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:
- average stock;
- working capital;
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
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