JUNE EXAM QUESTIONS 12 JUNE 2014

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1 JUNE EXAM QUESTIONS 12 JUNE 2014 In this lesson we: Lesson Description Focus on Income Statement (Statement of Comprehensive Income) Summary Financial Statements The year-end procedures are summarised as follows: A Pre-Adjustment Trial Balance is prepared. Journal entries for year-end adjustments are recorded and posted to the General Ledger. A Post-Adjustment Trial Balance is then prepared. Closing entries are recorded in the General Journal and posted to the General Ledger. A Post-Closing Trial Balance is prepared. NAME OF COMPANY:. INCOME STATEMENT FO THE YEA ENDED Notes Sales Cost of sales Gross profit Other Operating Income ent income Commission income Fee income etc Gross operating income Operating epenses Trading stock deficit Salaries and wages Directors fees Audit fees Depreciation () ()

Provision for bad debts adjustment (epenses) Insurance Bad debts Packing material Sundry epenses etc Operating profit/(loss) Interest income 1 Profit before interest epense/financing cost Interest

2 Provision for bad debts adjustment (epenses) Insurance Bad debts Packing material Sundry epenses etc Operating profit/(loss) Interest income 1 Profit before interest epense/financing cost Interest epense / financing cost 2 () Net profit (loss) before ta Income ta () Net profit (loss) after ta 8 Question 1 Test Yourself esults of operations refers to A. Control Accounts B. Trial balance C. Balance sheet D. Income statement Question 2 State of affairs refers to A. Income statement B. Post adjustment trial balance C. Balance sheet Question 3 Turnover is calculated as follows: A. Sales +debtors allowances B. Debtors allowances - sales C. Sales debtors allowances

3 Question 4 The double entry to record an accrued epense is: A. Debit the epense ; Credit Accrued epense B. Debit Accrued Epense; Credit the epense C. Debit the income ; Credit Accrued epense Question 5 Trading stock surplus is shown in this section of the income statement A. Operating epenses B. Other income C. Gross profit D. Interest income. Question 1 SELATI LIMITED Improve your Skills You are provided with information for the financial year ended 30 June EQUIED: 1.1 Complete the Income Statement. (54) INFOMATION: EXTACT FOM THE TIAL BALANCE ON 30 JUNE 2013: Balance Sheet Accounts Section Ordinary share capital etained income (1 July 2012) Trading stock Debtors' control Provision for bad debts Creditors' control Loan: Puma Bank Bank (Dr) SAS: Income ta (Dr) Pension fund Unemployment Insurance Fund (UIF) Fied deposit: Sharp Bank Nominal Accounts Section Sales? Cost of sales Salaries and wages Directors' fees Audit fees Employer's contribution (Pension and UIF) Bank charges Sundry epenses Bad debts ent income Interest on fied deposit

4 epairs and maintenance Packing material Ordinary share dividends (interim)? ADJUSTMENTS AND ADDITIONAL INFOMATION: 1. The auditors are owed a further Goods are sold at a mark-up of 60% on cost price. The company held discounted cash sales during the year to clear ecess stock. The total of trade discount given to customers was Packing material to the value of was used during the year ended 30 June Interest on the bank overdraft, 2 800, is included in the bank charges. 5. No entries have been made for stock stolen at the beginning of June The insurance company has informed Selati Ltd that they have transferred into the business' bank account in respect of the insurance claim. Selati Ltd bears 20% of any stock loss. 6. A physical stocktaking on 30 June 2013 reflected that stock to the value of was on hand. 7. An amount of received from M Mpoani had been credited to the Debtors' Control Account in June The account of M Mpoani was written off as a bad debt during May The provision for bad debts must be adjusted to 4% of outstanding debtors. 8. One employee was omitted from the Salaries Journal for June His salary details are: Deductions Employer's Contribution Net salary EZ Builders was paid for the construction of a storeroom (80 000) and repairs to paving (25 000). The entire amount was debited to Land and Buildings in error. 10. The loan statement from Puma Bank on 30 June 2013 reflected: Balance at beginning of financial year epayments during the year Interest capitalised? Balance at end of financial year ent income for July 2013 has already been received. The monthly rent was increased by 10% on 1 May Depreciation is the missing figure in the Income Statement. 13. Net profit and ta: After taking all adjustments into account, the correct net profit after ta is The income ta rate is 30% of net income before ta.

5 SELATI LIMITED Answer Book 1.1 INCOME STATEMENT FO THE YEA ENDED 30 JUNE 2013 Sales ( t Cost of sales ( ) Gross profit Other income ent income ( ) Bad debts recovered Provision for bad debts adjustment Gross operating profit Operating epenses Salaries and wages ( Directors' fees( Audit fees ( Employer's contribution Bank charges ( Sundry epenses ( Bad debts( epairs and maintenance ( Packing material ( Loss due to stock theft ( Trading stock deficit ( Depreciation ( Operating profit Interest income ( Profit before interest epense Interest epense ( ( ) Net profit before ta Income ta for the year ( ) Net profit after ta

PRINCE LIMITED You are provided with information for the financial year ended 28 February 2015.

PRINCE LIMITED You are provided with information for the financial year ended 28 February 2015. REVISING ADJUSTMENTS FOR THE BALANCE SHEET (LIVE) Section B: Exam Questions Question 1 CONCEPTS GAAP PRINCIPLES 27 AUGUST 2015 REQUIRED: Choose an explanation from COLUMN B that matches a concept in COLUMN