CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 Question 2: [37 marks 55 Minutes] The Flying Kite (PTY) Limited, owned by Jos

[answerhappygod]

Cacn011 Financial Accounting Ia June 2022 Question 2 37 Marks 55 Minutes The Flying Kite Pty Limited Owned By Jos 1 (65.93 KiB) Viewed 8 times

CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 Question 2: [37 marks 55 Minutes] The Flying Kite (PTY) Limited, owned by Josh String and Caleb Fuse, sells kites and related accessories. The Flying Kite uses the perpetual inventory system to account for inventory movements. The trial balance on 31 March 2022, the end of the accounting period, is shown below: Share capital Equipment at cost Accumulated depreciation: Equipment Accounts receivable Accounts Payable VAT control Input VAT receivable Output VAT payable Bank Merchandise inventory Sales Cost of sales General expenses Salaries & wages Entertainment and hospitality Dr R100 000 45 550 4950 6980 122 500 41 Page 256 000 43 790 57 360 3.330 The following transactions for March 2022 have not yet been processed: CR R200 000 26 000 44 960 2 540 8360 358 600 (i) Bought kites on credit from Wild Toys. The cost price amounted to R12 800 (excluding VAT). (ii) Paid R365 to North Transporters for transporting inventory purchased to the store. (i) Sold inventory with a cost of RB 900 on credit to The Saints Club. This sale was priced to realise a profit margin of 50 per cent on cost. (iv) Bought inventory and paid by bank transfer to supplier operating a bank account with standard bank. A tax invoice was received for R4 560. (v) Sold inventory with a mark-up of 33.3% on cost for cash for R1 368. (vi) The Saints Club returned faulty merchandise, which had been recorded on the tax invoice for a total of R342. (vii) Received the monthly statement from the Johannesburg Country Club in respect of March's entertainment expenses, and an amount of R450, excluding VAT, was payable. (viii) Prepared and approved a bank transfer for R2 540 to the SARS in settlement of February's VAT liability. (ix) Received an electronic funds transfer from Saints Club for R12 200 You are required to: a) Prepare the journal entries to record the above transactions in the accounting records of Flying Kite (PTY) Limited. Ignore narrations to the general journal entries. [31 marks] b) Prepare the input VAT receivable and output VAT payable accounts in the general ledger of Flying Kite (PTY) Limited. [6 marks] ||