FINACC1 - Pre Adjustment Trial Balance of Cast Iron ingots - Financial Reports of Quality Furniture - The financial reports of A and B Clothing - Accounting and Finance Assignment Help

FINACC1: Accounting and Finance Assignment Help

Assignment Task:

The accountant reviewed the trial balance and decided that the following adjustments had to be made

1. Depreciation on machinery is 10% straight line on cost

2. Depreciation on vehicles is 20% on a reducing balance basis

3. A specific bad debt of R5,600 has to be written off

4. A provision of 3% is made on the debtors balance

5. An accrual for R12,950 has to be made for telephone costs as the Telkom bill has not been processed

6. The advertising costs above are for December 2018, January 2019 and February 2019

7. Included in the sales above are R22,000 belonging to January 2019

After the journals have processed the pre-adjustment trial balance into a post-adjustment one:

b. Prepare a Statement of comprehensive income (income statement)

c. Prepare a Statement of financial position (Balance sheet)

During the year a machine costing R240,000 with accumulated depreciation of R130,000 was sold for R120,000.

Required
Prepare a cash flow using the direct method and set out note 1 showing the cash from operations in the indirect method.

Question 3

The financial reports of A & B Clothing (Pty) Ltd as at 30 June 2019 are:

Set out ratios for 2019
1. Profitability – 5 ratios
2. Liquidity – 2 ratios
3. Efficiency – 5 ratios
4. Solvency – 3 ratios
5. Market – 4 ratios

Show the formulas and all of your workings. Where applicable take average balances, i.e. (2019+2018) ÷ 2

Abba decided to retire and it was agreed by Mandla & Govender that he could do this but a due diligence needed to be carried out to establish the value of the assets and liabilities in the partnership. After this was carried out values were established:

• Property, plant and equipment should be valued at the market value of R2,850,000

• Vehicles are valued at R1,575,000

• Goodwill is revised upwards to R900,000 for valuation purposes. Once the SOFP is revised the goodwill must be written down to nil and must not be reflected in the revised partnership of Nkosi & Naidoo.

• Inventory is valued at R1,620,000

• A provision for bad debts of R150,000 must be made

• Accounts payable can be settled for R1,620,000

• And finally the provisions are considered unnecessary and written down to nil

The balance owing to Abba must be transferred to a loan account. The loan will bear interest of 10% per annum calculated on the closing balance. The loan must be repaid in full within 3 years.

Required:
Prepare the following:
a) revaluation account on the retirement of Abba from the partnership, and
b) revised Statement of financial position including the capital accounts of Mandla & Govender.

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