3 Question [16 Marks] a. Assume that you are the president of your company and paid...

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3 Question [16 Marks] a. Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during the year. When are prices rising would you choose a FIFO LIFO or weighted average cost flow assumption? Explain using an example to support your answer. Would your choice be the same if prices were falling? [10] b. Riverside Inc. uses a perpetual inventory system and reports the following transactions for the month of July: Date July 1 July 4 July 9 July 17 July 21 July 31 Explanation Beginning inventory Purchase Purchase Sale Purchase Sale Units 12 8 5 23 6 7 Cost/Price R100.00 103.00 104.00 400.00 107.00 400.00 c. On August 11, 2024, ABC Cleaners wants to write off the R4000 account receivable from a customer. XYZ Hotels. Assume XYZ Hotels pays R4000 and record the transaction as normal accounts receivable. Required: Record the journal entry to write off this receivable. [6] 4 Question [20 Marks] On January 1, 2017, Beyond Adventures Ltd. purchased a safari jeep for use in their wilderness weekends. The following information is available. Cost R30,000 6 years or 80,000 kms. R8,000 15,000kms Estimated useful life Residual value Mileage in 2017 Required: 1. If the company depreciates based on 50% each in the years of acquisition and disposal, calculate the depreciation for 2018 under each of the methods below. Round yournal answer to nearest whole Rand. [2] [2] (a) Usage based (Units of Production) [2] (b) Straight-line 2. Compare the carrying amount for 2017 under each of these methods. (c) Double-declining balance - round percentage to two decimal places, 3. Which of the three methods results in the lowest net income for 2017? 4. Which of the three methods results in the lowest net income for 2018 if/5.000 TOTAL/TOTAAL: 116 tigght line kms were driven? [6] [2] [6] 3 Question [16 Marks] a. Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during the year. When are prices rising would you choose a FIFO LIFO or weighted average cost flow assumption? Explain using an example to support your answer. Would your choice be the same if prices were falling? [10] b. Riverside Inc. uses a perpetual inventory system and reports the following transactions for the month of July: Date July 1 July 4 July 9 July 17 July 21 July 31 Explanation Beginning inventory Purchase Purchase Sale Purchase Sale Units 12 8 5 23 6 7 Cost/Price R100.00 103.00 104.00 400.00 107.00 400.00 c. On August 11, 2024, ABC Cleaners wants to write off the R4000 account receivable from a customer. XYZ Hotels. Assume XYZ Hotels pays R4000 and record the transaction as normal accounts receivable. Required: Record the journal entry to write off this receivable. [6] 4 Question [20 Marks] On January 1, 2017, Beyond Adventures Ltd. purchased a safari jeep for use in their wilderness weekends. The following information is available. Cost R30,000 6 years or 80,000 kms. R8,000 15,000kms Estimated useful life Residual value Mileage in 2017 Required: 1. If the company depreciates based on 50% each in the years of acquisition and disposal, calculate the depreciation for 2018 under each of the methods below. Round yournal answer to nearest whole Rand. [2] [2] (a) Usage based (Units of Production) [2] (b) Straight-line 2. Compare the carrying amount for 2017 under each of these methods. (c) Double-declining balance - round percentage to two decimal places, 3. Which of the three methods results in the lowest net income for 2017? 4. Which of the three methods results in the lowest net income for 2018 if/5.000 TOTAL/TOTAAL: 116 tigght line kms were driven? [6] [2] [6]

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