IGCSE Accounting Paper-2: Specimen Questions with Answers 175 - 177 of 189

Question 175

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Write in Brief

One Liner▾

Abhay sold goods on credit to Vikram for $ 1,000, offering a discount of 3 % for payment within 15 days. Vikram paid within 15 days. Calculate the amount paid by Vikram.

(Marks 2)

Explanation

Passage

The following balances were extracted from Alexa’s books on 31 December 2,019.

Alexa’s Books on 31 December 2,019
$

Opening Stock

3,500

Sales

75,000

Purchases

50,000

Debtors

7,000

Creditors

10,000

Administration Expenses

8,000

Cash at bank

4,000

Drawings

6,000

Machinery

50,000

Provision for depreciation on Machinery

15,000

Capital

?

Question 176 (1 of 3 Based on Passage)

Write in Short

Short Answer▾

Prepare Alexa’s Statement of Income for the year ended 31 December 2,019. (Marks 12)

Income Statement

For the year ended 31 December 2,019

For the Year Ended 31 December 2,019
$

$

Explanation

Income Statement

For the year ended 31 December 2,019

For the Year Ended 31 December 2,019
$

$

Sales

75,000

Less: Cost of Goods Sold-

Purchases

50,000

Add: Opening Stock

3,500

53,500

Less: Closing Stock

2,500

51,000

Gross Profit

24,000

Less: Operating Expenses-

Administration Expenses

8,000

Depreciation (I)

8,000

16,000

Net Profit

8,000

Working Notes:

(I) Depreciation for current year- 20% on Reduced balance i. e. on

Question 177 (2 of 3 Based on Passage)

Write in Short

Short Answer▾

Prepare Alexa’s Trial Balance as at 31 December 2,019 showing her Capital A/c balance. (Marks 12)

31 December 2,019 Showing Her Capital a/C Balance
Ledger Account

Debit

$

Credit

$

Explanation

31 December 2,019 Showing Her Capital a/C Balance
Ledger Account

Debit

$

Credit

$

Opening Stock

3,500

Sales

75,000

Purchases

50,000

Debtors

7,000

Creditors

9,500

Administration Expenses

8,000

Cash at bank

4,000

Drawings

6,000

Machinery

50,000

Provision for depreciation on Machinery

10,000

Capital

34,000

Total

128,500

128,500

All expenses and assets have a debit balance whereas all the incomes and liabilities have a credit balance.

  • Machinery, Opening Stock, Debtors, Cash at bank are assets.
  • Purchases, Administration Expenses are expenses.

  • Provision for Depreciation is a Contra Asset A/c as it reduces assets. So, it has a credit balance.

  • Capital and Creditors are liabilities.

  • Sales is an Income.

  • Drawings are Contra Capital A/c as it reduces capital. So, it has a debit balance.

The balance of capital is calculated as follows-

(I) The closing stock was valued at $ 2,500

(II) The depreciation for the current year is charged@20% on reduced balance.

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