XMS 2022 4E5N PRELIMS P2 ANS

1(a) Eat Smarter Statement of financial performance for the year ended 31 July 2021 $ $ Sales revenue (120,800 + 1,200) 122,000 [1] Less: Sales returns 22,320 [0.5] Net sales revenue 99,680 Less: Cost of sales 46,600 [0.5] Gross profit 53,080 Other income Commission income 26,000 [0.5] Less: Expenses Interest expense (4% x $15,000) 600 [1] Selling and advertising expense (8,860 – 550) 8,310 [1] Discount allowed 809 [0.5] Rental expense 13,000 [0.5] Wages and salaries 30,800 [0.5] Utilities expense (12,520 – 210) 12,310 [1] Impairment loss on trade receivables (2230- (-660) 2,890 [1] Depreciation of motor vehicles (15% x (60,000 – 12,000)) 7,200 [1] Depreciation of equipment (20% x (14,200 + 550) 2,950 [1] 78,869 Profit for the year 211 -1m for wrong format [10]

2 (b) Eat Smarter Statement of financial position as at 31 July 2021 Assets $ $ $ Non-current assets Cost Accumulated depreciation Net Book value Motor vehicles 60,000 [0.5] 19,200 [0.5] 40,800 Equipment 14,750 [0.5] 5,050 [0.5] 9,700 50,500 [0.5] Current assets Trade receivables (44,400 + 1,200 – 1,000) 44,600 [1] Less: Allowance for impairment of trade receivables (2,230) [0.5] 42,370 Inventory 32,000 [1] Total current assets 74,370 Total assets 124,870 Equity and liabilities Owner’s Equity Capital (80,819 + 211 - 210) 80,820 [1] OF Current liabilities Trade payables 28,000 [1] Bank overdraft 950 [1] Current portion of long-term borrowing 15,000 [1] Interest expense payable (600-500) 100 [1] Total current liabilities 44,050 Total equity and liabilities 124,870 -1m for wrong/improper format [Total: 20] [10]

3 2(a) (b) (c) (d) (i) Non-current assets are resources a business owns or controls that are expected to provide future benefits which last beyond one financial year. [1] (ii) Depreciation is a reduction in the value of non-current assets over time. [1] Jingle Wellness purchased a machine costing $12,000 from Packwell on credit. [1] Depreciation = [$8,574 / ($51,280 – 8,410) [1] x 100] = 20% [1] Journal 2020 Dr ($) Cr ($) Sep 30 Sale of non-current asset 4,040 [1] Income summary [13,000 – (14,000 – 5,040)] 4,040 [1] The business made a gain of $4,040 from the sale of machinery. [1] OF (e) Purpose of non-current assets [1] Features of non-current assets [1] Customer reviews of the non-current assets [1] Warranty of non-current assets [1] Accept any 2 points above. [Total: 10]

4 3(a) (b) The revenue recogn