IGCSE Accounting Paper-2: Specimen Questions with Answers 175 - 177 of 189
Question 175
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.
| $ | |
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
| $ | $ |
Explanation
Income Statement
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)
| Ledger Account | Debit $ | Credit $ |
Explanation
| 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.