Prepare the trading account in the general ledger

Assignment Help Financial Accounting

Reference no: EM132365178 , Length: 6 pages

QUESTION 1

The following transactions are taken from the records of Shonga Traders for January 2019. The business is a registered VAT vendor and VAT is inclusive at 14%, where applicable. The business uses the periodic inventory system.
2 Duplicate credit invoice no 105 for R4 275 issued to Marabastad Dealers for trading inventory supplied.
3 Original credit invoice no A522 for R28 500 received from Kat Kit Wholesalers for the acquisition of merchandise.
4 Marabastad Dealers paid R2 275 on their account. Duplicate receipt number 385 issued.
7 Duplicate credit invoice no 106 for R6 840 issued to Mr Tlou for goods supplied.
8 It was discovered that repairs done to the equipment for R1 710 was incorrectly debited to the equipment account. This error must still be corrected. Journal voucher JV 01 was issued.
9 Duplicate credit note no 83 for R855 issued to Marabastad Dealers for an overcharge.
11 Original credit note no 178 for R342 received from Kat Kit Wholesalers for damaged merchandise returned.
14 Cheque counterfoil no 456 for R2 736 issued to Kat Kit Wholesalers in payment of account.
17 Marabastad Dealers was declared insolvent and the outstanding account must be written off as irrecoverable. Journal voucher JV 02 was issued.
20 Cash register roll no 350 for sales amounted to R25 650.
25 Cheque counterfoil no 457 for R27 360 for merchandise received from Qalinge Wholesalers.

REQUIRED:

Record the above transactions in the following appropriate subsidiary journals of Shonga Traders for January 2019:
(a) Cash receipts journal (columns for Doc no, Day, Details, Fol, Analysis of receipts, Bank, Vat output, Sales and Debtors).
(b) Cash payments journal (columns for Doc no, Day, Details, Fol, Bank, Vat input, Purchases and Creditors).
(c) Sales journal (columns for Doc no, Day, Details, Fol, VAT output, Sales and Debtors).
(d) Purchases journal (columns for Doc no, Day, Details, Fol, VAT input, Purchases and Creditors).
(e) Sales returns journal (columns for Doc no, Day, Details, Fol, VAT output, Sales returns and Debtors).
(f) Purchases returns journal (columns for Doc no, Day, Details, Fol, VAT input, Purchases returns and Creditors).
(g) General journal (columns for Doc no, Day, Details, Fol, Debit and Credit).

QUESTION 2

Weld Traders prepared the January 2019 bank reconciliation statement on 31 January 2019 and it contained the following information:
• The unfavourable balance as per bank statement was R2 500.
• The outstanding deposit was for an amount of R16 200.
• The following cheques were outstanding:
- Cheque 111 for R5 200
- Cheque 112 for R3 200
- Cheque 115 for R4 000
• The favourable balance as per bank account was R1 300.

Weld Traders received the following bank statement for February 2019:

BANK STATEMENT OF WELD TRADERS FOR FEBRUARY 2019 Address: 146 MEARS STREET SUNNYSIDE 0002
Date	Details	Debits R	Credits R	Balance R
01/02/2019	Balance ....................................................................			-2 500
	Deposit .....................................................................		16 200	13 700
03/02/2019	Deposit .....................................................................		10 250	23 950
	Cheque no: 111 ........................................................	5 200		18 750
04/02/2019	Cheque no: 115 ........................................................	4 000		14 750
07/02/2019	Deposit .....................................................................		1 700	16 450
08/02/2019	Cheque no: 118 ........................................................	6 300		10 150
09/02/2019	Deposit .....................................................................		3 900	14 050
	Debit order: Rural Properties ....................................	9 500		4 550
11/02/2019	Cheque no: 125 ........................................................	950		3 600
15/02/2019	Cheque no: 126 ........................................................	1 350		2 250
18/02/2019	Deposit: Kasi Traders ...............................................		20 000	22 250
20/02/2019	Unpaid cheque: Ms F Fernando................................	5 850		16 400
22/02/2019	Deposit .....................................................................		4 500	20 900
24/02/2019	Cheque no: 130 ........................................................	5 150		15 750
25/02/2019	Debit order: UNI Investments.................................... Interest income .........................................................	7 250	2 550	8 500 11 050
26/02/2019	Deposit: Ms K Mabe .................................................		3 250	14 300
28/02/2019	Monthly fees ............................................................. Service fees.............................................................. Interest charge..........................................................	850 250 200		13 450 13 200 13 000

• The deposit on 18 February 2019 from Kasi Traders was for renting property from Weld Traders.
• The deposit on 26 February 2019 from Ms K Mabe was for settling an outstanding debt to Weld Traders.
• The cheque received in the previous month from Ms F Fernando was marked dishonoured due to insufficient funds and was debited on 20 February 2019 on the bank statement of Weld Traders by the bank.

QUESTION 2

Weld Traders prepared the following provisional cash journals for February 2019:

CASH RECEIPTS JOURNAL (BANK COLUMN ONLY) - FEBRUARY 2019

Day	Details	Bank R
01	Cash sales..........................................................................................................	10 250
07	Mr H Small..........................................................................................................	1 700
09	Cash sales..........................................................................................................	3 900
22	Cash sales..........................................................................................................	4 500
28	Mr King Kong......................................................................................................	5 050
		25 400

Cheque number	Day	Details	Bank R
118	08	Cash ..................................................................................................	6 300
125 126	11 13	Cash .................................................................................................. Cash ..................................................................................................	950 1 350
130	24	Cash ..................................................................................................	5 150
133	23	MTNcom ............................................................................................	7 600
135	28	Dejay Govendors ...............................................................................	6 850
			28 200

REQUIRED:

(a) Complete the cash receipts journal and the cash payments journal of Weld Traders for February 2019 (Details and bank column only).
(b) Prepare the properly balanced/closed off bank account for February 2019 in the general ledger of Weld Traders.
(c) Prepare the bank reconciliation statement of Weld Traders as at 28 February 2019.

QUESTION 3

The following information appeared in the accounting records of Namib Traders (not a VAT vendor) for the financial year ended 30 June 2019:

Balances/totals as at 30 June 2019

	R
Credit losses recovered ...................................................................................................	8 745
Freight on purchases .......................................................................................................	27 500
Purchases........................................................................................................................	874 665
Purchases returns............................................................................................................	17 490
Settlement discount received ...........................................................................................	12 210
Water and electricity ........................................................................................................	38 280
Salaries and wages..........................................................................................................	148 995
Freight on sales ...............................................................................................................	22 000
Sales................................................................................................................................	1 485 660
Sales returns....................................................................................................................	14 355
Telephone expenses........................................................................................................	26 235
Stationery ........................................................................................................................	11 220
Settlement discount granted ............................................................................................	15 180
Capital (1 July 2018) ........................................................................................................	555 500
Mortgage .........................................................................................................................	792 000
Bank overdraft .................................................................................................................	174 405
Fixed deposit ...................................................................................................................	115 500
Furniture at cost ...............................................................................................................	82 500
Plant and equipment at cost.............................................................................................	1 237 500
Accumulated depreciation: Furniture (1 July 2018) ..........................................................	24 750
Accumulated depreciation: Plant and equipment (1 July 2018) ........................................	247 500
Repairs and maintenance ................................................................................................	3 135
Insurance.........................................................................................................................	21 780
Credit losses ....................................................................................................................	18 975
Debtors control ................................................................................................................	407 165
Allowance for credit losses...............................................................................................	21 120
Drawings..........................................................................................................................	41 250
Inventory (1 July 2018) ....................................................................................................	239 745
Interest received on fixed deposit.....................................................................................	6 600

Additional information

1. The physical inventory count at 30 June 2019 indicated that inventory amounted to R140 910 and stationery to R4 125.

2. The fixed deposit was made on 1 July 2018 at ATM Bank at an interest rate of 8% per annum.

3. Wages, amounting to R3 300, must still be paid.

4. A debtor that owes R1 980 must be written off as irrecoverable.

5. The mortgage agreement was entered into on 1 May 2019 and bears simple interest at a rate of 10% per annum. The interest for the current financial year must still be accounted for.

QUESTION 3

6. It was determined that the allowance for credit losses account should amount to R23 595 at 30 June 2019.

7. Provide depreciation as follows (There were no additions or disposals of furniture and plant and equipment during the financial year):
• Furniture - 10% per annum on the straight-line method.
• Plant and equipment - 20% per annum on the reducing-balance method.

REQUIRED:

(a) Prepare the trading account in the general ledger of Namib Traders for the year ended 30 June 2019.
(b) Prepare the profit or loss account in the general ledger of Namib Traders for the year ended 30 June 2019.

Reference no: EM132365178

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Reviews

len2365178

9/3/2019 3:13:48 AM

This assessment consists of SIX (6) pages. PLEASE NOTE: 1. This assessment consists of THREE (3) questions. 2. All questions must be answered. 3. Basic calculations, where applicable, must be shown. 4. Each question must be answered on the applicable answer sheet. QUESTION TOPIC MARKS TIME (minutes) 1 Subsidiary journals 32 38 2 Bank reconciliation 32 38 3 Final accounts 36 44 TOTAL 100 120

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