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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 to 4.1.5) in the ANSWER BOO... 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: (i) Amounts for (ii) and (iii) in the Fixed Assets Register
Answer
The calculation of the amounts for the Fixed Assets Register requires assessing the profit or loss on the sale of asset and the carrying value of fixed assets on the specified date.
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Profit/Loss on Sale of Asset:
- Identify the sale price and the book value of the asset sold.
- Calculate the Profit/Loss using the formula:
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Fixed Assets Carrying Value on 28 February 2019:
- This is determined by taking the initial carrying value of fixed assets and adjusting for any disposals or depreciation for the period leading up to 28 February 2019.
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, adjustments are made to the incorrect net profit before tax.
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Start with the Incorrect Net Profit Before Tax:
- Initial Net Profit: 828,700
- Subtract Provision for Bad Debts: (65,000)
- Add Advertising Expense: 9,800
- Subtract Rent Income (adjusted): (28,000)
- Subtract Additional Depreciation: 37,000
- Profit on Sale of Asset: 7,500
- Income Tax Adjustment: (198,000)
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Final Calculation:
- Correct Net Profit After Tax:
This indicates a decrease compared to the incorrect figure.
Step 3
4.2.3 Refer to Information A–H. Prepare the following on 28 February 2019: - Retained Income Note - Statement of Financial Position (Balance Sheet).
Answer
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Retained Income Note:
- Begin with the balance at the beginning of the year: 865,300.
- Add Net Profit After Tax: 511,500.
- Subtract Shareholder Dividends: (783,200).
- Final Retained Income: 485,600.
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Statement of Financial Position (Balance Sheet):
- Assets:
- Total Assets: 12,944,000 (calculated by summing Non-current and Current Assets).
- Liabilities:
- Total Liabilities to be calculated from Current and Non-current categories.
- Equity:
- Sum up Ordinary Share Capital, Retained Earnings, and any additional equity components.
- Assets: