IGCSE Accounting Paper-1: Specimen Questions with Answers 78 - 80 of 338

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Question 78

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Short Answer▾

From the following data calculate sales made during the year by preparing the Memorandum Trading Account.

$

Stock on 1 - 1-2015 50000

Stock on 31 - 12 - 2015 40000

Purchases during the year 2015 500000

Rate of gross profit on sale 20 %

Wages paid 20000

Explanation

Memorandum Trading account for the year ending 31 - 12 - 2015

Memorandum Trading Account for the Year Ending 31 - 12 - 2015
Particular$Particular$
To Opening stock50000By sales (Balancing figure)662500
To Purchases500000By Closing stock40000
To Wages20000
To Gross profit

132500
702500702500

Gross profit is calculated on the balance of cost of goods sold. The following formula is used in calculating the gross profit:

Question 79

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Give two examples of non-current (intangible) assets.

Explanation

The non-current (intangible) assets are

  • Goodwill
  • Patents
  • Trade marks.
  • Copy rights

A non-physical assets which have useful life more than one year is known as intangible assets. Hence goodwill, patents, trademarks and copy rights are example of intangible assets.

Passage

Aieno bought fixed asset at a cost of $ 50000 on 1st Aprils 2014. Calculate its net book value as on 31st March 2016 if it is depreciated:

Question 80 (1 of 4 Based on Passage)

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Short Answer▾

Identify where the following items will appear in the trial balance and the effect in balance sheet.

Finding Debit or Credit Balance in Trial Balance and Balance Sheet Columen
AccountDebit or credit balance in trial balanceBalance sheet
Rent Outstanding
Capital
Drawings
Commission paid
Freehold premises

Table Title: Balance in trial balance and Balance sheet

Explanation

Shows Debit or Credit Balance in Trial Balance and Balance Sheet Columen
AccountDebit or credit balance in trial balanceBalance sheet
Rent OutstandingDebitCurrent assets
CapitalCreditNon – current liabilities
DrawingsDebitCapital
Commission paidDebitCurrent assets
Freehold premisesDebitNon-current assets

Rent outstanding, drawings, commission paid and freehold premises are appear in the debit balance of the trial balance. Capital will appear in the credit side of the trial balance. Freehold premises is fixed asset, rent outstanding and commission paid are current assets, and Drawing will be deducted from the capital account in the liability side.

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