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On 4 December 2020, SA Attorneys did a debit card payment of R11 500 to SA Insurers, for the monthly short-term insurance expense. SA Attorneys and SA Insurers are a registered VAT vendors.
Which account(s) will be debited, and which account(s) will be credited in the general ledger of SA Attorneys?
A. Determine the amount of the elements of SCI using the information provided.
DG Trading
Statement of Comprehensive Income
For the period ended, December 31, 20xx
-Advertising Expense - 5,000
-Bad Debts Expense - 10,000
-Commission Expense - 7,500
-Depreciaiton Expense - Furniture & Fixtures - 5,000
-Insurance Expense - 500
-Interest Expense - 2,000
-Light and Water Expense - 1,000
-Merchandise Inventory, December 31, 20xx - 30,000
-Merchandise Inventory, January 1, 20xx - 28,500
-Miscellaneous Selling Expense - 1,500
Office Salaries - 10,000
-Purchase Returns and Allowances - 1,500
-Purchases - 110,000
-Rent Expense - 7,500
-Sales - 237,500
-Sales Returns and Allowances - 2,500
-Sales Salaries - 15,000
-Taxes and Licenses - 2,500
B. Use the following to show your solution and underline twice your final answer.
1. Net Sales
2. Net Purchases
3. Cost of Sales
4. Gross Profit
5. Selling and Administrative Expenses
6. Net Income
A. Illustrate the operating cycle of a merchandising business.
B. Identify the following expense accounts if it is General & Administrative or Selling.
1. Advertising Expense
2. Salaries of Accounting Staff
3. Marketing Expenses
4. Store rental fees
5. Salesperson salaries and benefits
6. Depreciation of office equipment
7. Utilities used by the store
8. Freight out
9. Depreciation of Store building
10. Office Supplies Expense
I. Analyze the July 2021 transaction of Little Miss Wow Company. Put (T) if it is part in the preparation of Statement of Comprehensive Income and NA if it is not part in the preparation of SCI.
1. The company made an initial cash deposit amounting to 80,000.
2.The owner bought shop's office chairs and tables for 20,000, paying 5,000 and the balance on account.
3. Miss Wow paid advance rent to 24,000.
4. Supplies expence for the month is 12,500.
5. The company's total revenue for the month of july amounted to 150,000.
6. An employe of the shop was paid for 7,500.
7. Her receivable amounted to 3,500 for services made to Customer A.
8. The owner paid for internet subscription at 1,700.
9. Light and water expense for the month amount to 8,000
10. Miss Wow made a loan to OOTD Bank amounting to 50,000 payable in 5 years.
II. Miss Wow, the service business owner, asks you to prepare her statement of comprehensive income for the month.
(Case A)
Expense - 20,000
Net Income/(Net Loss) - 50,000
Service Income - ?
(Case B)
Net Income/(Net Loss) - 67,500
Service Revenue - 80,000
Expenses - 12,500
Other Comprehensive Income - 10,500
Comprehensive Income - ?
(Case C)
Comprehensive Income - 40,000
Other Comprehensive Income - 4,000
Service Income - 130,000
Net Income/(Net Loss) - 36,000
Expenses - ?
Pioner limited makes four component A, B, C and D for which cost in the forthcoming year are expected to be as follows:
A B C D
Production (units) 22,000 16,000 26,000 18,000
Rupees per unit
Direct material 32 28 36 40
Direct labour 30 28 32 28
Variable Overhead 6 8 4 4
68 64 72 72
A sub-contractor has offered to supply units of A, B, C and D for Rs. 75, Rs. 71, Rs. 73 and Rs. 65 respectively.
Required:
Which product should buy or make
Sufain Limited planning to invest in a project with an initial investment of Rs. 2,000,000. Following is the sales forecast for 5 years of useful life. Cost of Capital 8%.
Year Cash Flows (Rs.)
1 600,000
2 750,000
3 960,000
4 1,200,000
5 1,350,000
Required:
1. Net present value (NPV)
2. Internal Rate of Return (IRR)
3. Simple payback period
4. Discounted payback period
5. Accounting Rate of Return
