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Vincent’s Traders, Deep Blue Traders, Siesta Dealers Accounting Statement - Accounting Assignment Help
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Assignment Task -
QUESTION 1
Vincent’s Traders was established on 1 January 2020 by Mrs. Katy Vincent. She deposited R600 000 as capital to start trading in cleaning products.
The following transactions occurred during January 2020:
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3 |
A loan from ABC Bank was approved to finance the business. The amount is R200 000. |
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5 |
Five cleaning equipment units were purchased at an amount of R65 000 each. A deposit of R10 000 for each unit was paid immediately by cheque, and the rest was still outstanding at the end of the month. |
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6 |
Delivery costs were paid to deliver the equipment to the business premises: R5 650. |
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10 |
Services to the amount of R22 000 were rendered on credit to Miss Brown. |
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15 |
Rent to the amount of R5 500 was paid per cheque. |
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25 |
Vincent’s Traders paid the first loan installment of R3 333 and also paid interest of R1 630 on the loan. |
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26 |
Received R8 000 as part payment for the services rendered on credit to Miss Wilson. |
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28 |
Advertisement costs of R2 410 for an advert placed in the local newspaper were still outstanding at the end of the month. |
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31 |
Salaries and wages of R15 000 were paid to employees. |
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31 |
Coffee, tea, milk and sugar to an amount of R1 960 were purchased with cash. |
The following transactions must still be taken into account on 31 July 2019:
1. An old vehicle was sold on 31 July 2019 for R33 300. The vehicle was bought eight years ago on 1 August for R110 000. The vehicle was depreciated at a straight-line rate of 20% per annum. Mr. Kabelo omitted the cost and accumulated depreciation when he prepared the trial balance. No entry was made for the transactions.
2. A debtor owing the company R8 500 is bankrupt. R4 250 was received from his estate; the remainder must be written off. Allowance for credit losses must be 5% of the outstanding debtors. No entry was made for the transactions.
3. Mr. Kabelo deposited R500 000 in the current account of the firm as an extra capital contribution.
4. Pays the municipality R2 850 for a trade license.
5. Buy stationary from BNM Wholesalers on credit for R5 035 minus a 10% trade discount.
6. Receives a credit invoice from Pack & Go for packaging material R6 510. 7. Pay POL Wholesalers’ account R10 750.
QUESTION 2
The following extract has been taken out of the books of Deep Blue Traders on 31 July 2019.
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DR |
CR |
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Capital |
500 000 |
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Drawings |
120 000 |
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Creditors |
15 000 |
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Bank overdraft |
38 900 |
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Delivery vehicle at cost |
248 000 |
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Accumulated depreciation on delivery vehicles (01/08/2018) |
8 000 |
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Allowance for credit losses |
3 000 |
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Debtors |
35 000 |
QUESTION 3
The following balances were taken from the accounting records of Siesta Dealers on 31 December 2019, the financial year-end.
Siesta Dealers makes use of the periodic inventory system.
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DR |
CR |
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Capital |
900 000 |
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Drawings |
250 000 |
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Long term loan: FED Bank |
150 000 |
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Vehicles at cost |
650 000 |
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Equipment at cost |
310 000 |
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Accumulated depreciation: vehicles (01/01/2019) |
290 000 |
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Accumulated depreciation: equipment (01/01/2019) |
78 000 |
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Trading inventory (01/01/2019) |
649 230 |
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Stationery on hand (01/01/2019) |
2 740 |
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Debtors control |
322 000 |
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Provision for credit losses |
25 950 |
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Bank overdraft |
114 336 |
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Cash on hand |
2 500 |
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Creditors control |
423 000 |
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Sales |
6 200 000 |
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Purchases |
2 830 000 |
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Discount received |
8 000 |
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Commission received |
15 000 |
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Carriage on purchases |
40 000 |
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Rent expense |
120 000 |
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Interest on loan |
15 000 |
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Stationery |
7 620 |
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Wages |
75 000 |
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