Accounting Answers

The following is the budgeted information of Louw Traders: BUDGET 2020 Total Sales R March 900 000 April 1 050 000 May 1 140 000 June 1 200 000 Collections: 40% of sales are cash sales while 35% is collected one month after the sale and the remaining 25% is collected two months after the sale has taken place. Expenses: The expenses are expected to be maintained at 55% of the same month’s sales. Payments: 75% of expenses are paid in cash and 25% are paid one (1) month after incurring the expense. Opening cash balance: The business opening May cash balance is R30 000 Minimum cash balance requirement: The business requires a minimum cash balance of R15 000. Required: Q.6.1 Prepare the cash budget of Louw Traders for the months of May and June 2020. (25)

why is a differentiation made between current liabilities and non-current liabilities.

Dr Inventory 300
Cr Cost of sales 300

Dr Cost sales 250
Cr Retained earnings 250⅞

Dr Tax expense (50 x 30%) 15
Dr Retained earnings (250 x 30%) 75
Cr Tax liability (300 x 30%) 90
.........
How do I give narrations to the above journal entries? Ias8

When a service is rendered on credit, what will the effect be on what accounts

Company's existing costing system uses a single overhead rate. Based on total sales revenue from copy charges, to charge the cost of services department support activities to each size of machine. This service management has suggested that the copy charge should more accurately reflect the cost involved. The company accountants has decided to implement an activity based costing system and has obtained the following information about the support activities of the service department
A. Calculate the annual profit per machine for each of the three sizes of machine, using the current basis for charging the costs of support activities to machines
B. Calculate the annual profit per machine for each of the three sizes of machine using activity based costing

Kolbe Traders had the following transactions which took place during the

month of January 2020:

Date Transaction

5 Raised a loan of R150 000 with Scrum Bank. The money was

deposited in the bank account on the same day.

10 Stationery was purchased from Papadi Store at a cash price of

R20 000 and paid via EFT.

17 Stationery was purchased. Cheque X5 was drawn with an

amount of R10 000.

Required:

Record the transactions above in the relevant General Ledger Accounts of

Kolbe Traders for January 2020.

describe how the statement of financial performance shows if the internal controls implemented are working?

Bean Ldt is a division of Earl enterprise and has been allocated R5m for capital expansion in the forth-coming year.The management of Bean believes that the company must spread its risk by investing in projects with different risk profiles and has identified two possible investments.The capital to Bean is sufficient to invest in only one of the projects.Economic growth 0%,3%and6%.probability of occurance 0.3,0.4and0.3.Estimated return:project1 14,10and 8 Project2:8,18and22.Existing investment 6,12and16.Book value R5m, R5m and R10m.Market value R5m,R5and R15m.The division manager has requested the accounted to determine which of the two projects should be accepted using the portfolio theory. Required:1.calculate which investment should be selected in line with the portfolio management theory. 2.identify and describe the kind of risk the management of Bean Ltd wishes to spread by investing in different investments and state whether they should be concerned about reducing such risk.

Some categorization of cost drivers provide hierarchical models: 1.unit-level activities;2.batch activities;3.product-sustaining activities ;4.facility - sustaining activities. Other analysis focuses on value adding and non-value adding activities. Requirements:explain what is meant by non-value adding activities and discuss the usefulness of this form of analysis.

Explain the marits and problems of using the return on investments, residual income and economic value added methods.