Accounting for Business
QUESTION 1 25 MARKS
The following is Whisky Traders’ Trial Balance at the end of its first year of trading, 31 August 2010:
R R
DR CR
Bank Overdraft 93 000
Buildings 500 000
Capital ?
Petty Cash 3 000
Creditors Control 50 000
Debtors Control 60 000
Equipment 90 000
Investments 90 000
Long term Loans 200 000
Motor Vehicles 120 000
Inventory 200 000
Retained Earnings 420 000
1 063 000 1 063 000
However the following transaction has not yet being taken into account:
• A delivery vehicle with a book value of R 52 000 (initial cost of the vehicle was R 69 333) was involved in an accident and the insurance company’s assessors determined that the vehicle was beyond repair. An amount of R 30 000 was paid by the insurance company directly to the creditor, being the total amount owed on the vehicle at the time of the accident. Required
1. Prepare the Asset Disposal Account in the General Ledger of Whiskey
Traders taking the transaction above into account and determine the loss or profit on disposal of the motor vehicle.
2. Prepare and balance the Creditors Control Account in the General ledger of Whiskey Traders taking the transaction above into account.
3. Prepare the statement of Financial Position and determine the amount of Capital.
QUESTION 2 5 MARKS
On the 31 December 2010 furniture, amongst others, was damaged when one of
Beef Distributor’s’ freezers malfunctioned and flooded the offices. The furniture was recorded in the fixed asset register of Bees Distributors as follows: Purchase date 1 January 2006
Cost R 15 000
Book value as at 30 June 2010 (year-end) R 1 500
Rate and method of depreciation 20% p/a on cost
Beef Distributors was able to sell the damaged furniture for R 2 000.
Required
1. Prepare the Asset Disposal account in the General ledger of Beef
Distributors and determine the profit or loss upon disposal.
QUESTION 3 10 MARKS
At 31 August 2010 Daniel Dealers is in the process of reconciling its Creditors
Ledger
The following is Whisky Traders’ Trial Balance at the end of its first year of trading, 31 August 2010:
R R
DR CR
Bank Overdraft 93 000
Buildings 500 000
Capital ?
Petty Cash 3 000
Creditors Control 50 000
Debtors Control 60 000
Equipment 90 000
Investments 90 000
Long term Loans 200 000
Motor Vehicles 120 000
Inventory 200 000
Retained Earnings 420 000
1 063 000 1 063 000
However the following transaction has not yet being taken into account:
• A delivery vehicle with a book value of R 52 000 (initial cost of the vehicle was R 69 333) was involved in an accident and the insurance company’s assessors determined that the vehicle was beyond repair. An amount of R 30 000 was paid by the insurance company directly to the creditor, being the total amount owed on the vehicle at the time of the accident. Required
1. Prepare the Asset Disposal Account in the General Ledger of Whiskey
Traders taking the transaction above into account and determine the loss or profit on disposal of the motor vehicle.
2. Prepare and balance the Creditors Control Account in the General ledger of Whiskey Traders taking the transaction above into account.
3. Prepare the statement of Financial Position and determine the amount of Capital.
QUESTION 2 5 MARKS
On the 31 December 2010 furniture, amongst others, was damaged when one of
Beef Distributor’s’ freezers malfunctioned and flooded the offices. The furniture was recorded in the fixed asset register of Bees Distributors as follows: Purchase date 1 January 2006
Cost R 15 000
Book value as at 30 June 2010 (year-end) R 1 500
Rate and method of depreciation 20% p/a on cost
Beef Distributors was able to sell the damaged furniture for R 2 000.
Required
1. Prepare the Asset Disposal account in the General ledger of Beef
Distributors and determine the profit or loss upon disposal.
QUESTION 3 10 MARKS
At 31 August 2010 Daniel Dealers is in the process of reconciling its Creditors
Ledger