Accounting Solutions

This document provides solutions to various accounting problems. It covers topics such as the accounting equation, debtor control accounts, bank account preparation, VAT input/output ledgers, current and appropriation accounts, and the equity section of the statement of financial position. Detailed solutions with explanations and working notes are included for each problem. The solutions demonstrate the preparation of financial statements and the application of accounting principles. The document also includes a trial balance and the calculation of net profit, showcasing a comprehensive approach to accounting problem-solving.

Contents
Solution -1....................................................................................................................................................2
Solution-2.....................................................................................................................................................3
2.1 ACCOUNTING EQUATION:............................................................................................................3
2.2 REDRAFTING THE DEBTOR CONTROL ACCOUNT...............................................................................4
Solution-3.....................................................................................................................................................6
3.1 PREPARATION OF BANK ACCOUNT..............................................................................................6
3.2 VAT INPUT / VAT OUTPUT LEDGERS............................................................................................9
Solution - 4.................................................................................................................................................11
4.1 PREPARATION OF CURRENT A/C – BLUE AND APPROPRIATION A/C..........................................11
4.2 EQUITY SECTION OF THE STATEMENT OF FINANCIAL POSITION................................................14
Solution-5...................................................................................................................................................15

Solution -1
1.1 B
1.2 D
1.3 C
1.4 A
1.5 A

Solution-2
2.1 ACCOUNTING EQUATION:
Transaction
No.
ASSET
=
LIABILITIE
S
+
EQUITY
Bank
Debtor
s Stationery Loan Drawings
Bad
debt
Interest
on fixed
deposit
2.1.1 500 (500) = - + - - -
2.1.2 - - (50) = - + (50) - -
2.1.3 - (400) - = - + - (400) -
2.1.4 100 - - = - + - - 100
2.1.5 (2,000) - - = (2,000) + - - -
Total (1,400) (900) (50) (2,000) (50) (400) 100

2.2 REDRAFTING THE DEBTOR CONTROL ACCOUNT
DEBTOR CONTROL ACCOUNT
Date Particulars Amount Date Particulars Amount
01-May-16 Balance b/d b/d
100,
000 31-May-16 Bad debts J
1,0
00
31-May-16 Bank
CP
J
2,
000 31-May-16 Bank and Discount
CR
J
90,0
00
31-May-16 Interest income J 200 31-May-16 Sales returns
SR
J
3,8
00
31-May-16 Sales SJ
80,
000 31-May-16
R. Smith's Balance
trnsfd @
1,0
00
31-May-16 Undercasted Sales* SJ
2,
000 31-May-16 Bad debts @#
1,2
00
31-May-16 Error rectified **
1,
000
31-May-16
Error in credit note amount
*** 450 31-May-16 Balance c/d
91,67
4
31-May-16 Cheque dishonoured #
3,
000
31-May-16 Interest income ## 24
188,
674
188,6
74
* Sales undercasted by R2000 rectified
** Invoice issued to debtor erroneously enetered in SRJ, rectified

*** Error in amount recording, recorded as R940 instead of R490
# Cheque returned by bank due to insufficient funds recorded
## Two months interest income recorded
@ Balance in R. Smith's account transferred R1000
@# Bad debts recorded (2000*0.60)

Solution-3
3.1 PREPARATION OF BANK ACCOUNT
IN THE BOOKS OF WALNUT STORES
Bank A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Fixed deposit
12,0
00 31/01/2016 Balance b/d 10,000
31/01/2016
Interest income on fixed
deposit
1
80 31/01/2016
Debtor (cheque
dishonoured) 900
31/01/2016 Donation (Soccer club)
2,0
00 31/01/2016 Bank charges 550
31/01/2016 Stationery (error in posting)
3,6
00 31/01/2016 Balance c/d 6,330
17,7
80 17,780
CONTRA ACCOUNTS
Debtor A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Bank 900 31/01/2016 Balance c/d 950
31/01/2016 Discount allowed 50
950 950

Discount Allowed A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Balance c/d 50 31/01/2016 Debtor 50
50 50
Bank Charges A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Bank 550 31/01/2016 Balance c/d 550
550 550
Fixed Deposit A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Balance c/d 12,000 31/01/2016 Bank 12,000
12,000 12,000
Interest income on Fixed Deposit A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Balance c/d 180 31/01/2016 Bank 180
180 180
Donation A/c

Date Particulars Amount Date Particulars Amount
31/01/2016 Balance c/d 2,000 31/01/2016 Bank 2,000
2,000 2,000
Stationery A/c
Date Particulars Amount Date Particulars Amount
31/01/2016 Balance c/d 3,600 31/01/2016 Bank 3,600
3,600 3,600

3.2 VAT INPUT / VAT OUTPUT LEDGERS
ZINHLE TRADERS
VAT INPUT
Date Particulars Amount Date Particulars Amount
June, 16
Purchased inventory on
credit from suppliers 700 June, 16
Returned inventory to
creditors
1
12
June, 16
Inventory purchased by
cheque 560 June, 16
Settlement discounts
received 42
June, 16
Equipment purchased on
credit 210 June, 16 SARS: VAT account
1,3
16
1,
470
1,4
70
VAT OUTPUT
Date Particulars Amount Date Particulars Amount
June, 16 Goods returned by debtors 70 June, 16 Cash sales
4
20
June, 16
Discount allowed to debtors in
settltment 28 June, 16 Goods sold on credit
8
40
June, 16 SARS: VAT account
1,
162

1,260 1,260

WORKING NOTE:
CALCULATION OF AMOUNT OF VAT
Particulars Amount
excluding VAT
Amount
including
VAT
Amount of
VAT
Purchased inventory on credit
from suppliers
5,00
0
5,700.
00 700.00
Returned inventory to creditors
80
0
912.
00 112.00
Cash sales
3,00
0
3,420.
00 420.00
Goods sold on credit
6,00
0
6,840.
00 840.00
Inventory purchased by cheque
4,00
0
4,560.
00 560.00
Goods returned by debtors
50
0
570.
00 70.00
Discount allowed to debtors in
settlement
20
0
228.
00 28.00
Settlement discounts received
30
0
342.
00 42.00
Equipment purchased on credit
1,50
0
1,710.
00 210.00

Solution - 4
4.1 PREPARATION OF CURRENT A/C – BLUE AND APPROPRIATION A/C
Current a/c: Blue
Date Particulars Amount Date Particulars Amount
01-Mar-15 Balance b/d
24,00
0 29-Feb-16 Interest on capital
37,50
0
29-Feb-16 Drawings
160,00
0 29-Feb-16 Partners Salary
152,40
0
29-Feb-16 Balance c/d
84,68
0 29-Feb-16 Special Bonus
13,20
0
29-Feb-16 Appropriation of Profit
65,58
0
268,68
0
268,68
0
Appropriation a/c
Date Particulars Amount Date Particulars Amount
29-Feb-16 Interest on capital (WN1) 29-Feb-16 Profit for the year 500,000
- Blue 37,500
- Berry 22,500
29-Feb-16 Partners Salary (WN 2)
- Blue 152,400
- Berry 165,100
29-Feb-16
Bonus to Blue
(12000*110%) 13,200