) 67 500
Stitchers (4 120 x 12) 49 440
Pressers(4 000 x 5 ) 20 000
136 940
4c
Manufacturing Account for the year ended 31 December 2012
$ $ $
Cost of material consumed 135 640
Cost of direct material 136 940
Direct Expenses 8 900
Prime Cost 281 480
Factory overhead
Salary of factory manager 38 050
Factory power 8 400
General factory expenses 18 050
Annual depreciation on plant and machinery 1 600
66 100
Add Wip b/f 2 010
Less Wip c/f (3 790)
(1 780)
Cost of production 345 800

5a
Gross Pay
Mark $30 x 27 8 10
Jones $30 x 40 1200
$30 x 1.5 x 6 270 1470

5b
A B C D E
Employees Gross Pay B/f Social Taxable Pay Income Tax Net Pay
$ Security $ $ $
$
Mark 8 10 40.50 769.50 76.95 692.55
John 1470 73.50 1396.50 139.65 1256.85

Working
Social Security Income Tax
mark 810 x 5% = 40.50 Mark 769.50 x 10% = 76.95
John 1470 x 5% = 73.50 John 1396.50 x 10% =
139.65
6i Fixed Assets of Sautec Credit Union

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