Question

Please help me with number 1,11 ,14 and 15
Use the information provided below to answer question 1: Ethekwini Traders provided you with the following information for the year ended 30 April 2020: Inventory (1 May 2019). 400 000 Purchases 600 000 Purchases returns ............... 40 000 Sales returns .... 100 000 | Carriage on purchases.................. 5 500 A physical inventory count on 30 April 2020 indicated that inventory on hand was R500 000. 1. The cost of sales amount on 30 April 2020 will be 500 000 460 000 534 500 405 500 465 500

Answer 1

1.

Cost of sales = Inventory + purchases - purchases return + carriage on purchases - Ending inventory

= 400,000 + 600,000 - 40,000 + 5,500 - 500,000

= $465,500

Correct option is (5)

14.

Prepayments are shown as current assets in the statement of financial position.

Correct option is (3)

Prepayments are the amounts paid in advance for services to be consumed in near future i.e. with in coming 12 months.

Hence, prepayments are considered as current assets.

15.

The financial performance of an entity can be determined by preparing a statement of profit or loss and other comprehensive income.

Correct option is (5)

Income statement or statement of profit and loss shows the amount of profit earned or loss suffered during a particular accounting period.

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