ZIMSEC O Level Principles of Accounting: Single entry and Incomplete records: Example 2

  • This is a solution including workings for the question posted here
  • We are attempting to create an Income Statement so naturally we will start by calculating the sales figure for the year

Sales calculation for the year ended 31 March 20×6

Jane Sango Sales Calculation
Balance b/d2 643Bank44 846
Sales for the period (A)50 136Cash Sales3 921
Balance c/d4 012

52 779

52 779

NB This is not a real account hence the inclusion of cash sales in our entries. We could simply omit cash sales in the table and add it later on

Purchases Calculation

Purchases Calculation
Payments of trade creditors(B)22 177Balance b/d1 598
Balance c/d2 445Purchases23 024

24 622

24 622

William Sachikonye Income Statement of the year ended 31 March 20×6

Sales (A)50 136
Less Cost of Sales
Opening Stock3 210
Add Purchases(B)

23 024

26 234
Less Closing Stock

(4 063)

(22 171)

Gross Profit27 965
Less Expenses
Electricity1 090
Rent2 000
Advertising1 430
Insurance (946-177)769
Motor Vehicle Expenses(2 116+291-432)1 975
Depriciation1 640
(9 264)
Net Profit

18 701

Depriciation Calculations

For Motor vehicles:

20% of 5 100 = 1 020

For Shop Fittings

Value at the beginning4 200
Additions during the year2 550

6 200

10% Depreciation620

Total Depreciation for the year 620+1 020

= $1 640

We will not calculate disposal on items that were disposed nor on items that were taken for taken for personal use. Incidentally since the fittings were sold at cost profit on disposal is $0 so it is not included in the Income Statement at all.

The Statement of Financial Position for this question can be found here

To access more topics go to the Principles of Accounting Notes.


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