QUESTION 1

2014
Sales (435 000(0.5) - 800(0.5))
Cost of sales
Opening inventory
Purchases (301 870(0.5) + 515(0.5))
Freight on purchases
Closing inventory
Gross Profit

Total
R
434,200
-323,935
56,000
302,385
7,850
-42,300
110,265

Gross Profit Margin

2015
Sales (213 875(0.5) - 2 385(0.5))
Cost of sales
Opening inventory
Purchases (148 806(0.5) + 230(0.5))
Freight on purchases
Closing inventory
Gross Profit

Total
R
211,490
-157,265
42,300
149,036
3,782
-37,853
54,225

Gross Profit Margin

Insurance claim

Total marks

30 000(0.5) / 37 853(0.5P) * 34 273(0.5) = R

27 163 /100 * 114 (0.5) = R30 966

Normal
R
420,480
-315,360

Dec sales
R
13,720 1 (15 641 * 100/114)
-8,575

0.5
293,810

8,575 1P

105,120

5,145

(15 641 / 1.6 * 100/114)

1 (2 983 * 3 * 100/114)
0.5

0.25

Normal
R
195,250
-146,438 0.5P

1P

Balancing sales divided by balancing COS

Dec sales
R
16,240 1 (18 514 * 100/114)
-10,827

0.5
138,209

10,827 1P

(18 514 / 1.5 * 100/114)

1 (2 155.74 * 2 * 100/114)
0.5P
48,813

5,413

0.25
(37 853 - 3580)=34 273

00(0.5) / 37 853(0.5P) * 34 273(0.5) = R27 163

63 /100 * 114 (0.5) = R30 966

MAX

15.5
15

QUESTION 2
SOUTH-WEST ENTERPRISES
Statement of profit or loss and other comprehensive income for the year ended 28 February 2015

Sales
Cost of sales
Opening stock
Purchases
Closing stock
Gross profit
Other income:
Rent received
Profit on sale of asset
Operating Expenses:
Fuel and maintenance
General expenses
Credit losses
Stationery
Depreciation - Building
Depreciation - Vehicles
Depreciation - Furniture
Interest paid
Profit for the year

0.5
2015
R
337,830
-220,200
10,100 0.5
241,300
-31,200 0.5
117,630

(352 830(0.5) - 15 000(0.5))

(238 250(0.5) + 5 600(0.5) - 2 550(0.5))

17,226
15,996
1,230 calc 3

(13 144(0.5) + 2 852(calc 1))

-36,330
-16,350
-6,400
-2,355
-310
-3,750
-6,590
-575

(7 850(0.5) + 8 500(0.5))
(7 070(0.5) - 670(0.5))
(820(0.5) + 1 650(0.5) - 115(calc 2))
(1 850(0.5) - 1 540(0.5))

(5 500 + 625)

-6,125 Calc 5
92,401

NOTES TO THE FINANCIAL STATEMENTS

Property, Plant and Equipment
Carrying value at beginning of year:
Cost
Accumulated depreciation
Movement for the year:
Purchases
Disposals
Depreciation
Carrying value end of the year:
Cost
Accumulated depreciation

0.5
Land
R
200,000 0.5
200,000
0

Vehicles
R
40,600
71,100 0.5
-30,500 0.5

0
0
0
200,000 0.5
200,000
0

Furniture
R
5,200
13,500
-8,300

0
-13,770
-6,590 calc 3.1

0.5

2,550
0.5
0
-575 calc 4

20,240
48,600 0.5P
-28,360 0.5P

7,175
16,050 0.5P
-8,875 0.5P

Total
R
284,600
284,601
-38,800
0
0
2,550
-13,770
-7,165
0
227,416
264,650
-37,235

Calculations:
Calc 1 - Rent received

6x +(1.15)x = 13 144(1)
10.6x = 13 144
x = 1 240 + 15%(0.5)
= 1 426 * 2(0.5)
= 2 852

Calc 2 - Credit losses

40 500(0.5) - 1 650(0.5)
= 38 850 * 10%(0.5)
= 3 885(0.5) -4 000
= 115

Calc 3 - Vehicles

1 Jun 2012 - 28 Feb 2013

1 Mar 2013 - 28 Feb 2014
1 Mar 2014 - 31 Aug 2014

Depr.
3,375
3,825
1,530
8,730

0.5
0.5
0.5

22500(0.5) - 8 730 = 13 770 - 15 000(0.5) = 1 230 profit

Calc 3.1 Vehicles
71 100 - 22 500(0.5)
30 500 - 3375(0.5) - 3 825(0.5)

= 48 600
= (23 300)
25 300 * 20%(0.5) = R5 060 depr.

Total depr = 5060 + 1530 (0.5P)= R6 590

From above

Calc 4 - Furniture

2 550(0.5) - 350(0.5) = 2 200 * 10% * 3/12(0.5) = 55 depr.

13 500 - 8 300(0.5) * 10%(0.5) = 520 depr.

Calc 5 - Interest paid

50 000 * 12% * 11/12 = 5 500(1)

50 000 * 15% * 1/12 = 625(1)
6,125

Total marks
Maximum

0.5P

28
25

Question 3
a. VAT calculation:
Output VAT:
Sales
Rent income
Settlement discount

(342 000(0.5) + 51 300(0.5)) * 14/114

(23 940 * 14/114)(0.5)
(51 300(0.5) * 10%(0.5) * 14/114(0.5))

Input VAT:
Purchases
Repairs/Repaint
Electricity
Bank costs

(171 000 * 14/114)(0.5)

(9 120 * 14/114)(0.5)
(5 928 * 14/114)(0.5)
(57 * 14/114)(0.5)

VAT payable

48,300
2,940
-630

-21,000
-1,120
-728
-7
27,755

b. Discussion:
Definition of a liability:
1.Present obligation (0.5)
2.As a result of a past event (0.5)
3.Lead to outflow of economic
benefits (0.5)

Tyrion has a legal obligation to pay the VAT, because he is a vendor he needs
to adhere to VAT legislation. (0.5)
Tyrion incurred transactions that had VAT consequences. (0.5)
He will have to pay SARS, which will result in his assets (bank) being
reduced. (0.5)

Recognition criteria:
1.Probable that it will lead to an
outflow of economic benefits (0.5)
2.Cost can be measured reliably (0.5)

He has no choice but to pay the VAT, because of VAT legislation, otherwise he
will incur penalties. (0.5)
The correct VAT amount can be calculated - R27 755 (0.5)

Conclusion (0.5)
Total marks
Maximum

10.5
10