Answer to Question #136408 in Accounting for Nilton

Question

1. The financial year ends annually on 30 June 2020.

2. 60% of all raw materials are purchased for cash and the balance is purchased on credit.

3. Finished goods are sold at cost plus 60%.

4. Indirect raw materials:
On hand on 1 July 2019, R2500.
Purchased during the year, R85000.
Returned to suppliers during the year, R3000.
On hand on 30 June 2020, R32000.

5. Depreciation:
Machinery is depreciated at 20% per annum on cost price. The cost price of the machinery purchased was R960000. Accumulated depreciation written off until 30 June 2019 amounted to R820000.

6. Rent expense:
The rent expense account has a balance of R495000 on 30 June 2020.
Rent expense amounted to R35000 per month from 1 July 2019.
Rent expense increased by R10000 per month effective from 1 April 2020.

Answer 1

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