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JIMO LIMITED The information relates to the financial year ended 30 June 2021 - NSC Accounting - Question 1 - 2021 - Paper 1
Question 1
JIMO LIMITED The information relates to the financial year ended 30 June 2021. The business sells formal clothing for men and women. REQUIRED: 1.1 Refer to Inform... show full transcript
Worked Solution & Example Answer:JIMO LIMITED The information relates to the financial year ended 30 June 2021 - NSC Accounting - Question 1 - 2021 - Paper 1
Step 1
1.1 Refer to Information B.
Answer
To calculate the closing stock of formal suits omitted from the stock sheets, we need to examine the provided figures carefully. Using the formula:
Closing Stock = Opening Stock + Purchases - Sales
From the problem, if we work through the calculations with the figures given:
- Opening Stock: 230 - 24 = 206
- Purchases: (206 * R2 850) = R585 900
- Total Cost: 34 x R2 600 = R87 400
Thus,
Closing Stock = (206) + (R675 500 – R585 900) = R675 500.
Step 2
1.2 Refer to Information C.
Answer
To calculate the correct net profit after tax for the year ended 30 June 2021, we start with the incorrect net profit before tax:
Incorrect Net Profit Before Tax: R4 918 950
We need to account for adjustments:
- Audit Fees: + R123 600
- Interest on Loan: - R273 000
- Rent Income: + R4 750
- Income Tax Adjustments: - R1 285 250 (adjusting for tax liability)
Net Profit After Tax = (R4 918 950 + R123 600 - R273 000 + R4 750 - R1 285 250) = R3 474 800.
Step 3
1.3 Refer to Information A–H.
Answer
On 30 June 2021:
-
Retained Income Note:
- Balance at beginning: R4 478 800
- Net Profit after Tax: R3 474 800 (from 1.2)
- Dividends for the year: - R1 170 000
- Balance at end: R3 240 800
-
Statement of Financial Position (Balance Sheet):
- TOTAL ASSETS: R16 762 000
- SHAREHOLDERS' EQUITY: R9 720 000
- NON-CURRENT LIABILITIES: R3 842 000
- CURRENT LIABILITIES: R3 620 000
- TOTAL EQUITY AND LIABILITIES: R16 762 000
Balancing figures should be noted for accuracy in reports.