Photo AI
4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1
Question 4
4.1 Choose a description from COLUMN B that matches the term in COLUMN A. Write only the letter (A–D) next to the question number (4.1.1–4.1.4) in the ANSWER BOOK, f... show full transcript
Worked Solution & Example Answer:4.1 Choose a description from COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2017 - Paper 1
Step 1
4.2.1 Carrying value of the vehicle sold on 30 November 2016
Answer
To calculate the carrying value of the vehicle sold, we need to determine the accumulated depreciation. The vehicle's cost price is R190,000, and the accumulated depreciation until the date of sale (30 November 2016) is:
- Depreciation for the 6 months (March - August) = 20% of R190,000 = R38,000.
- Depreciation for the next 5 months (September - November) = 20% of remaining value (R190,000 - R38,000) = R30,400.
Total accumulated depreciation until the selling date will be:
- Accumulated Depreciation = R38,000 + R30,400 = R68,400.
Therefore, the carrying value = Cost Price - Accumulated Depreciation = R190,000 - R68,400 = R121,600.
Step 2
4.2.1 Total depreciation on 28 February 2017
Answer
The total depreciation for the year on the remaining vehicles (R138,000) and the equipment with a cost of R250,000 at a rate of 10% will be calculated as follows:
- For equipment purchased on 1 March 2016, total depreciation = 10% of R250,000 = R25,000.
Thus, the total depreciation = R138,000 (vehicles) + R25,000 (equipment) = R163,000.
Step 3
4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017
Answer
Mtombeni Limited
Income Statement for the year ended 28 February 2017
| Particulars | Amount (R) |
|---|---|
| Sales | 5,482,500 |
| Cost of Sales | (3,159,375) |
| Gross Profit | 2,323,125 |
| Other Operating Income | 198,950 |
| Gross Operating Income | 2,522,075 |
| Operating Expenses: | |
| Directors' Fees | (380,000) |
| Audit Fees | (54,000) |
| Bad Debts | (15,500) |
| Salaries and Wages | (490,250) |
| Consumable Stores | (61,700) |
| Insurance | (19,220) |
| Bank Charges | (7,760) |
| Sundry Expenses | (140,085) |
| Total Operating Expenses | (1,167,605) |
| Operating Profit | 1,354,470 |
| Interest Income | 19,220 |
| Net Profit Before Tax | 1,373,690 |
| Less: Income Tax (28%) | (384,000) |
| Net Profit After Tax | 989,690 |