FAC1601 Assignment 2 (COMPLETE ANSWERS) Semester 2 2023 - DUE 11 September 2023.
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Course
Financial Accounting and Reporting
Institution
University Of South Africa
FAC1601 Assignment 2 (COMPLETE ANSWERS) Semester 2 2023 - DUE 11 September 2023.Detailed working, solutions, memo, notes & explanations............. Greg and Sheniz are in a partnership trading as Sugar Rush, a new, up-and-coming pastry shop. They share profits and losses in the ratio of 5:3 respec...
FAC1601 Assignment 2
(COMPLETE ANSWERS)
Semester 2 2023 - DUE 11
September 2023.
, QUESTION 1:
Which one of the following alternatives represents the correct Revenue amount recorded in the
statement of profit/loss and other comprehensive income of Sugar Rush for the year ended 31
August 2023?
To calculate the correct revenue amount, we need to consider the following information:
Settlement discount of 3% on total purchases.
Inventory on hand at 31 August 2023 amounted to R16,000.
First, we need to calculate the total purchases for the year:
Total Purchases = Purchases without discount - Settlement discount
Total Purchases = R501,840 - (R501,840 * 3%) = R501,840 - R15,055.20 = R486,784.80
Now, let's calculate the revenue:
Revenue = Total Purchases - Inventory on hand at the end of the year
Revenue = R486,784.80 - R16,000 = R470,784.80
So, the correct revenue amount is R470,784.80.
Answer: C. R660 934
QUESTION 2:
Which one of the following alternatives represents the correct Purchases amount of Sugar Rush
for the year ended 31 August 2023?
To calculate the correct purchases amount, we can use the total purchases amount calculated in
the previous question:
Total Purchases = R486,784.80
Answer: D. R502 836
QUESTION 3:
Which one of the following alternatives represents the correct Allowance for Credit Losses
balance amount to be recorded in the financial statements of Sugar Rush for the year ended 31
August 2023?
The closing balance of the allowance for credit losses account must be increased with R3,800.
So, to calculate the correct allowance for credit losses balance:
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