Accounting Answers

 On 1 April 2015, BB (Pty) Ltd acquired a label (trademark) to use for its clothing. The label is a renowned to use for its clothing. The label is renowned internationally. The cost of label was R875 000. The estimated useful life of the trademark is 10 years. On 1 March 2017, it was estimated that the remaining useful life is 6 years. On 28 February 2019, it was determined that the recoverable amount of the trademark is R250 000 and the remaining useful life remained unchanged.

Questions.

Recognise the all the transactions above as journal in the accounting records of BB (Pty) Ltd which relate to the trademark. 

Mist (Pty) Ltd is a company with a reporting period of 30 June. Currently the company’s accountant is preparing the financial statements for the year ending 30 June 2019.

Mist (Pty) Ltd operates from a building it is leasing from a property developer. Mist (Pty) Ltd occupied the building on 1 July 2016 and pays monthly rental. The monthly rentals as from 1 July 2017 are R14 000 and there is an 10% annual increase. The lease agreement is for four years.

REQUIRED

1.1      Provide the necessary journal entries for the reporting of 30 June 2019. 

Mist (Pty) Ltd is a company with a reporting period of 30 June. Currently the company’s accountant is preparing the financial statements for the year ending 30 June 2019.

Mist (Pty) Ltd operates from a building it is leasing from a property developer. Mist (Pty) Ltd occupied the building on 1 July 2016 and pays monthly rental. The monthly rentals as from 1 July 2017 are R14 000 and there is an 10% annual increase. The lease agreement is for four years.

REQUIRED

1.1      Provide the necessary journal entries for the reporting of 30 June 2019. 

On 1 April 2015, BB (Pty) Ltd acquired a label (trademark) to use for its clothing. The label is a renowned to use for its clothing. The label is renowned internationally. The cost of label was R875 000. The estimated useful life of the trademark is 10 years. On 1 March 2017, it was estimated that the remaining useful life is 6 years. On 28 February 2019, it was determined that the recoverable amount of the trademark is R250 000 and the remaining useful life remained unchanged.

REQUIRED

Recognise the all the transactions above as journal in the accounting records of BB (Pty) Ltd which relate to the trademark.(show workings)

AA Entity and all its suppliers are registered VAT vendors. Where applicable, VAT is charged at 15%.

AA Entity sells crockery at a mark-up percentage of 25% gross profit on cost price. AA Entity is insured for potential inventory losses due to fire for an amount of R218 500 (including VAT).

On 21 July 2019, a fire broke out in the store room of AA Entity which destroyed almost all of AA Entity’s trade inventories, except for trade inventories with a cost price of R80 000 that the entity could salvage. This salvaged trade inventory items are still in a very good condition and will be sold at the normal selling price.

AA Entity uses the periodic inventory system and therefore does not know what the value of trade inventories on hand was on 21 July 2019. The last inventory count was performed at the reporting date on 30 June 2019 and the inventory records reflected trade inventories on hand at a cost price of R341 000 on that date.

The total value of supplier’s invoices for trade inventories purchased since the reporting date until the date of the fire, amounted to R59 280. The total value of sales invoices made out to customers since the reporting date until the date of the fire amounted to R159 600.

REQUIRED

1. Calculate the value of the insurance compensation that will probably be paid by the insurance company in respect of the trade inventories destroyed in the fire.

Mist (pty) Ltd is a company with a reporting period of 30 june. Currently the company's accountant is preparing the financial statements for the year ending 30 june 2019. Mist (pty) Ltd operates from a building it is leasing from a property developer. Mist (Pty) Ltd occupied the building on 1 july 2016 and pays monthly rental. The monthly rentals as from 1 july 2017 are R14 000 and there is an 10% annual increase .the lease agreement is for 4 years.

Question.

1. Provide necessary journal entries for the reporting of 30 june 2019.