No. 5(a): Preparation of manufacturing Account for Kaycee Garments for the year ended 31st December 2017: No. 5(b): Calculation of the cost of production per unit based on Kaycee Garments production of 40,000 uniforms for the year: Cost of production per unit = Total cost of production = 553,350 = $13.83/unit Number of units produced 40,000 I hope that you found this proposed solution helpful! If you did please share it! Also, feel free to ask any questions or to make your comments below. Good Luck!
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No. 4(a): Workings for preparation of the appropriation account of Benji and Nicka:
Calculation of interest on capital:
Calculation of interest on drawings:
Calculation of share of profit using ratio of 3:2: Remaining profits = (56,200 + 300 + 215) – (16,000 +14,000 + 5,000) = $21,715
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No. 2(a) (i): Formulae and comments on the gross profit margin and the operating expenses/sales revenue ratios:
Gross Profit Margin: The formula to compute gross profit margin is; Gross profit x 100 Sales The gross profit margin for the year ended 31st December 2017 was 24%. This means that for every $1 of sales revenue earned the business had $0.24 to help cover the expenses for that period. This is a 4% increase when compared to the gross profit margin of 2016 and thus a strength, or a positive thing for the business. Operating Expenses/Sales Revenue: The formula to compute operating expenses/sales revenue is; Operating Expenses x 100 Sales Revenue The operating expenses/sales revenue for the year ended 31st December 2017 was 11%. This means that for every $1 of sales revenue earned the business paid $0.11 towards expenses for that period. This is a 2% increase opposed to the $0.09 they paid in 2016. This may be perceived as a negative thing as it means that the expenses of the business increased during 2017. Please note however, that there may be a number of reasons for this such as increased sales resulting in increased expenses, and therefore may not necessarily be a sign of weakness. No. 1(a): Preparation of Cash Book for the month of 31st March 2018. Workings: 1. 26th March 2018 the total of the cheque to Jeff’s AirCon: Cheque will equal $7,500 less a 5% discount. The discount equals 5% x $7500 = $375. Therefore the cheque total equals = $7,500  $375 = $7,125. 2. 30th March 2018 the total of the cheque received from Layby Stores: Invoice total on the 13th March sent to Layby Stores equals $2,250 less 20% trade discount. The discount equals 20% x $2,250 = $450. Therefore the invoice total equals = $1,800. 19th March 2018 the total of the credit note sent to Layby Stores equals $200 less 20% trade discount. The discount equals 20% x $200 = $40. Therefore the credit note total equals $200  $40 = $160. This means that the total on Layby Store’s account on the 30th March 2018 = $1800  $160 = $1640. Layby Stores was given a cash discount of $150 therefore the cheque received from Layby will equal $1640  $150 = $1,490. Now that the workings has been completed the Cash Book for the month ended 31st March, 2018 can be prepared.

AuthorThe author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor. Archives
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