Question

For the following questions write down corresponding correct letter next to the question number only. Eg. 1.11 A

1.8 Sales revenue amounted to R167 000, and cost of sales amounted to R100 000. Other operating income amounted to R13 000, and other operating costs amounted to R25 000. Finance costs were R10 000. The profit for the period was: a) R19 000 b) R32 000 c) R45 000 d) R65 000 e) R89 000

1.9 The owner?s equity on 1 January 2016 amounted to R400 000. Profit for the year was R43 000. During 2016 the owner invested an additional R30 000 in the business. Drawings for the period amounted to R18 000. The amount of equity recognised on 31 December 2016 amounted to: a) R412 000 b) R430 000 c) R442 000 d) R443 000 e) R455 000

1.10 A customer orders R25 000?s worth of goods on 21 December 2015 (cost price: R20 000) The goods are delivered on 27 December 2015, and the customer pays the R25 000 on 4 January 2016. The business has a financial year-end of 31 December. As a result of this transaction, profit for the year: a) Decreased by R5 000 b) Decreased by R25 000 c) Increased by R5 000 d) Increased by R20 000 e) Increased by R25 000

Answer 1

Answer 1.8 - c)R45,000
Sales Revenue	167,000.00
Cost of sales	100,000.00
Gross Margin	67,000.00
Other Operating Income	13,000.00
Other Operating Costs	25,000.00
Net Operating Income	55,000.00
Finance Costs	10,000.00
Net Income	45,000.00
Answer 1.9 - e) R455,000
Statement of Owners' Equity
Beginning Balance - Jan 1, 2016	400,000.00
Net Income	43,000.00
Additional Investment	30,000.00
Sub-total	473,000.00
Drawings	(18,000.00)
Ending Balance - Dec 31, 2016	455,000.00
Answer 1.10 -c) Increased by R5,000
Sales Revenue	25,000.00
Cost of Goods Sold	20,000.00
Gross Margin	5,000.00