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State why the inventory was included at a reduced value. (c) (i)
See it on the paper →Complete the table by indicating with a tick (3) the effect on Rushil’s gross profit of including his damaged inventory at a reduced value. effect on Rushil’s gross profit increase decrease Rushil is concerned that his credit customers are taking too long to pay him. He is considering allowing a 2.5% cash discount on a...
See it on the paper →Suggest two courses of action that Talula might take to ensure that her profit for the year is not affected. For each course of action, state what impact the course of action might have on Talula’s business. An example has been provided in the table. Suggested course of action Impact on the business Increase service pr...
See it on the paper →Calculate the valuation of Grace’s inventory of handbags at 31 March 2025.
See it on the paper →Calculate the value of Lottie’s inventory at 30 April 2024. Lottie pays $360 per annum for insurance. On 1 May 2023, insurance of $60 was prepaid. On 1 August Lottie paid $360 by bank transfer for the year 1 July 2023 to 30 June 2024. REQUIRED
See it on the paper →Prepare the inventory account for the year ended 30 September 2023. Logan Inventory account Date Details $ Date Details $
See it on the paper →Explain to Anika the difference between capital expenditure and revenue expenditure. Why is this difference between the two important when preparing the financial statements?
See it on the paper →State two advantages of maintaining a petty cash book. Rasheed’s transactions for the month of September 2022 were as follows. September 2 7 13 18 25 29 Paid taxi fare Paid purchases ledger account of Crystal Bought postage stamps Paid purchases ledger account of Kalpa Paid bus fare Paid cleaner $ 12 16 10 15 5 28 REQU...
See it on the paper →Complete Rasheed’s petty cash book for the month of September 2022 on the next page. Balance the petty cash book and bring down the balance on 1 October 2022. Clearly show September 1 100 2022 Date Total Received $ Cash Details Total paid $ $ Travel Rasheed – Petty Cash Book $ Postage $ Cleaning Ledger accounts $
See it on the paper →Record the entries which would be made in the following accounts in September 2022. It is not necessary to total or balance the accounts. Rasheed Postage account Date Details $ Date Details $ Purchases ledger Crystal account Date Details $ Date Details $ At the end of his first year in business Rasheed had a closing in...
See it on the paper →Prepare the inventory account at 30 September 2022. Balance the account and bring down the balance on 1 October 2022. Rasheed Inventory account Date Details $ Date Details $
See it on the paper →Calculate the value of Nala’s inventory at 28 February 2022.
See it on the paper →Discuss the implications of Shiv valuing the inventory on 31 August 2021 at selling price. PLEASE TURN OVER
See it on the paper →Calculate the correct value of inventory at 30 September 2020.
See it on the paper →Calculate the total value of Rani’s inventory at 31 March 2020. Rani later discovered that she had an amount of inventory of item D at 31 March 2020. This inventory originally cost $1660. She considered this inventory to be obsolete. REQUIRED
See it on the paper →Explain to Rani how the value of the inventory of item D affected the profit for the year ended 31 March 2020.
See it on the paper →Advise Rani whether or not she should stop purchasing item D to avoid having obsolete inventory in the future. Justify your answer by providing advantages and disadvantages. Rani earns advertising income by placing advertising boards in her shop window. The following details relate to her advertising income. On 1 April...
See it on the paper →Candidates were given the value of the opening and closing inventory of a trader and were required to prepare the inventory account. Despite similar questions being asked in the past, this proved very challenging for the majority of candidates and there were very few wholly correct responses. The opening inventory would appear as a debit balance brought down from the previous year and, at the year...
— Examiner report, October/November 2023, 7707/23 Q3(a) (Cambridge)
This question surprisingly was more challenging than expected. Each type of inventory required a valuation based upon its cost per unit + any carriage cost. If the selling price was less than the cost price then the lower value was selected as inventory is valued at the lower of cost and net realisable value. Many candidates were unaware of this accounting standard and incorrect answers often incl...
— Examiner report, May/June 2022, 7707/22 Q4(a)(i) (Cambridge)
Using information provided candidates were required to calculate the correct value of inventory. There were very few wholly correct answers. The inventory had been valued at $26 300 which includes goods costing $5200 which could only be sold for $5000 after repairs costing $600. The value of the inventory had to be reduced by $800. A common incorrect answer was $21 600.
— Examiner report, October/November 2020, 7707/23 Q4(a) (Cambridge)
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