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

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Question 175

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Write in Brief

One Liner▾

Abhay sold goods on credit to Vikram for $ 1000, 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 2019.

Alexa՚s Books on 31 December 2019
Dollar $
Opening Stock3500
Sales75000
Purchases50000
Debtors7000
Creditors10000
Administration Expenses8000
Cash at bank4000
Drawings6000
Machinery50000
Provision for depreciation on Machinery15000
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 2019. (Marks 12)

Income Statement

For the year ended 31 December 2019

For the Year Ended 31 December 2019
$$

Explanation

Income Statement

For the year ended 31 December 2019

For the Year Ended 31 December 2019
$$
Sales75000
Less: Cost of Goods Sold-
Purchases50000
Add: Opening Stock3500
53500
Less: Closing Stock250051000
Gross Profit24000
Less: Operating Expenses-
Administration Expenses8000
Depreciation (I)800016000
Net Profit8000

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 2019 showing her Capital A/c balance. (Marks 12)

31 December 2019 Showing Her Capital a/C Balance
Ledger AccountDebit $Credit $

Explanation

31 December 2019 Showing Her Capital a/C Balance
Ledger AccountDebit $Credit $
Opening Stock3500
Sales75000
Purchases50000
Debtors7000
Creditors9500
Administration Expenses8000
Cash at bank4000
Drawings6000
Machinery50000
Provision for depreciation on Machinery10000
Capital34000
Total128500128500

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 $ 2500

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

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