CXC principles of accounts June 2013 Answers

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

Insurance

7 100

Less insurance prepaid

(1 800 )

16 300 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)

2.

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

(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 Discount received Set off

100 300 2 500 620

Balance c/d

Refund

1 180

Cheque returned

3 300

Received from creditor

284

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 Suspense Account Payment to creditors overstated by 270 in Bank Account

270 270

3. (a) i. current asset current liabilities

$12 000 x =

2 1

current assets as at June 2011 = $6 000

ii. current asset current liabilities

$60 000 x

4 1

current liabilities as at June 2012 = $15 000 (b)

i. Average stock = Opening Stock + Closing Stock 2

ii. Stock turn average stock =

= cost of good sold $5600 = 21.9 times

iii. Gross profit percentage

=

= 6 800 + 4 400 2 = $5600

$122 800

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 Current assets

125 000 60 000

$

$ Capital

71 600

Add Net Profit

69 900

Less Drawings

(23 900)

$

117 600 Total liabilities 185 000

67 400 185 000

(d)

return on capital employed = Net profit Capital employed (total assets – current liabilities) =

$69 900 $170 000 ($185 000 – $15 000) = (e)

100 X

1

41.12%



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) Purchases of raw material 4 500 metres at 19 - 85 500 2 150 metres at 24 – 51 600

$

$

5 700

137 100

Less:- Returns outwards of raw material 100 metres at $24 per metre

(2400)

Add:- Carriage on raw material

3 400

138 100 143 800

Less Inventory c/f (340 x 24)

(8160)

Cost of material consumed

4b

135640

Statement showing cost of direct material Direct labour(wages) Cutters (4 500 x15 ) Stitchers (4 120 x 12) Pressers(4 000 x 5 )

67 500 49 440 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

Jones

$30 x 40 $30 x 1.5 x 6

8 10 1200 270

1470

5b A Employees Gross Pay B/f $

B

C

D

E

Social Security $

Taxable Pay $

Income Tax $

Net Pay $

Mark

8 10

40.50

769.50

76.95

692.55

John

1470

73.50

1396.50

139.65

1256.85

Working Social Security mark 810 x 5% = 40.50 John 1470 x 5% = 73.50

Income Tax Mark 769.50 x 10% = 76.95 John 1396.50 x 10% = 139.65

6i

Fixed Assets of Sautec Credit Union