QUESTION 2 20 Marks

1. Let's say that the opening balance of receivables for the Jax Traders business is

N$30,000, and the opening balance of credit payables is N$12,000. There has been a

total receipt of N$55,000 from the customers, N$15,000 of which pertains to cash

customers. The closing balance on receivables was N$37,000, and the closing balance

on payables was N$5,000. The entire amount of discounts granted was N$3,000, and the

total amount of discounts received was N$1,800. What is the total amount for all sales

made this year? (2 Marks)

2. Donald's beginning balance on trade payables amount to N$15,000. The bank deposit to

credit supply was N$14,000. Discounts totaled N$500, and the closing balance on trade

payables was N$13,000. Calculate your annual purchases. (2 Marks)

3. The following information relates to Big head business:

01 January Electricity accrued N$250

Rent prepaid N$300

Cash paid in the year Electricity N$1,000

Rent N$2,000

On 31 December Electricity accrued N$300

Rent prepaid N$400

What are the income statement charges for electricity and rent for the year? (4 Marks).

4. The following details relate to Chi Traders.

Sales N$5,000

Purchases N$3,500

Inventory Opening N$600

Inventory Closing N$100

Calculate grofit profit margin and gross profit mark-up as a percentage. (6 Marks)

5. Jack Matisa have his business inventory destroyed by fire. The following information is available.

Mark-up 25%

Sales N$100,000

Opening Stock N$10,000

Purchases N$82,000

Closing inventory after fire N$3,000

What is the cost of inventory lost in the fire? (3 Marks)

6. Fred lost his entire inventory in a fire. His unsigned insurance policy is still in the pocket

of his good suit. He supplied you with the following information:

Mark-up 25%

Sales N$10,000

Opening Stock N$2,000

Purchases N$7,500

Calculate closing stock that Fred was supposed to have claimed from his insurance policy. (3 Marks)