Chucker and Zooloo are well established car dealers on Zulu street. Their draft account for the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Chucker and Zooloo are well established car dealers on Zulu street. Their draft account for the year ended 31 March 20 8 show a net profit of R90,000 which they feel was lower than expected and ask you their accountant to investigate. You discover the following. (1) Discount received in August 20 '8 of R2,100 have been credited, in error, to purchases. (2) A debt of R3,000 due from Francis Nguemah & Co was written off as irrecoverable in December 20 7. Since preparing the draft account, Francis Nguemah & Co has settled the debt in full. (3) The company's main warehouse was burgled in June 20 *7, when goods costing R200,000 were stolen. This amount has been shown in the draft accounts as an overhead item "Loss due to burglary". Although the insurance company denied liability originally, in recent days, the decision has been changed as they have agreed to pay R140,000 as settlement. On 1 January20 8 a Ford Mondeo car, which had cost R18,000, was taken from the showroom for use by one of the sales representatives whilst on business. The price tag on this vehicle in the showroom was R24,000. The transfer has not been effected in the books although the car was not included in the trading stock valuation at 31 March 20*8. The business provides for depreciation on motor vehicles at the rate of 25% of the cost of all vehicles held at the end of each financial year. (5) A Toyota Camry bought from Tamungah Transport on 30 March 20'8 at a cost of R12,000 was not recorded in the books until April 20*8. Although unsold on 31 March 20 '8, the car in question was not included in the stock valuation at the date. (6) The business is hoping to market a new car accessory in July 2018. The new venture is to be launched with an advertising campaign commencing in April 20 8. The cost of the campaign is R50,000 and this has been debited in the profit and loss account for the year ended 31 March 208 and is included in current liabilities as a provision, notwithstanding the confident expectation that the new product will be a success. (7) On 31 March 20 8 the business paid an insurance premium of R6,000, the renewal being the year beginning 1 April 20 8. This premium was included in the insurance charge of R11,000 debited in the draft profit and loss account. Requirement Prepare a statement of adjustment to profit for the year ended 31 March 20 *9. Chucker and Zooloo are well established car dealers on Zulu street. Their draft account for the year ended 31 March 20 8 show a net profit of R90,000 which they feel was lower than expected and ask you their accountant to investigate. You discover the following. (1) Discount received in August 20 '8 of R2,100 have been credited, in error, to purchases. (2) A debt of R3,000 due from Francis Nguemah & Co was written off as irrecoverable in December 20 7. Since preparing the draft account, Francis Nguemah & Co has settled the debt in full. (3) The company's main warehouse was burgled in June 20 *7, when goods costing R200,000 were stolen. This amount has been shown in the draft accounts as an overhead item "Loss due to burglary". Although the insurance company denied liability originally, in recent days, the decision has been changed as they have agreed to pay R140,000 as settlement. On 1 January20 8 a Ford Mondeo car, which had cost R18,000, was taken from the showroom for use by one of the sales representatives whilst on business. The price tag on this vehicle in the showroom was R24,000. The transfer has not been effected in the books although the car was not included in the trading stock valuation at 31 March 20*8. The business provides for depreciation on motor vehicles at the rate of 25% of the cost of all vehicles held at the end of each financial year. (5) A Toyota Camry bought from Tamungah Transport on 30 March 20'8 at a cost of R12,000 was not recorded in the books until April 20*8. Although unsold on 31 March 20 '8, the car in question was not included in the stock valuation at the date. (6) The business is hoping to market a new car accessory in July 2018. The new venture is to be launched with an advertising campaign commencing in April 20 8. The cost of the campaign is R50,000 and this has been debited in the profit and loss account for the year ended 31 March 208 and is included in current liabilities as a provision, notwithstanding the confident expectation that the new product will be a success. (7) On 31 March 20 8 the business paid an insurance premium of R6,000, the renewal being the year beginning 1 April 20 8. This premium was included in the insurance charge of R11,000 debited in the draft profit and loss account. Requirement Prepare a statement of adjustment to profit for the year ended 31 March 20 *9.
Expert Answer:
Answer rating: 100% (QA)
Adjusted Profit and Loss Account for the year ended 31 March 20 9 Revenue Less Di... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285866307
13th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
Students also viewed these accounting questions
-
The fundamentals of finance are said to be the concept of 'Risk and Return' and secondly the 'Time Value of Money'. Critically evaluate how investment appraisal techniques can take account of both...
-
A firm had merchandise inventory of 52,500 on January 1 2016 and had purchases of 60,000 freight in of 300 purchases returns and allowances of 3,800 and purchases discounts of 1,400 during 2016 The...
-
Question 3 Find the equation of the plane containing the point P(0, 2, 5) and the line r(t) =(2, 1, 5) + t(2, -3, -2). [Hint: First find two vectors parallel to the plane (that is, find two vectors...
-
How can staff review the effectiveness of their work, the services they provide and the social and cultural factors impacting on clients, groups or communities?
-
A die is continually rolled until the total sum of all rolls exceeds 300. Approximate the probability that at least 80 rolls are necessary.
-
Use a two-element, finite-element model to approximate the two lowest torsional natural frequencies for the system of Figure P11.14. \[ \begin{aligned} & J=3.2 \times 10^{-5} \mathrm{~m}^{4} \\ &...
-
Georgia Lapp Travel Design, Inc., prepared its trial balance. Suppose Lapp made an error: She erroneously listed common stock of \($30,100\) as a debit rather than a credit. Requirement 1. Compute...
-
Jerry Stevenson is the manager of a medical clinic in Scottsdale, AZ. He wants to analyze patient data to identify high-risk patients for cardiovascular diseases. From medical literature, he learned...
-
Aristocrat Leisure (ALL) acquired Video Gaming Technologies (VGT) in 2014. How would you describe the financing of the acquisition? Evaluate the financing choice on Aristocrat's distress/credit risk,...
-
As Lush UK implemented the change, how could it measure the effects of leaving and then returning to social media on the achievement of its marketing goals? Lush Fresh Handmade Cosmetics UK sells...
-
A county with 1M (M for million) population, 2% unemployment, and no inflation, voted to build a stadium and rent it to a professional baseball team. The team owner, who was not a county resident,...
-
What methodologies have been employed to ensure the seamless integration of your solution into existing infrastructures ?
-
The volume of a balloon filled with Ar at 9 5 5 mbar is expanded from 2 . 4 0 L to 2 . 7 8 L at a constant temperature. What is the final pressure ( in atm ) of the the balloon?
-
What does ARMA mean for a sample time series? What do you need to know about the distribution of the errors to carry out this procedure? What if you had used maximum likelihood estimation? If you use...
-
Should mediators agree to help families deal with a single conflict when it is clear that the single conflict is simply one example of the bigger relationship conflict? Why or why not?
-
In a Lean-Agile Center of Excellence (LACE) an argument began between Lee, the Director of Software, and Clair, the Vice President of Human Resources. Clair wants to launch an Efficiency Agile...
-
2. The probability that person A will become a math teacher in 25 years is 0.4 while the probability that person B will become a math teacher in 25 years is 0.6. a. What is the probability that they...
-
You are interested in investing and are considering a portfolio comprised of the following two stocks. Their estimated returns under varying market conditions are provided: (note: it is difficult to...
-
My Life Chronicles Inc. collects 30% of its sales on account in the month of the sale and 70% in the month following the sale. If sales on account are budgeted to be $170,000 for June and $200,000...
-
The following data are accumulated by ChemLab Inc. in evaluating two competing capital investment proposals: Determine the expected average rate of return for each proposal. Amount of investment...
-
Sales volume has been dropping at Mumford Industries. During this time, however, the Shipping Department manager has been under severe financial constraints. The manager knows that most of the...
-
Find P(C | L). Forty-eight percent of all Californians registered voters prefer life in prison without parole over the death penalty for a person convicted of first degree murder. Among Latino...
-
In words, what is C | L? Forty-eight percent of all Californians registered voters prefer life in prison without parole over the death penalty for a person convicted of first degree murder. Among...
-
Find P(L C). Forty-eight percent of all Californians registered voters prefer life in prison without parole over the death penalty for a person convicted of first degree murder. Among Latino...
Study smarter with the SolutionInn App