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12 000 4 000 1 nd fittings 1 000 2 000 50 000 10 000 2 30.000

12 000 4 000 1 nd fittings 1 000 2 000 50 000 10 000 2 30.000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Financial Accounting II / © ICCG / Page 46 Question 1 The following figures were extracted from head office books of the HPD Co., and submitted by the branches as at 31 December 2006. Head Office Durban Branch Prieska Branch Cash at bank (Dr) Branch account Durban (Dr) Branch account Prieska (Dr) Creditors Debtors Furniture and fittings at cost Head office account (Cr) Land and buildings at cost Vehicles at cost 10 000 3 000 2 000 4 800 4 800 4 600 2 000 1 000 7 000 6 000 4 000 1 500 1 500 2 000 4 600 4 900 12 000 4 000 1 000 Depreciation provision Furniture and fittings 1 000 400 300 Vehicles 2 000 400 Owner's capital 50 000 Stock at 31 December Administration expenses Gross profit 4 000 3 000 5 800 10 000 2 000 3 000 7 600 30 000 31 000 Durban Branch sent goods valued at R200 to Prieska Branch. The entries were made in the branch books, but not in the head office books. Prieska sent Head Office R100, which was only received on 3 January 2002. Required Pass all journal entries necessary to bring the branch trial balances into head office books. Show the branch accounts and the branch income statement accounts of the HPD Co. as at 31 December 2006. Question 2 Kariema Samaar carries on a retail business under the name of KS Stores (Pty) Ltd. and has a branch in Bloemfontein, the head office and principal store being in Cape Town. She has an agreement with the manager of the branch whereby the manager is to receive a commission of 10% of the net profits of the branch calculated before such commission is deducted. The trial balances extracted on 30 June 2007 from the sets of books kept at Bloemfontein and Cape Town were as follows. Financial Accounting II / © ICG / Page 47 Bloemfontein Cane Town
Transcribed Image Text:Financial Accounting II / © ICCG / Page 46 Question 1 The following figures were extracted from head office books of the HPD Co., and submitted by the branches as at 31 December 2006. Head Office Durban Branch Prieska Branch Cash at bank (Dr) Branch account Durban (Dr) Branch account Prieska (Dr) Creditors Debtors Furniture and fittings at cost Head office account (Cr) Land and buildings at cost Vehicles at cost 10 000 3 000 2 000 4 800 4 800 4 600 2 000 1 000 7 000 6 000 4 000 1 500 1 500 2 000 4 600 4 900 12 000 4 000 1 000 Depreciation provision Furniture and fittings 1 000 400 300 Vehicles 2 000 400 Owner's capital 50 000 Stock at 31 December Administration expenses Gross profit 4 000 3 000 5 800 10 000 2 000 3 000 7 600 30 000 31 000 Durban Branch sent goods valued at R200 to Prieska Branch. The entries were made in the branch books, but not in the head office books. Prieska sent Head Office R100, which was only received on 3 January 2002. Required Pass all journal entries necessary to bring the branch trial balances into head office books. Show the branch accounts and the branch income statement accounts of the HPD Co. as at 31 December 2006. Question 2 Kariema Samaar carries on a retail business under the name of KS Stores (Pty) Ltd. and has a branch in Bloemfontein, the head office and principal store being in Cape Town. She has an agreement with the manager of the branch whereby the manager is to receive a commission of 10% of the net profits of the branch calculated before such commission is deducted. The trial balances extracted on 30 June 2007 from the sets of books kept at Bloemfontein and Cape Town were as follows. Financial Accounting II / © ICG / Page 47 Bloemfontein Cane Town
Question 1 On 2 July 2005, H Ltd. purchased the entire issued ordinary share capital of S Ltd. On this date, S Ltd. had a retained income balance of R4 000 and no general reserve. Any purchase difference is to be attributed to the fixed assets of S Ltd. On 30 June 2007, the trial balances of the two companies were as follows: H Ltd. S Ltd. R R Share capital (R1 ordinary shares) General reserve Retained income Accumulated depreciation 40 000 20 000 10 000 5 000 34 000 10 000 6 000 R90 000 R35 000 Fixed assets at cost 30 000 14 000 Investments in S Ltd. 36 000 Net current assets 24 000 21 000 R90 000 R35 000 Included in the net current assets of both companies is a dividend due by S Ltd. to H Ltd. of R2 000. Note: Required Draw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on 30 June 2007. Question 2 H Ltd. bought all the shares in S Ltd. on 30 June 2004 when the retained income of S Ltd. was R8 000 and the general reserve was R12 000. The following list of balances appeared in the books of the two companies on 30 June 2007. H Ltd. S Ltd. R R Debits Land and buildings at cost Equipment at cost Investment in S Ltd. Stock 60 000 28 000 44 000 24 000 80 000 48 000 24 000 Bank 60 000 28 000 R292 000 R104 000 Credits Share capital (ordinary R1 shares) General reserve Retained income Creditors Accumulated depreciation on equipment 120 000 48 000 88 000 20 000 20 000 18 000 52 000 10 000 12 000 8 000 R292 000 R104 000 Financial Accounting II / © ICG / Page 55 Required Draw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on 30 June 2007. Question 3
Transcribed Image Text:Question 1 On 2 July 2005, H Ltd. purchased the entire issued ordinary share capital of S Ltd. On this date, S Ltd. had a retained income balance of R4 000 and no general reserve. Any purchase difference is to be attributed to the fixed assets of S Ltd. On 30 June 2007, the trial balances of the two companies were as follows: H Ltd. S Ltd. R R Share capital (R1 ordinary shares) General reserve Retained income Accumulated depreciation 40 000 20 000 10 000 5 000 34 000 10 000 6 000 R90 000 R35 000 Fixed assets at cost 30 000 14 000 Investments in S Ltd. 36 000 Net current assets 24 000 21 000 R90 000 R35 000 Included in the net current assets of both companies is a dividend due by S Ltd. to H Ltd. of R2 000. Note: Required Draw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on 30 June 2007. Question 2 H Ltd. bought all the shares in S Ltd. on 30 June 2004 when the retained income of S Ltd. was R8 000 and the general reserve was R12 000. The following list of balances appeared in the books of the two companies on 30 June 2007. H Ltd. S Ltd. R R Debits Land and buildings at cost Equipment at cost Investment in S Ltd. Stock 60 000 28 000 44 000 24 000 80 000 48 000 24 000 Bank 60 000 28 000 R292 000 R104 000 Credits Share capital (ordinary R1 shares) General reserve Retained income Creditors Accumulated depreciation on equipment 120 000 48 000 88 000 20 000 20 000 18 000 52 000 10 000 12 000 8 000 R292 000 R104 000 Financial Accounting II / © ICG / Page 55 Required Draw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on 30 June 2007. Question 3
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