businessman who buys packages of goods and wholesales the package for cash. Hi
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Q: guid iabil odger ingle orris
A: Given:
Neil Brown is a businessman who buys packages of goods and wholesales
the package for cash. His business is registered as a Vat Vendor. During
March 2022 he purchased for cash a package of goods for R28 000
(exclusive of 15% Vat). Neil used a mark-up of 30% on the cost price and
sold the package for R41 860 (Inclusive of 15% VAT). Neil uses the perpetual
inventory system to keep records of his trading activities.
Required:
Record general
goods. You do not have to record the dates but must include a brief narration
appropriate for both the purchase and sale of the goods above.
Step by step
Solved in 2 steps with 1 images
On this question may you please explain how it came to 41880 instead of 41860
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- Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.Blue Barns purchased 888 gallons of paint at $19 per gallon from a supplier on June 3. Terms of the purchase are 2/15, n/45, invoice dated June 3. Blue Barns pays their account in full on June 20. On June 22, Blue Barns discovers 20 gallons are the wrong color and returns the gallons for a full cash refund. Record the journal entries to recognize these transactions for Blue Barns.
- Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.CoolShoes sells its elite tennis shoes to sports retailers throughout the country. When introducing its new RF17 shoes that sell for 125 per pair, the company includes a 15 rebate form. The rebate form can be used when the customer ultimately purchases the shoes. CoolShoes sells 100 pairs of shoes and estimates that 80% of the rebate forms will be returned by customers for a rebate. Determine the transaction price that CoolShoes should use when recognizing revenue from sale of one pair of the RF17 shoe.EM Company, a grocery retailer, operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on groceries. Program members can redeem the points for further groceries. The points have no expiry date. During2019, the sales amounted to P7,000,000 and the entity have granted 10,000points. Management expects that only 80% of the points will be redeemed. The cost of each loyalty point is P100. As of December 31, 2019, 4,800 points have already been redeemed. In2020, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2020, the entity redeemed 2,400 points. What amount should be reported as revenue earned from loyalty points in 2020? A.P700,000B.P210,000C.P175,000D.P200,000
- Argon Traders is a business located in Centurion.Argon Traders is a registered VAT vendor and trades only with registered VATvendors that can provide tax invoices. The business charges 15% VAT on all its sales.All amounts are inclusive of VAT, unless VAT is not applicable.Argon Traders sells good for cash and on credit.Transaction 1: On the 1st of March 2022 Argon Traders sold goods for R15 000excluding VAT) on credit to Mr Neon.Goods are marked up 20% on cost Record transaction 1 in the applicable general ledger accounts using the perpetualinventory system.Africa Traders is a registered VAT vendor and uses the periodic inventory system. Africa Traders buys and sells furniture and equipment for cash or on credit. On 1 March 2021, Africa Traders sold furniture on credit to Mrs A South to the amount of R25 300. On 27 April 2021, Mrs South paid R21 300,00 in full settlement of her account. On the same day Mrs South purchased a new coffee table on the clearance sale. The selling price of the coffee table was R3 600 (including VAT). Mrs South paid cash after receiving a further 20% cash discount on the selling price. Required: What amount will be recorded in the trade receivables column of the cash receipts journal of Africa Traders on 27 April 2021? NB: Instructions 1. Do not type the amount with any spaces as separators for thousands (eg: 12141.72) 2. Use a full stop to indicate any decimals (eg: 1000.01) 3. You must enter cents even if it is 0 (eg .00) 4. Only show the amount, do not show the R (eg: 12141.72) Answer:Kylie Co. is a VAT-registered merchandising company. Kylie buys products from a local supplier for P10,000 each (VAT-exclusive), and usually sells the items with a 30% markup. For December 2022, due to market disruption, Kylie was forced to sell the products for P10,080 each (VAT-inclusive). Kylie was able to make 50 individual sales during the month.Assume Kylie remits its taxes the following month, how much is the VAT Payable to be presented in the Statement of Financial Position as of December 31, 2022? VAT rate applicable for both purchase and sale transaction is 12%
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