4. Accounting procedures
A section of Accounting, 7707
Listing 10 of 188 questions
Stalla is a sole trader who sells on credit. She maintains a provision for doubtful debts at 4% of trade receivables. Stalla’s trade receivables were: $ At 31 December 2021 75 000 At 31 December 2022 77 000 REQUIRED Prepare Stalla’s provision for doubtful debts account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023. Stalla Provision for doubtful debts account Date Details $ Date Details $ State two reasons why Stalla maintains a provision for doubtful debts. Stalla charges depreciation at 25% per annum, using the reducing balance method. She charges a full year’s depreciation in the year a vehicle is purchased and none in the year it is sold. On 31 December 2022, Stalla sold a vehicle for $9500. The vehicle had cost $16 000 on 1 September 2020. REQUIRED Calculate the gain or loss on disposal of the vehicle. The balances on Stalla’s ledger accounts at 1 January 2022 included the following. $ Motor vehicles 48 000 Provision for depreciation on motor vehicles 21 000 Prepare Stalla’s motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023. Stalla Motor vehicles account Date Details $ Date Details $ Prepare Stalla’s provision for depreciation on motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023. Stalla Provision for depreciation on motor vehicles account Date Details $ Date Details $ Stalla had an extension to her retail premises built during 2023. The extension will be used as an office. REQUIRED Place a tick (3) in the correct box below to indicate whether each cost is capital expenditure or revenue expenditure. Capital expenditure Revenue expenditure Legal fees for obtaining permission to build the extension Building costs for the extension Insurance for the office Painting the office extension Office calendar for 2023 Purchase of office equipment Installation of office equipment Stationery for office
7707_s23_qp_21
THEORY
2023
Paper 2, Variant 1
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Ramla has calculated her draft profit figure for the year ended 28 February 2023. Adjustments in Ramla’s ledger accounts have still to be made for the following items. An amount of $99 owed to Ramla by Mai is to be written off as irrecoverable. Fixtures and fittings, $875, were purchased on credit from Padma. A loan repayment, $500, had been incorrectly recorded as loan interest. Rent paid, $350, had been recorded as $530. Drawings, $120, had been debited to the wages account. REQUIRED Prepare the journal entries required for items 1–5. Narratives are not required. Ramla Journal Item number Details Debit $ Credit $ …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… …… Complete the following table by entering the amount of each adjustment required to calculate Ramla’s adjusted profit. If an item has no effect on profit, enter zero (0) in the ‘no effect on profit’ box. Item Increase in profit $ Decrease in profit $ No effect on profit Profit $ Draft profit 11 650 Adjusted profit Explain how the journal for item 1 complies with the prudence principle. how the journal for item 5 complies with the business entity principle.
7707_s23_qp_22
THEORY
2023
Paper 2, Variant 2
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Questions Discovered
188