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  • Exer 6.13 Sol (2023)

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    Clarisha fritz
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    This document provides an incomplete financial statement for Candy Cake Shop for the year ending 31 December 2022 and the calculations to estimate the shop's profit for the year. The statement of financial position shows assets of R221,500 and capital and liabilities of the same amount, with capital as the balancing figure of R187,500. To estimate profit, capital at year end is compared to estimated opening capital, investments by the owner are subtracted, and drawings are added, resulting in an estimated profit for the year of R114,500.

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    EXER 6.13 SOL (2023)

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    This document provides an incomplete financial statement for Candy Cake Shop for the year ending 31 December 2022 and the calculations to estimate the shop's profit for the year. The statement of financial position shows assets of R221,500 and capital and liabilities of the same amount, with capital as the balancing figure of R187,500. To estimate profit, capital at year end is compared to estimated opening capital, investments by the owner are subtracted, and drawings are added, resulting in an estimated profit for the year of R114,500.

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    © All Rights Reserved
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    6 views2 pages

    Exer 6.13 Sol (2023)

    Uploaded by

    Clarisha fritz
    This document provides an incomplete financial statement for Candy Cake Shop for the year ending 31 December 2022 and the calculations to estimate the shop's profit for the year. The statement of financial position shows assets of R221,500 and capital and liabilities of the same amount, with capital as the balancing figure of R187,500. To estimate profit, capital at year end is compared to estimated opening capital, investments by the owner are subtracted, and drawings are added, resulting in an estimated profit for the year of R114,500.

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    © All Rights Reserved
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    of 2

    NELSON MANDELA UNIVERSITY – ACCOUNTING 1

    TOPIC: Incomplete records – Estimation of profit EXERCISE 6.13

    (a)
    CANDY CAKE SHOP
    STATEMENT OF FINANCIAL POSITION
    AT 31 DECEMBER 2022

    ASSETS

    NON-CURRENT ASSETS
    Property, Plant and Equipment (50 000 + (60 000 – 32 000) – 4 000) 74 000

    CURRENT ASSETS 147 500


    Inventory (given) 75 000
    Accounts receivable (given) 63 500
    Prepaid insurance (given) 2 500
    Cash at bank (given) 6 500

    R221 500

    CAPITAL AND LIABILITIES

    CAPITAL
    Capital – C. Beaton (Balancing figure) 187 500

    CURRENT LIABILITIES
    Accounts payable (given) 34 000

    R221 500

    (b) Estimated profit R

    Capital at 31 December 2022 (derived in 31 Dec 2022 SOFP) 187 500


    Less: Capital at 1 January 2022 (derived from beginning asset/liability figures) 81 400
    (See workings)
    Increase in capital 106 100
    Less: Investments by owner (50 000 + 10 000) 60 000
    46 100
    Add: Drawings for the year ((1 200 x 52 weeks) + 6 000) 68 400
    Estimated profit for the year R114 500

    Workings: R
    Assets
    Shop fittings 50 000
    Inventory 68 000
    Accounts receivable 52 000
    Prepaid insurance 2 400
    172 400
    Liabilities
    Bank overdraft (56 000)
    Accounts payable (27 500 + 5 000 + 2 500) (35 000)
    Capital at 1 January 2022 81 400
    RV102/RGV102 Page 1 of 1

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