b. Uncollectable Debts written off amounted to R1 500 during 2020.3. Cash received from customers for the year amounted to R145 000.4. The business utilised the perpetual inventory system to record inventory.5. Cash payments made to suppliers for the credit purchase of inventory amounted to R95 000.6. During the year, R5 670 worth of credit notes were received from suppliers for the return ofinventory purchased on credit.7. Included in accounts payable the following amounts owing to suppliers for the purchase ofinventory amounted to:а.At 31 December 2019: R12 000b. At 31 December 2020: R20 0008. Distributions to the owner amounted to R5 000.9. The owner contributed R6 000 worth of furniturebe used by the business during the 2020financial year.10. No other capital contributions were made during the year.Required:1) Calculate the value of Sales that will be reported in the Statement of Profit and Loss for theperiod ended 31 December 2020.2) Calculate the value of Cost of Sales that will be reported in the Statement of Profit and Lossfor the period ended 31 December 2020.3) Calculate the Net Profit for the period ended 31 December 2020.4) Calculate the total operating expenses incurred for the period ended 31 December 2020. (Ignore VAT)Looking Glass is a window repair business and has a year end of 31 December. The followingStatement of Financial Position was reported for the year ended 31 December 2020:Looking GlassStatement of Financial Position at 31 December 202031/12/202031/12/2019RASSETSNon-current AssetsFurniture and fittings52 00050 000Cost66 00060 000Accumulated depreciation000)Current Assets74 00059 200Inventory32 00030 000Accounts Receivable30 00019 200Bank12 00010 000126 000109 200EQUITY AND LIABILITIESEquityСapital104 00094 200Current LiabilitiesAccounts Payable22 00015 000126 000109 200The following information is available:5/71. All sales are made on credit.2. Accounts Receivable is reported at the carrying value after taking into account:а.Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500at 31 December 2020.

Name: b. Uncollectable Debts written off amounted to R1 500 during 2020.3.
Uploaded: 2024-03-05T11:50:36.000Z
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Description: b. Uncollectable Debts written off amounted to R1 500 during 2020.3. Cash received from customers for the year amounted to R145 000.4. The business utilised the perpetual inventory system to record inventory.5. Cash payments made to suppliers for th

Since we answer only upto three sub-parts, we shall answer first three. Please resubmit a new…

Business

Accounting

Looking Glass is a window repair business and has a year end of 31 December. The following Statement of Financial Position was reported for the year ended 31 December 2020: Looking Glass Statement of Financial Position at 31 December 2020 31/12/2020 31/12/2019 ASSETS Non-current Assets Furniture and fittings 52 000 50 000 Cost 66 000 60 000 Accumulated depreciation (14 000) (10 000) Current Assets 74 000 59 200 Inventory 32 000 30 000 Accounts Receivable 30 000 19 200 Bank 12 000 10 000 126 000 109 200 EQUITY AND LIABILITIES Equity Capital 104 000 94 200 Current Liabilities Accounts Payable 22 000 15 000 126 000 109 200 The following information is available: 1. All sales are made on credit. 2. Accounts Receivable is reported at the carrying value after taking into account: a. Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500 at 31 December 2020.

Looking Glass is a window repair business and has a year end of 31 December. The following Statement of Financial Position was reported for the year ended 31 December 2020: Looking Glass Statement of Financial Position at 31 December 2020 31/12/2020 31/12/2019 ASSETS Non-current Assets Furniture and fittings 52 000 50 000 Cost 66 000 60 000 Accumulated depreciation (14 000) (10 000) Current Assets 74 000 59 200 Inventory 32 000 30 000 Accounts Receivable 30 000 19 200 Bank 12 000 10 000 126 000 109 200 EQUITY AND LIABILITIES Equity Capital 104 000 94 200 Current Liabilities Accounts Payable 22 000 15 000 126 000 109 200 The following information is available: 1. All sales are made on credit. 2. Accounts Receivable is reported at the carrying value after taking into account: a. Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500 at 31 December 2020.

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

b. Uncollectable Debts written off amounted to R1 500 during 2020.
3. Cash received from customers for the year amounted to R145 000.
4. The business utilised the perpetual inventory system to record inventory.
5. Cash payments made to suppliers for the credit purchase of inventory amounted to R95 000.
6. During the year, R5 670 worth of credit notes were received from suppliers for the return of
inventory purchased on credit.
7. Included in accounts payable the following amounts owing to suppliers for the purchase of
inventory amounted to:
а.
At 31 December 2019: R12 000
b. At 31 December 2020: R20 000
8. Distributions to the owner amounted to R5 000.
9. The owner contributed R6 000 worth of furniture
be used by the business during the 2020
financial year.
10. No other capital contributions were made during the year.
Required:
1) Calculate the value of Sales that will be reported in the Statement of Profit and Loss for the
period ended 31 December 2020.
2) Calculate the value of Cost of Sales that will be reported in the Statement of Profit and Loss
for the period ended 31 December 2020.
3) Calculate the Net Profit for the period ended 31 December 2020.
4) Calculate the total operating expenses incurred for the period ended 31 December 2020.

(Ignore VAT)
Looking Glass is a window repair business and has a year end of 31 December. The following
Statement of Financial Position was reported for the year ended 31 December 2020:
Looking Glass
Statement of Financial Position at 31 December 2020
31/12/2020
31/12/2019
R
ASSETS
Non-current Assets
Furniture and fittings
52 000
50 000
Cost
66 000
60 000
Accumulated depreciation
000)
Current Assets
74 000
59 200
Inventory
32 000
30 000
Accounts Receivable
30 000
19 200
Bank
12 000
10 000
126 000
109 200
EQUITY AND LIABILITIES
Equity
Сapital
104 000
94 200
Current Liabilities
Accounts Payable
22 000
15 000
126 000
109 200
The following information is available:
5/7
1. All sales are made on credit.
2. Accounts Receivable is reported at the carrying value after taking into account:
а.
Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500
at 31 December 2020.

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