Financial Accounting

Financial Accounting
Question 2 Disposal of fixed assets
Required
Use the information extracted from the accounting records of Kingston Stores to:
1. Calculate the profit or loss on the vehicle sold (All workings must be shown)
2. Prepare the following note of the financial statements as at 28 February 2013: property , plant and equipment (the total column is not required)
Information
a. The following balances appeared, amongst others, in the pre- adjustment trial balance for Kingston stores as at 28 Feb 2013:
Debit ($) Credit ($)
Vehicle at cost
Equipment at cost
Accumulated depreciation on vehicles (1 March 2012)
Accumulated depreciation on equipment (1 March 2012)

b. On 28 February 2013 a vehicle was sold on credit to a customer for $33.000. The cost price of the vehicle was $67.000. Accumulated depreciation on the vehicle sold amounted to 31.000 USD on 01 March 2012. No entries were made.
c. Depreciation is provided on vehicle at 20% p.a. on the diminishing balance and on equipment at 15% p.a. on cost. Note: Equipment that cost 12.000 was purchased on 01 June 2012. The purchase has been recorded.
Question 3Partnerships
The information given bellow was extracted from the accounting records of Pacman Traders, a partnership business with PC and Mann as partners.
Required
Prepare the following accounts (in T-form) inthegeneral ledger of Pacmann Traders for the year ended 28 February 2013.
1. Current account: Pac
2. Appropriate account
Information
Balances in the ledger as at 28 February 2013
$
Capital: Pac 800.000
Capital: Mann 450.000
Current a/c: Pac (01 March 2012) 54.000
Current a/c: Mann (01 March 2012) 9.000
Drawings: Pac 180.000
Drawings: Mann 150.000

The following must be taken into account:
a. The net profit according to the profit and loss account amounted to $680.000 on 28 Feb 2013.
b. The partnership agreement makes provision for the following:
– Interest on capital must be provided at 15% per annum on the balances in the capital accounts. Note: Pac increased his capital by $120.000 on 01 September 2012. On the same date, Mann decreased his capital by 60.000. The capital changes have been recorded.
– The partners are entitled to the following monthly salaries: Pac 7.000 and Mann 6.000. Note: The partners’ salaries were increased by 10% with effect from 01 September 2012.
– Pac is entitled to a bonus of 10% of the net profit before any appropriations are made.
– Pac and Mann share the remaining profits or losses equally.
Question 4 Financial Statements
The trial balance, adjustments and additional information were extracted from the accounting records of Baxter Traders as at 28 February 2013, the end of the financial year.
Required
Use the trail balance, adjustments and additional information to complete the financial statements (that appear after the adjustments and additional information) with the missing amounts and details. The entire statements must be submitted. Where applicable, show your workings in brackets. Note: the notes to the financial statements and statement of charges in equity are not required.
Information
Pre-Adjustment trial balances as at 28 February 2013
Debit Credit
Balance sheet accounts section
Capital 1.800.000
Drawings 120.000
Land and buildings 1.140.000
Vehicles at cost 840.000
Equipment at cost 600.000
Accumulated depreciation on vehicles 480.000
Accumulated depreciation on equipment 336.000
Fixed deposit: Central Bank (8% p.a) 180.000
Trading inventory 154.000
Debtors control 177.600
Provision for bad debts 9.000
Bank 74.000
Cash float 9.000
Creditors control 166.680
Nominal accounts section
Sales 1.887.900
Cost of sales 694.000
Sales returns 82.000
Salaries and wages 504.000
Bad debts 16.800
Stationery 27.360
Rates and taxes 72.000
Motor expenses 20.000
Repairs 21.540
Telephone 40.620
Electricity and water 60.740
Bank charges 7.540
Insurance 7.880
Interest on fixed deposit 13.500
Rent income 156.000
4.849.080 4.849.080

Adjustment and additional information
1. Extensions and repair were made to the buildings. The credit invoice totaled $200.000 and is still to be recorded. The invoice comprises the following: Architects fees $18.000, building materials $180.000, repairs to existing windows 2.000.
2. The telephone account for February 2013 will be paid on 04 March 2013, $3.800.
3. RENT AMOUNTS TO $12.000 per month. Make the necessary adjustment.
4. A debtor, T. Hanks, was declared insolvent. No entry has been made for a cheque of $2.100, which represented 60% of the amount owing, that was received. The balance of the account must also be written off.
5. The provision for bad debts must be adjusted to $8.700.
6. The inventory count as at 28 February 2013 revealed the following on hand: trading inventory $152.600, stationery $600
7. The investment in fixed deposit was made on 01 March 2012 and matures on 01 September 2013. Provide for the outstanding interest on fixed deposit.
8. Insurance includes and annual premium of $3.600 that was paid for the period 01 August 2012 to 31 July 2013.
9. Provide for depreciation as follows
a. On equipment, $60.000
b. On vehicles, $72.000
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