Calculating your profit percentage

I am busy tutoring some students in accounting and yesterday we struggled to calculate the profit percentage. Usually they will either give you the selling price and the profit percentage so you can calculate the cost price. Or they will give you the cost price and the profit percentage so you can calculate the selling price.

But now they give you:

The total cost price of all the sales               R510 000

The total selling price of all the goods            R641 000

The total debtors allowance                         R29 000

And now you have to calculate the profit percentage...

Here is steps with formulas I worked out for this equation that will help:

Step 1: Selling Price - Cost Price - Debtors allowance = profit

Step 2:     profit        x    100

            Cost price            1

         

     =     profit percentage

Example:

Step 1: R641 000 - R510 000 - R29 000 = R102 000

Step 2: R102 000  x  100

           R510 000        1

       =    20%

One-on-one

During teaching practice I helped grade 10 Accounting pupils after school, as an extra accounting class. In this class I reflected on the past exam and tried to determine what they don't know or what they are struggling with.

So this one boy struggled with the OE = A + L (Owners Equity = Assets + Liabilities)... I sat with him one afternoon, one-on-one. We took a exercise and we went through the exercise transaction per transaction. I gave him T-accounts to logically see the transaction happen in front of him. After about the 5th transaction and nothing seems to be wrong with him, I asked him why he came for this extra class if he keeps getting everything right? He told me he never used T-accounts in the exams. So then I asked him if he had spare time left in the exams and he said yes. So then I gave him the tip to use T-accounts next time when he have to complete the OE = A + L.

If it still doesn't work, we will try a different technique.

So what is this whole story about?
I just want to point out that sometimes you just have to give one hour (or even less) of your time to someone and maybe you can make a big difference, just because of the one-on-one dealing with a problem "technique".

Happy calculating :)

www.double-entry-bookkeeping.com

Teaching students to complete an Asset register

Students are aware of the different types of assets: Equipment, vehicles, land and buildings, but does students know how to sell these assets? Do they know how to fill in each and every detail on a asset register?

Let's teach them how! This is the most perfect opportunity to combine real life with accounting. Helping them deal with accounting in the world outside the classroom.

Here is an example:

 So, what to fill in where? and when?

Column/row name	What to fill in?
General ledger account	If it’s a vehicle that you purchased you fill in vehicle, or equipment you fill in equipment, or land and buildings you fill in land and buildings, so that you know to which general ledger account you’ve posted this vehicle to.
Name/registration number	Fill in the vehicle, equipment or land and buildings name or registration number
Date purchased	The date that you purchased the vehicle, equipment or land and buildings
Bought from	The person, dealer, business, real estate agent, shop, etc. you bought the vehicle, equipment or land and buildings from
Cost price	The price that the vehicle, equipment or land and buildings cost when you bought it
Method and percentage of depreciation	Fill in the method you are using and the percentage you are using for depreciation. N/A for land and buildings
Information regarding asset disposal
Date disposed	Fill in the day, month and year when you sold the asset
To Whom	Here you fill in who bought the asset from you
Disposal price	This is a price you will have to calculate as follow: Cost price – depreciation up to date = Disposal price
Profit/loss with disposal	Here you wil have to make a calculation. The calculation is as follow: Amount received from buyer – disposal price = profit/loss If it is a negative amount it is a loss If it is a positive amount it is a profit
Information regarding depreciation
Date	The date on which you calculated the depreciation
Current depreciation	The Depreciation you calculated for that specific year of trading
Accumulated depreciation	This is also a calculation. It is the depreciation of the years before (if there is any) plus the current depreciation of the year

I really hope that this explanation will help you as much as it helped me and my students. 

Every student has the right to learn and even if there is students out there that doesn't have accounting but has the strange urge to learn something new and broaden their knowledge, you can contact me at any time. 

Happy calculating :)

Introduction to dealing with accounting

Hallo there

I am A.v.G.
I am currently a third year student, training to become a teacher. Especially in the business direction. Therefore I have decided to start a blog that help other teachers as well as students or learners with accounting. (I also started this blog because of an English assignment.) 

This blog aims to help teachers, students and learners, with explanations in different areas of accounting, but also helping with pictures or posters.

I really hope that you will enjoy my blog as much as I am going to, and if you have any suggestions, questions or ideas, feel free to e-mail me: annicavg@gmail.com