Jan Usakos is a sole trader who does not operate a full double entry accounting system. However, he was able to provide the following information at the end of the second year of trading on 31 May 2021.

At 1 June 2020 N$ At 31 May 2021 N$

Fixtures and fittings at cost 120 000 140 000

Vehicles at cost 35 000 41 000

Creditors (Trade payables) 15 000 14 000

Stock (Inventory) 1 000 5 000

Debtors (Trade receivables) 25 500 31 000

Cash at bank 11 500 0

Bank overdraft - 12 000

Additional information Jan has not yet charged any depreciation on his vehicles at 31 May 2020 and 31 May 2021.

Jan uses the straight-line method at 10% per annum to calculate depreciation on vehicles.

During the year ended 31 May 2021

• total payments to creditors N$48 500 after receiving 3% discount.

• total receipts from debtors N$90 000 excluding discount of N$2 500.

Jan’s percentage of expenses (excluding depreciation) to sales is 20%.

REQUIRED

(a) Calculate Jan Usakos’ capital on 1 June 2020. (6)

(b) Calculate Jan Usakos’ sales and purchases for the year to 31 May 2021. Show your calculations.

i. Sales (3)

ii. Purchases (4)

(c) Prepare the Income Statement of Jan Usakos for the year ended 31 May 2021.

Answer rating: 100% (QA)

a To calculate Jan Usakos capital on 1 June 2020 we can use the accounting equation Capital Assets L... View the full answer