Accounting Answers

The following balances appeared in the records of a company on 28 February 2012, the end of the financial year: Vehicles 330 000 Accumulated depreciation: Vehicles 75 000 INSTRUCTIONS: Complete the extract from the PPE Note at the end of the financial year, 28 February 2012, after taking the following transactions in consideration: 1. On 30 Nov 2011 a vehicle, bought on 1 July 2009 for R110 000, was sold on credit, for R55 000. Depreciation was provided for on the diminishing balance method at 25% p.a. on all vehicles, unless otherwise stipulated. 2. A new delivery vehicle, with an estimated life of 4 years and a residual value of R15 000, was purchased on 1 Sept 2011 for R135 000. An additional R5000 was paid for a new sound system. The straight line method of depreciation must be used for this delivery vehicle only.

f. AH forecasted that services fees in the next two weeks will amount to $5,000.

g. AH received $10,000 additional cash investment from its owner (Cash receipt note #1).

h. AH rendered consultancy services worth $15,000 to clients who promised to pay the sum within a month (Credit sales invoice #1).

i. AH sold one of the furniture invested by its owner for $5,000 cash (Cash receipt note #2). The furniture had a recorded value of $5,000.

j. AH collected $5,000 cash from clients who received services in item-8 above (Cash receipt note #3).

k. AH paid $2,000 cash to suppliers on credit (Cash payment voucher #2).

a.      Alemu purchased office supplies worth $5,000 from various suppliers agreeing to pay the sum within two weeks (Purchase invoice #1). Two-fifth of the supplies will be used for personal purposes while the remaining is for use by AH. Three-fifth of the liability is arranged to be settled from business cash sources. 

b.     AH received $20,000 cash for consultancy services it rendered to a cash client (Cash sales invoice #1).

AH paid $3,000 cash for advertising aired through ETV (Cash payment voucher #1). 

1.     On January 3, 2003, Ale Hab, an ex-manager of the CBE Bole Branch, established his own consultancy business. He named his business "AH Consultancy Services". The objective of the business is to render financial consultancy services to clients on a fee basis. Below are business activities occurred during the first month of operation of the firm (3 to 31 of January, 2003).

a.      Alemu deposited $20,000 cash in a bank account in the name of his business - AH Consultancy Services (Deposit slip # 1). He has $250,000 cash in his personal bank account with Dashen Bank and $50,000 cash in a safe deposit box at home. 

b.     Alemu transferred furniture worth $30,000 from his home for office uses by AH Consultancy Services (Asset receipt note #1). He also has extra home furniture, residential house and personal car worth $620,000, $800,000 and $360,000, respectively. 

AH paid $3,000 cash for advertising aired through ETV 

SIM Industrial Pte Ltd uses a job-order costing system and applies manufacturing overhead

to jobs using a predetermined overhead rate based on direct labour hours.

At the beginning of the year, the company estimated manufacturing overhead for the year

would be $240,000 and direct labour hours would be 8,000

The following information pertains to November of the current year:

Job 10 Job 11 Job 12 Total

Work-in-process,Nov.1 $16,000 $26,000 $38,000 $80,000

November production activity:

Materials requisitioned $4,000 $4,800 $7,200 $16,000

Direct labour cost $2,400 $3,600 $4,000 $10,000

Machine hours 400 700 900 2,000

The direct labour cost per hour is $20. Actual manufacturing overhead cost incurred in

November was $ 18,000.

Required:

(a)Determine the accumulated total costs of each job as at 30 November.(11marks)

a.     Alemu purchased office supplies worth $5,000 from various suppliers agreeing to pay the sum within two weeks (Purchase invoice #1). Two-fifth of the supplies will be used for personal purposes while the remaining is for use by AH. Three-fifth of the liability is arranged to be settled from business cash sources.  

The following are extracts from the financial records of COF (Pty) Ltd for the year ended 30 June 2021:

30 June 2021 R

  Extract from the statement of profit or loss and other comprehensive income for the year ended 30 June 2021

  Revenue from sale of goods

Cost of sales

Profit on sale of non-current assets Commission income

Audit fees

Depreciation

Interest expense (finance cost) Income tax expense

Profit for the year (after tax)

  920 000 490 000 31 000 23 000 84 000 72 000 20 000 87 000 123 000

30 June 2021

   30 June 2021 R

  30 June 2020 R

 Inventories

Trade receivables Trade payables Taxation payable Prepaid expenses Accrued expenses

 302 000 690 000 400 000

75 000 8 000 84 000

  292 000 720 000 385 000

60 000 2 000 88 000

 Required:

Prepare only the “Cash generated by operations” section of the statement of cash flows for

the year ended 30 June 2021, using the indirect method

In four sentences, properly explain the financial statements (in general) and their significance.