How often Financial statements is asked

Where it was asked

• May/Jun 201435 marks
• Oct/Nov 201330 marks
• May/Jun 201328 marks

The questions

1. May/Jun 2014, Q4.128 marks

   RG Stores supplied the following pre-adjustment trial balance as at 28 February 2014, drawn from its financial records for the year then ended. Financial position section (debit unless shown as credit): Capital at 1 March 2013 – credit R390 000; Drawings – R50 000; Land and buildings – R680 000; Vehicles – R350 000; Equipment – R400 000; Accumulated depreciation on vehicles – credit R70 000; Accumulated depreciation on equipment – credit R40 000; Debtors control – R30 000; Creditors control – credit R16 650; Inventory – R54 000; Bank – R45 000; Petty cash – R1 500; Cash float – R2 500. Nominal accounts section: Sales – credit R1 954 000; Cost of sales – R760 000; Sales returns – R5 000; Rental income – credit R32 500; Stationery – R3 500; Bank charges – R300; Insurance – R6 750; Wages and salaries – R48 000; Water and electricity – R24 000; Telephone expenses – R36 000; Settlement discount granted – R700; Settlement discount received – credit R900; Advertising – R4 800; Credit losses – R2 000. Both the debit and credit columns total R2 504 050. The following additional information must also be taken into account: (a) a physical inventory count performed on 28 February 2014 showed inventory on hand of R52 000 and stationery on hand of R500; (b) the account of Mrs A Singh for R1 500 must be written off as irrecoverable and an allowance for credit losses of R3 000 must be created; (c) depreciation must be provided at 10% per annum on the straight-line method on equipment and at 20% per annum on the reducing-balance method on vehicles; (d) on 1 October 2013 RG Stores agreed to rent out a section of its building to a customer at a monthly rental of R6 500 payable on the 1st of every month – the tenant paid R32 500 to RG Stores on 1 November 2013 but only took occupation of the building on 1 December 2013; (e) the insurance figure includes a prepaid amount of R1 350; and (f) a water and electricity account of R1 500 remains outstanding as at 28 February 2014. Using the pre-adjustment trial balance and additional information (a) to (f) given for RG Stores, prepare the statement of profit or loss and other comprehensive income for RG Stores for the year ended 28 February 2014.

2. May/Jun 2014, Q4.27 marks

   RG Stores supplied the following pre-adjustment trial balance as at 28 February 2014, drawn from its financial records for the year then ended. Financial position section (debit unless shown as credit): Capital at 1 March 2013 – credit R390 000; Drawings – R50 000; Land and buildings – R680 000; Vehicles – R350 000; Equipment – R400 000; Accumulated depreciation on vehicles – credit R70 000; Accumulated depreciation on equipment – credit R40 000; Debtors control – R30 000; Creditors control – credit R16 650; Inventory – R54 000; Bank – R45 000; Petty cash – R1 500; Cash float – R2 500. Nominal accounts section: Sales – credit R1 954 000; Cost of sales – R760 000; Sales returns – R5 000; Rental income – credit R32 500; Stationery – R3 500; Bank charges – R300; Insurance – R6 750; Wages and salaries – R48 000; Water and electricity – R24 000; Telephone expenses – R36 000; Settlement discount granted – R700; Settlement discount received – credit R900; Advertising – R4 800; Credit losses – R2 000. Both the debit and credit columns total R2 504 050. The following additional information must also be taken into account: (a) a physical inventory count performed on 28 February 2014 showed inventory on hand of R52 000 and stationery on hand of R500; (b) the account of Mrs A Singh for R1 500 must be written off as irrecoverable and an allowance for credit losses of R3 000 must be created; (c) depreciation must be provided at 10% per annum on the straight-line method on equipment and at 20% per annum on the reducing-balance method on vehicles; (d) on 1 October 2013 RG Stores agreed to rent out a section of its building to a customer at a monthly rental of R6 500 payable on the 1st of every month – the tenant paid R32 500 to RG Stores on 1 November 2013 but only took occupation of the building on 1 December 2013; (e) the insurance figure includes a prepaid amount of R1 350; and (f) a water and electricity account of R1 500 remains outstanding as at 28 February 2014. Using the pre-adjustment trial balance and additional information (a) to (f) given for RG Stores, prepare the statement of changes in equity for RG Stores for the year ended 28 February 2014.

3. Oct/Nov 2013, Q4.17 marks

   Selepe Traders is a sole proprietor that uses the periodic inventory system. Its pre-adjustment trial balance as at 31 July 2013 reflects the following balances: Capital R500 000 (credit); Drawings R25 000 (debit); Mortgage – ABC Bank R300 000 (credit); Land and buildings at cost R350 000 (debit); Vehicles at cost R145 000 (debit); Equipment at cost R85 000 (debit); Accumulated depreciation – Vehicles R29 000 (credit); Accumulated depreciation – Equipment R17 000 (credit); Inventory (Merchandise) as at 1 August 2012 R125 000 (debit); Debtors control R115 450 (debit); Bank R49 600 (debit); Petty cash R5 000 (debit); Creditors control R95 690 (credit); SARS – VAT R14 235 (debit); Allowance for credit losses R7 300 (credit); Sales R732 615 (credit); Purchases R365 000 (debit); Freight on purchases R45 000 (debit); Sales returns R35 415 (debit); Import tariffs R9 300 (debit); Custom duties R6 750 (debit); Salaries R225 000 (debit); Advertisements R12 300 (debit); Rental income R21 450 (credit); Settlement discount received R5 210 (credit); Settlement discount granted R3 300 (debit); Interest on fixed deposit R3 410 (credit); Profit on sale of non-current asset R15 500 (credit); Motor expenses R18 945 (debit); Credit losses recovered R9 300 (credit); Interest on mortgage R28 750 (debit); Consumable stores purchased during the year R16 000 (debit); Telephone expenses R19 600 (debit); Insurance R9 000 (debit); and Water and electricity R27 830 (debit). Both the debit and credit columns total R1 736 475. The following additional information applies: (1) Selepe Traders is a sole proprietor and applies the periodic inventory system. (2) A physical inventory count at 31 July 2013 revealed merchandise on hand of R185 000 and consumable stores on hand of R8 300. (3) The allowance for credit losses must be adjusted to R8 500 as at 31 July 2013. (4) Credit losses of R1 500 must be written off for the year. (5) An insurance premium of R9 000 was paid on 1 August 2012 to cover an 18-month period. (6) Total rental income received during the year was R21 450, with the tenant paying R1 650 per month. (7) Depreciation must be provided as follows: Vehicles at 20% per annum on the reducing/diminishing balance method, and Equipment at 20% per annum on the straight-line method. (8) The water and electricity account of R2 756 relating to July 2013 was only paid during August 2013. Using the trial balance and additional information given for Selepe Traders, show the full cost of sales calculation for the year ended 31 July 2013, ensuring that all workings are shown and not just a single final figure.

4. Oct/Nov 2013, Q4.223 marks

   Selepe Traders is a sole proprietor that uses the periodic inventory system. Its pre-adjustment trial balance as at 31 July 2013 reflects the following balances: Capital R500 000 (credit); Drawings R25 000 (debit); Mortgage – ABC Bank R300 000 (credit); Land and buildings at cost R350 000 (debit); Vehicles at cost R145 000 (debit); Equipment at cost R85 000 (debit); Accumulated depreciation – Vehicles R29 000 (credit); Accumulated depreciation – Equipment R17 000 (credit); Inventory (Merchandise) as at 1 August 2012 R125 000 (debit); Debtors control R115 450 (debit); Bank R49 600 (debit); Petty cash R5 000 (debit); Creditors control R95 690 (credit); SARS – VAT R14 235 (debit); Allowance for credit losses R7 300 (credit); Sales R732 615 (credit); Purchases R365 000 (debit); Freight on purchases R45 000 (debit); Sales returns R35 415 (debit); Import tariffs R9 300 (debit); Custom duties R6 750 (debit); Salaries R225 000 (debit); Advertisements R12 300 (debit); Rental income R21 450 (credit); Settlement discount received R5 210 (credit); Settlement discount granted R3 300 (debit); Interest on fixed deposit R3 410 (credit); Profit on sale of non-current asset R15 500 (credit); Motor expenses R18 945 (debit); Credit losses recovered R9 300 (credit); Interest on mortgage R28 750 (debit); Consumable stores purchased during the year R16 000 (debit); Telephone expenses R19 600 (debit); Insurance R9 000 (debit); and Water and electricity R27 830 (debit). Both the debit and credit columns total R1 736 475. The following additional information applies: (1) Selepe Traders is a sole proprietor and applies the periodic inventory system. (2) A physical inventory count at 31 July 2013 revealed merchandise on hand of R185 000 and consumable stores on hand of R8 300. (3) The allowance for credit losses must be adjusted to R8 500 as at 31 July 2013. (4) Credit losses of R1 500 must be written off for the year. (5) An insurance premium of R9 000 was paid on 1 August 2012 to cover an 18-month period. (6) Total rental income received during the year was R21 450, with the tenant paying R1 650 per month. (7) Depreciation must be provided as follows: Vehicles at 20% per annum on the reducing/diminishing balance method, and Equipment at 20% per annum on the straight-line method. (8) The water and electricity account of R2 756 relating to July 2013 was only paid during August 2013. Using the trial balance and additional information given for Selepe Traders, prepare the statement of profit or loss and other comprehensive income of Selepe Traders for the year ended 31 July 2013.

5. May/Jun 2013, Q4.13.5 marks

   PureSurprise Traders' accounting records showed the following balances and totals as at 28 February 2013, the end of the entity's financial period: capital R97 500; drawings R30 450; land and buildings R107 826; equipment R60 000; vehicles R30 000; accumulated depreciation on equipment (as at 1 March 2012) R6 000; accumulated depreciation on vehicles (as at 1 March 2012) R10 800; debtors control R15 000; bank (debit balance) R14 350; creditors control R5 500; cost of sales R200 000; sales returns R1 500; settlement discount granted R600; water and electricity R7 500; telephone expenses R5 000; salaries R21 000; insurance R11 050; stationery R2 500; rental income R45 500; and advertising R8 524. Additional information: (1) Included in the above balances are the following - (1.1) PureSurprise Traders uses a mark-up of 75% on cost to work out its selling prices; (1.2) the entity charged rent of R3 500 per month throughout the year; (1.3) the insurance figure includes R850 relating to the insurance premium for March 2013 (i.e. the following period). (2) Depreciation still needs to be provided for the year on equipment at 10% using the straight-line method and on vehicles at 20% using the reducing balance (diminishing balance) method; no equipment or vehicles were bought or sold during the current financial year. Using the information given for PureSurprise Traders, calculate the revenue (sales) figure for the year ended 28 February 2013. Show all calculations.