4.2 Recording cash transactions of service and commercial enterprises  (Page 2/4)

• Cash sales of goods

July 17 R1 600 (cost price R1 280)

July 24 R3 900 (cost price R3 120)

July 31 R5 400 (cost price R4 320) In the case of sales at a commercial enterprise, the cost price sometimes needs to be determined. Every business works on a fixed profit percentage. This means that the profit percentage is added to the cost price to determine the selling price. The cost price of sales is regarded as an expenditure and therefore reduces the ownership interest. If the selling price and the % profit on the cost price are known, the following formula is used to calculate the cost price:

sp = cp + profit

(a) If the item is sold at R750 and a profit percentage of 25% is applied, the cost price will be calculated as follows:

sp = cp + profit

750 = cp + 25% × cp

cp + $\frac{\text{25}}{\text{100}}$ cp = 750

1,25 cp = 750

cp = 600

(b) At a profit of 33⅓% and a selling price of R400 the cost price will be calculated as follows:

sp = cp + profit

cp + 33,3% cp = 400

1,333 cp = 400

cp = 300

OPDRAG 3:

• Complete the CRJ and calculate the cost price for Lubbe Dealers using the information below. (Use CRJ 3.1.3 on the next page.)

• Goods are sold at cost price plus 33⅓%. Close the journals by calculating the column totals.

• Transactions for May 2003

1 The owner, H. Lubbe, deposits R80 000 in the current bank account as his capital contribution

13 Cash sales of goods R 760

24 Cash sales of goods R 960

28 Cash sales of goods R1 240

CASH RECEIPTS JOURNAL OF MZONDI PLUMBERS – SEPTEMBER 2003 CRJ 3.1.1

CASH PAYMENTS JOURNAL OF MZONDI PLUMBERS – SEPTEMBER 2003 CPJ 3.1.1

CASH RECEIPTS JOURNAL OF LEVUBU DEALERS - JULY 2003 CRJ 3.1.2

CASH PAYMENTS JOURNAL OF LEVUBU DEALERS - JULY 2003 CPJ 3.1.2

ASSIGNMENT 4:

• Complete the CRJ and the CPJ of the combined commercial and service enterprise, Donovan Motors . (Use CRJ 3.1.4 and CPJ 3.1.3)

• Mr D. Daniels opened a business called Donovan Motors on 1 December 2003. He deals in fuel, oil and tyres. He provides services in the form of repairs and panel-beating of vehicles.

• The business maintains a profit margin of 25% on the cost price.

• Cash transactions concluded in December 2003:

1 D. Daniels deposits his capital contribution of R80 000 in the current bank account opened in the name of the business