Good day junior tickies, I'm Mrs Brimacombe. We're going to look now at activity 5. The following information was extracted from the counting records of Thule traders. Thule traders trade in buying and selling house appliances.
The business uses a markup percentage of 70% on cost price. It's always important to read the information which is given, especially make a note if the markup percentage is given to you. Because at some stage you are either going to have to calculate the selling price or you're going to have to calculate the cost.
So make a note of that. What is required from the different journals for October? Fill in the missing figures. Denote it A to F. So they provided you with a summary of all the journals.
And take note that some of the figures are missing and this is what we need to solve. Question number two. From the different journals.
for October 2024, we are required to do the following general ledger accounts. So they haven't asked you to do all of it, only some of it, which is drawings, trading stock, creditors control and stationery. And that's why you would see it's an extract with the balances and totals on the 1st of October, only from those accounts which is required for us to complete in question number two.
Always make sure before you start with this now, solving A up to number F, that you read the additional information. Okay, so this is very important. So starting with question number one, solving number A.
You should know that when we've done the cash receipts journal, you have learned that from the cash receipts journal, bank and cost of sales will always be debited. The rest is going to be credited. And this is very important to understand. Because in solving bank, you need to exclude cost of sales. Cost of sales is a non-cash item.
Which means cost of sales is the cost of the goods, which is our trading stock, which we've sold. And that's why when you see the word cost of sales, you should know that trading stock is involved. So to solve number...
we are going to add sales plus the debtors control plus sundry accounts and that equals the total for bank. To calculate now the cost of sales. To calculate cost of sales you need the selling price which is under sales times 100 divided by 100 plus the percentage marker. But now we need to read the additional information.
Customers were granted 10% discount on goods sold for cash and that information is very important because when you calculate the cost of sales it is always calculated on the original selling price. So this is after 10% discount has been given. So we need to step number one find out but what was the original selling price?
price. So if 10% discount was given, it means that 100 minus 10 equals 90% of that amount was received by customers. So to find now the full original, the 100%, we have to take 68,850 times 100 divided by 90. And then we can use the original selling price and calculate the cost to take times 100 divided by 170. So please remember that when we calculate the cost of sales and trade discount was given to customers, it's always calculated on the original selling price.
To find out what is number C, We need to go on the principle of that which you've learned from the cash payment journal. Bank will always be credited. Money will go out of our bank account.
It will be credited. The rest is going to be debited. So number C becomes basically my missing figure by taking bank minus creditors control minus trading stock. Minus consumer bills, minus sundry accounts. And that equals my total for my wages.
To solve number D, sales, the cost is given to you. So to find out the selling price, it means we need to use the markup percentage. A reminder, the selling price will go under sales and debtors control.
The cost, trading stock and cost of sales. So we need to take the cost times 100 plus the percentage markup divided by 100. So 100 plus 70 totals 170. Now to the creditor's journal. So with the creditor's journal, we first need to solve number E.
And why is that? We cannot calculate F by adding trading stock equipment, consumables and sundry accounts because equipment is still missing. That's why we need to solve number E, equipment, first. So now we need to go to the additional information and what does it tell us? Equipment purchased for cash amounted to $19,600, which accounts for 40% of the total equipment purchases made during October.
So this is a little bit more challenging. So the first thing which is important to understand, it was purchased for cash. and it consisted or amounted to 19,600.
So there's different ways to approach this now. If 40% is on cash, it means that 60% is on credit. So to find out, because that's what we want to find out, what was the credit purchases of equipment, we're going to say times 60 divided by 40. and that equals 29,400.
If you have set 19,600 times 100 divided by 40, that will also be correct, but then you need to remember I still need to times that by 60% because 60% of the total purchases is on credit and only 40% is cash. So this is just a little bit more challenging way. of finding out but what my equipment is equal to. Right, and now we can solve number F by adding all of that up together.
Because from the creditor's journal, creditor's control will always be credited. Our debt will increase on the credit side. The rest is going to be debited. So make sure that you understand these basics, studying the journals.
Know what is the purpose of each journal and this is what we focused on now. In grade 9 we started with the trading business in a cash receipts journal, cash payment journal, then we went on to the debtors journal and then the creditors journal. Posting now to the general ledger.
Step number one, write the balances brought down which means that If you look at drawings, drawings is an owner's equity account which will decrease on the debit side and increase on the credit side. But the plus is on the debit side or you can say D for debit. It will always, it increases on the debit side but it has a negative effect on my owner's equity. Trading stock is regarded as a current asset. Creditors control a current library.
availability, consumables and expense. To make it now a little bit easier for yourself, where the plus is, is where the balances brought down will appear. And this will be on the first day of the month. And remember now, we are busy with which month? We are busy with October 2024. Make sure that you write these in the correct columns.
You cannot have one and then October 2024. You have to have first the month and the year and then on the day. Now we can post from the journals. So the first one that we need to look at is drawings.
But now take note, there isn't a money column open for drawings. This means that we need to look at the additional information. So it says at point number one, the following transactions forms part of Sundry accounts.
Received an... invoice 457 on 18 October from General Motors 6200 subject to a 5% cash discount for repairs done to the owners personal vehicle. So this is drawings.
Anything that the owner takes for personal use is shown as drawings. But that 6,200 was subject to a 5% discount, which means that the amount that we are going to pay after the discount. So you've got two ways of calculating it.
You can take 6,200 times 95%, or you can say 6,200 times 5%, but then you still need to subtract it. So there's the long way and there's a short way of getting to exactly the same answer. So anything that the owner takes for personal use is shown as drawings and it said received an invoice.
That's why it is from the creditors journal, creditors control and the amount $5,819. Then it says made an online payment. to Mweb on the 25th of October for $1716. $1300 for this was for the business Wi-Fi account and the remainder for the owners. Again, anything that the owner takes for personal use is shown as drawings.
Now it says made an online payment and this is what is important to also take note of. From sundry accounts We have to take it on the day that the transaction took place. And that's what they provided you with the date.
So this happened now on the 25th. But how much is for the owner's personal Wi-Fi? That will be $1,760 minus $1,300.
From the CPJ, my details is bank and the amount $416. Next we need to look at trading stock posting from the journals to the trading stock account So this account is always important to understand this account will appear in all your journals And why do I say that the word trading stock is not written in cash receipts journal or in the debtors journal But you should know when you see the word cost of sales. It means that Trading stock is involved So from the cash receipts journal our trading stock is going to decrease with 45,000 and the cost of those goods which we sold is going to be debited cost of sales.
That's why the contra account is cost of sales. From the cash payment journal it means that our trading stock is going to increase because we bought and we paid for it cash. That's why we're going to say from the cash payment journal, our details is bank and the total is 19,818.
From the debtors journal, it means that trading stock was sold. So our trading stock is going to decrease our details, which is our control account, is cost of sales from the debtors journal 19,700. And then if you go and have a look in the creditors journal, we bought trading stock on credit.
So we bought the items, but we're only going to pay for it later on. It means that our trading stock is going to increase because we bought on credit from the creditors journal. Our details is creditors control and amount $38,400. Then they've asked you to post.
to the creditors control account. So creditors control account from the cash payment journal. So what's the purpose of the cash payment journal? Payments made.
So we've made payments to our creditors which means we owe them less money. Our debt will decrease and then secondly from the cash payment journal bank is always credited the rest is debited. If you have a look at creditors journal It means that we bought on credit. We owe more money.
Our debt will increase. So from the creditors journal, creditors control is always going to be credited. And our details is sundry accounts.
From the cash payment journal, our details is bank and amount $52,600. Cal... consumable stores that's our next account in the nominal account section consumable stores is an expense which will increase on the debit and the credit side so if you take note consumables is from the cash payment journal there's a money column And in the creditors journal, there's a money column for consumables. So it doesn't matter which one you post first, because both, when we're posting from a money column, it's on the last day of the month, which is now the 31st of October. So from the cash payment journal, if we bought consumables, our expense will increase.
My details is banked with $2,615. From the creditors journal, our expense will increase with $3,280. My details, creditors control. Now that we've done posting everything from the journals, we've done step number one.
We've written the opening balances and the total brought forward. Step number two, we've posted from the journals. The last step, we need to close off. the balance sheet and the nominal account section.
So if I look at drawings, there's nothing on the credit side. So I'm just going to draw a line and I'm going to total it. But trading stock, there's entries on the debit and the credit side. So it's a little bit more challenging.
So we start by adding up the debit side. The debit side must be equal to the credit side. And now We take the credit side minus minus equals the balance carried down.
Balance carried down means balance brought down on the 1st of November. A common mistake, learners write November the 1st next to balance carried down. Please don't make that mistake. We are writing this at the end of the month.
What is our balance carried down? The closing balance at the end of last month is the opening balance my new month. Creditor's control is now the opposite. We start with, and it's also clear, by adding up the credit side.
The credit side must be equal to the debit side and the difference is my balance carried down means balance brought down on the 1st of November 2024. With consumables, there was nothing on the credit side, so we are just going to total that. Thank you very much. I want to leave you with this quote.
The beautiful thing about learning is nobody can take it away from you. I want to also encourage you. Make sure at any stage, if you are unsure, go through the theory booklet on... Everything that we have done. In grade 8, the focus was on a service business, but there we've looked at how do we complete a journal, source documents, the general ledger, the accounting equation, the trial balance.
And in grade 9, the focus shift from a service business to a trading business where we're buying from and we are selling to. And then we've added now, but what if we buy on credit? from our suppliers? What if we sell goods on credit? And that's what we've just added to everything that you've done.
We've added new transactions. So make sure that you go through the theory booklets. You cannot apply if you don't know the theory.
And then accounting is so much easier. Have a wonderful day.