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4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Question 4
4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A. Write only the letters (A–E) next to the question numbers (4.1.1–4.1.5) in the ANSWER BOOK. ... show full transcript
Worked Solution & Example Answer:4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Step 1
4.2.1 Calculate: - Amounts for (ii) and (iii) in the Fixed Assets Register
Answer
To calculate the amounts for (ii) and (iii), we need to identify the fixed assets pertaining to (ii) and (iii) in the Fixed Assets Register. Assume that the values provided in the marking scheme indicate that:
(ii) Fixed Assets Register shows a carrying value of a specific asset, which can be calculated from the adjustments and profit/loss from sales of assets. Ensure all entries are updated to reflect depreciation accurately.
(iii) Calculate the Fixed assets carrying value on 28 February 2019 using:
- Total original cost of fixed assets.
- Less: Accumulated depreciation.
- Adjust for any sales or disposals during the year.
Step 2
4.2.2 Calculate the correct net profit after tax for the year ended 28 February 2019. Indicate (+) for increase and (–) for decrease.
Answer
To calculate the correct net profit after tax, follow these steps:
- Start with the incorrect net profit before tax, which is given as a base value: 828,700.
- Adjust for the provisions as indicated (e.g., provision for bad debts, advertising expenses).
- Add or subtract any adjustments related to additional depreciation, sale of assets, and income tax adjustments as specified in the marking scheme.
- The formula used can be expressed as:
- Always indicate if the adjustment led to an increase (+) or a decrease (–) in net profit.
Step 3
4.2.3 Refer to Information A–H. Prepare the following on 28 February 2019: - Retained Income Note
Answer
The Retained Income Note should include:
- Balance at the beginning of the year.
- Add the net profit after tax as calculated in the previous step.
- Subtract any dividends declared during the year to reflect the retained earnings.
Clearly show these elements:
- Retained Income at beginning: [value from marking scheme].
- Net profit after tax: [from step 4.2.2].
- Total dividends: [value from marking scheme].
- Final balance at end of the year should be calculated accordingly.
This format ensures clarity and aligns with typical financial reporting standards.
Step 4
4.2.3 Refer to Information A–H. Prepare the following on 28 February 2019: - Statement of Financial Position (Balance Sheet).
Answer
The Statement of Financial Position (Balance Sheet) should be organized into Assets and Liabilities:
- List all non-current assets including the fixed assets with their carrying values as calculated earlier.
- Add current assets such as inventories, trade and other receivables, and cash balances.
- Total Assets should be calculated accurately.
- For the liabilities section, detail current and non-current liabilities with appropriate values.
- Ensure total equity and total liabilities equal total assets, reflecting the accounting equation:
- Include retained earnings in the equity section.