Commerce WASSCE (PC), 2018

Question 8

 

  • Senfour Bakery Ltd. Presented the following account for the year ended 31st December, 2012.

                                                                           D
    Capital                                                                   90,000
    Stock 1/1/2012                                             55,000
    Debtors                                                        40,000
    Sales                                                          210,000
    Purchases                                                    150,000
    Stock 31/12/2012                                          70,000
    Creditors                                                      70,000
    Cash                                                            12,000

    From the above information, calculate:

    1.      average stock;
    2.      working capital;
              cost of goods sold. 

                                                                                                                                                   

     

     

     

    Observation

    The question was well attempted by most candidates. However some candidate lost marks because they did not state the formulas before calculating.

    The expected responses to the question include:

             (a)      Average stock         =       Opening stock + Closing stock      
    2
    =     D55,000 + D70,000    
    2

    =       D125,000.00     
    2
    =       D62,500.00

    (b)      Working Capital      =       Current Assets less Current Liabilities
    Current Assets:
    Stock                                                  70,000.00  
    Debtors                                               40,000.00  
    Cash                                                   12,000.00   
    122,000.00 
    Less: current liabilities (creditors)         70,000.00   
    D52,000.00 

             (c)  Cost of Goods sold: Opening stock + purchases – closing stock
    D
    Opening Stock                    55,000.00
    Add: Purchases                  150,000.00
    205,000.00
    Less: closing stock               70,000.00
    Cost of goods sold          D135,000.00

    ALTERNATIVE TO 8c:
             Senfour Bakery Ltd. Statement of Income for the year ended 31st Dec. 2012
             Dr.                                                                                            Cr.    
    D                                              D
    Opening stock          55,000.00            Sales            210,000.00
    Add: Purchases       150,000.00  
    205,000.00           
    Less closing stock      70,000.00  
    135,000.00  
    Net profit                 75,000.00  

                               D 210, 000.00                                     D 210, 000.00                                                                                                         

                                                    Le                                                                                Le       
    Capital                                     58,750             Fixed Asset    
    Plant and Machinery                           72,000
    Motor Van                                          31,000
    Long term Liabilities                                       Current Assets
    Loan                                        50,000             Stock                           12,000
    Current Liabilities                                           Debtors                       30,000
    Trade Creditors                       43,000             Cash                             6,750             48,750
    151,750                                                                       151,750                                                                                                                                                                                                                                                                        

          

                Teeson’s Enterpricses Capital
    Statement of Affair as at 31st Oct. 2010 =

                Assets                                    151,750 
    Liabilities                                93,000 
    Capital                               Le  58,750