FAC1502/101/3/2015

Tutorial letter 101/3/2015 Financial accounting concepts, principles and procedures

FAC1502 Semesters 1 & 2 Department of Financial Accounting

IMPORTANT INFORMATION:

This tutorial letter contains important information about your module.

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CONTENTS

Page

1 INTRODUCTION .......................................................................................................................... 4

2. PURPOSE OF AND OUTCOMES FOR THE MODULE................................................................ 5

2.1 Purpose ........................................................................................................................................ 5

2.2 Outcomes ..................................................................................................................................... 5

3 LECTURERS AND CONTACT DETAILS ..................................................................................... 6

3.1 Lecturers ....................................................................................................................................... 6

3.2 Department ................................................................................................................................... 7

3.2.1 E-mail ........................................................................................................................................... 7

3.2.2 Student information hub ................................................................................................................ 7

3.2.3 Postal address .............................................................................................................................. 7

3.3 Unisa ............................................................................................................................................ 7

4 RESOURCES FOR FAC1502 ...................................................................................................... 7

4.1 Prescribed books .......................................................................................................................... 7

4.2 Recommended books ................................................................................................................... 8

4.3 Electronic reserves (e-reserves) ................................................................................................... 8

5 STUDENT SUPPORT SERVICES FOR FAC1502 ....................................................................... 8

6 STUDY PLAN FOR FAC1502 ...................................................................................................... 8

7 PRACTICAL WORK AND WORK-INTEGRATED LEARNING FOR FAC1502 ............................ 8

8 UNISA TUTORING SUPPORT SERVICE .................................................................................... 8

8.1 What is the Unisa online tuition programme? ................................................................................ 8

8.2 Where will I find my online tutoring group? .................................................................................... 8

8.3 Is it mandatory to participate in e-tutor groups? ............................................................................ 8

8.4 How do I post a discussion item on my group site? ....................................................................... 9

8.4.1 To start a new topic for discussion: ............................................................................................... 9

8.4.2 To reply to another student’s comments ....................................................................................... 9

8.5 Face-to-face tutors ........................................................................................................................ 9

9 ASSESSMENT ............................................................................................................................. 9

9.1 Assessment plan .......................................................................................................................... 9

9.2 General assignment numbers ..................................................................................................... 10

9.2.1 Unique assignment numbers ...................................................................................................... 10

9.2.2 Due dates for assignments ......................................................................................................... 10

9.3 Submission of assignments ........................................................................................................ 10

9.4 Assignments ............................................................................................................................... 11

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10 OTHER ASSESSMENT METHODS ........................................................................................... 11

11 EXAMINATION ........................................................................................................................... 11

11.1 Examination admission ............................................................................................................... 11

11.2 Examination period ..................................................................................................................... 11

11.3 Examination paper ...................................................................................................................... 11

11.4 Previous examination papers ...................................................................................................... 12

12 FREQUENTLY ASKED QUESTIONS ........................................................................................ 12

13 CONCLUSION ............................................................................................................................ 15

14 ANNEXURE A: ASSUMED KNOWLEDGE ................................................................................ 16

15 ANNEXURE B: PROPOSED STUDY PROGRAMME FOR 2015 ............................................... 22

16 ANNEXURE C: ASSIGNMENT 01 (SEMESTER 01) .................................................................. 23

17 ANNEXURE D: ASSIGNMENT 02 (SEMESTER 01) ................................................................. 35

18 ANNEXURE E: ASSIGNMENT 01 (SEMESTER 2) .................................................................... 48

19 ANNEXURE F: ASSIGNMENT 02 (SEMESTER 02) .................................................................. 58

20 ANNEXURE G: SELF-ASSESSMENT ASSIGNMENT ............................................................... 69

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1 INTRODUCTION Dear Student It is a pleasure to welcome you as a student to FAC1502. We hope that you will find your studies particularly stimulating this semester and that you will achieve success. The semester that you register for will be indicated on your registration documentation. Please ensure that you are registered for the correct semester, as you are obliged to write the examination for that semester. The examination for the first semester will be during May/June, and the examination for the second semester will be during October/November. Should you be faced with specific subject content problems in your studies, please do not hesitate to consult us by letter, e-mail, telephone or personally (by appointment). In this tutorial letter, we would like to draw your attention to a number of very important matters and we request you pay careful attention to them. We shall do our best to make your study of this module successful. You will be well on your way to success if you start studying early in the semester and resolve to do the assignments properly. You will receive a number of tutorial letters during the semester. A tutorial letter is our way of communicating with you about teaching, learning and assessment. Tutorial letter 101 contains important information about the scheme of work, resources and assignments for this module. We urge you to read it carefully and to keep it at hand when working through the study material, doing the assignments, preparing for the examination and addressing questions to your lecturers. In Tutorial letter 101, you will find the assignments and assessment criteria as well as instructions for the preparation and submission of the assignments. This tutorial letter also provides all the information you need with regard to the prescribed study material and other resources and how to obtain these. Please study this information carefully and make sure that you obtain the prescribed material as soon as possible. We also include certain general and administrative information about this module. Please study this section of the tutorial letter carefully. Right from the start we would like to point out that you must read all the tutorial letters you receive during the semester immediately and carefully, as they always contain important and, sometimes, urgent information. Some of the study material may not have been available when you registered and will be posted to you as soon as possible. However, it is also available on myUnisa. It is important to use myUnisa and the internet regularly. You must be registered on myUnisa to be able to submit assignments online, gain access to the library functions and various learning resources and download study material. You can also “chat” to your lecturers and fellow students about your studies and the challenges you encounter, and participate in online discussion forums. Keep in mind that myUnisa provides you with additional opportunities to take part in activities and discussions of relevance to your module topics, assignments, marks and examinations. We hope that you will enjoy this module and wish you all the best.

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2. PURPOSE OF AND OUTCOMES FOR THE MODULE

2.1 Purpose

The purpose of this module is to:

apply the basic principles of accounting

gather, process and record relevant information and compile basic statements of profit or loss and other comprehensive income, statements of changes in equity and statements of financial position

keep proper record of and be accountable for assets

keep proper record of and be accountable for liabilities

keep proper record for the different forms of entities and meaningful analyse their statements of financial position

prepare proper accounting records from incomplete records

2.2 Outcomes

Learning outcome 1

Explain what is meant by the nature of accounting theory and accounting principles, policy, practice and procedures.

Learning outcome 2

Describe what the primary purpose of accounting is, explain what the double entry system is and calculate the financial position of an entity and the elements of the basic accounting equation.

Learning outcome 3

Apply the concepts of income and expenditure to determine the gross profit and total comprehensive income (or loss) and the effect thereof on equity.

Learning outcome 4

Analyse and record transactions in the accounting records of an entity and prepare a statement of financial position using the basic accounting equation.

Learning outcome 5

Prepare all the journals (books of first entry), do postings to ledger accounts and prepare a trial balance.

Learning outcome 6

Adjust the accounting records of an entity at year-end.

Learning outcome 7

Complete the closing-off procedure, determine the profit or loss of an entity and prepare more advanced financial statements.

Learning outcome 8

Know how to treat transactions related to cash and cash equivalents, apart from cash receipts and payments.

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Learning outcome 9

Know how to treat all aspects of debtors in the accounting records of an entity.

Learning outcome 10

Understand the importance of inventory and how entries related to inventory are recorded in the accounting records of an entity.

Learning outcome 11

Record transactions related to property, plant and equipment.

Learning outcome 12

Record transactions related to other non-current assets such as investments.

Learning outcome 13

Know how to treat of current liabilities in the accounting records of an entity.

Learning outcome 14

Describe non-current liabilities, record the necessary entries in the accounting records and disclose them in the statement of financial position.

Learning outcome 15

Record all transactions related to a sole proprietor and prepare the financial statements.

Learning outcome 16

Record all transactions and prepare the financial statements related to organisations and societies not for gain.

Learning outcome 17

Convert to a double-entry system from incomplete records.

3 LECTURERS AND CONTACT DETAILS

3.1 Lecturers

The lecturers responsible for this module are listed below. Remember to have your student number at hand when you contact a lecturer. Lecturers are available for telephone enquiries from 8:00 to 16:00 on weekdays.

Telephone number: 012 429 4245

Please note: This number is linked to all the module lecturers‘ telephone numbers.

Lecturer Building and office numbers

Ms MS du Rand AJH v/d Walt 2-07 Mr DO Khumalo AJH v/d Walt 2-06 Mr M Engelbrecht AJH v/d Walt 2-06 Mr C Modise AJH v/d Walt 2-20 Ms A du Plessis AJH v/d Walt 2-11 Direct all queries about the content of this module, that are not of an administrative nature to the lecturers. Please have your study material at hand when you contact us.

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For personal visits, always make an appointment with a lecturer as they are not always readily available.

3.2 Department

3.2.1 E-mail

You can also communicate with your lecturers via e-mail.

Use the following e-mail address:

● FAC1502@unisa.ac.za

We will respond promptly to e-mails forwarded to this e-mail address, in most cases within one working day.

3.2.2 Student information hub

If you have any registration or administrative queries relating specifically to the College of Accounting Sciences (CAS), you can direct your query via the following e-mail address or telephone numbers:

CAS specific enquiry e-mail for the College is:

● CASenquiries-Undergraduate@unisa.ac.za.

CAS specific enquiry telephone number for the College is:

● 012 429 4211

3.2.3 Postal address

Send letters to:

The Module leader (FAC1502) Department of Financial Accounting School of Accountancy College of Accounting Sciences P O Box 392 UNISA 0003

When communicating with Unisa in writing, always mention your student number, telephone number, the module name and the module code at the top of the letter.

Please note: Do not enclose letters to lecturers with assignments.

3.3 Unisa

You will find general Unisa contact details in the my Studies @ Unisa brochure, which you received with your study package. Remember to mention your student number when contacting Unisa.

4 RESOURCES FOR FAC1502

4.1 Prescribed books

Your prescribed book for this module is:

Berry, PR, Doussy, F, Ngcobo, RN, Rehwinkel, A, Scheepers, DE & Scott, D. About financial acounting, volume 1, 5th edition, LexisNexis: Durban.

ISBN - Print: 978 0 409 05711 9 - E-Book 978 0 409 05712 6

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For a list of the official booksellers and their addresses, please refer to the my Studies @ Unisa brochure.

You can obtain your prescribed book from Unisa’s official booksellers. If you have difficulty in locating your book at these booksellers, please contact the Prescribed Books Section by telephone at 012 429 4152 or by e-mail at vospresc@unisa.ac.za.

4.2 Recommended books

There are no recommended books for this module.

4.3 Electronic reserves (e-reserves)

There are no e-reserves for this module.

5 STUDENT SUPPORT SERVICES FOR FAC1502

Important information appears in the my Studies @ Unisa brochure. 6 STUDY PLAN FOR FAC1502

See your my Studies @ Unisa brochure for general time management and planning skills. A study plan for FAC1502 is attached as Annexure B. 7 PRACTICAL WORK AND WORK-INTEGRATED LEARNING FOR FAC1502

There are no practicals for this module. 8 UNISA TUTORING SUPPORT SERVICE

8.1 What is the Unisa online tuition programme?

Unisa is an open distance learning institution and is providing online tutorial services as part of student support. Previously, tutorials have been mainly offered face-to-face at the various regional centers.

Online tutorials allow a smaller group of students to interact with an academic instructor (tutor) on myUnisa to facilitate the learning process. Due to the large student numbers at Unisa, it is not possible for a lecturer to attend personally to all enquiries from students or manage the online discussion forums. Online tutor groups offer personal attention and focused academic support from tutors.

8.2 Where will I find my online tutoring group?

Each group has its own separate site on myUnisa. These sites are numbered and you will receive your group number via email and SMS. Don’t be confused. You will now have access to two sites for those modules with online tutoring, namely the main module site and the group module site.

On the main module site, you will find the official study material files that you can download. You should also submit your assignments here. From time to time, the primary lecturer of the module may communicate with all the students through this site.

On the group module site, you can interact with your tutor and other group members. Here you can participate in discussions; post academic-related queries and receive specific tutor support.

8.3 Is it mandatory to participate in e-tutor groups?

Participation in online discussions is not mandatory, and therefore no marks will be awarded for participating. The e-tutor groups merely form part of the support structure designed to help you with and guide you through your studies. We encourage you to make use of this service to get assistance with any academic-related queries and to help you understand study material and study problems, acquire learning skills, etc.

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8.4 How do I post a discussion item on my group site?

You have two options for participating in online discussions: you can either reply to an existing discussion or start a new one.

Here are the step by step instructions for writing a comment and participating in an online discussion for the first time:

8.4.1 To start a new topic for discussion:

- On your group site on myUnisa, go to the discussions by clicking the “Discussions” link in the left menu. Once you have done this, you should see a list of the available forums.

- Click on the title of a forum to view the current discussion topics. If there are no previous topics, this page will be empty.

- Click on the “New topic” link in the top horizontal menu.

- You can now write your comment. Enter the details for “Subject” and “Message”. (An important tip: Don’t write your comment directly in the editor. First write it down somewhere else. Why? If you lose your internet connection, at least you won’t have lost everything!).

- Remember to click “Save”.

8.4.2 To reply to another student’s comments

- On your group site on myUnisa, go to the discussions by clicking the “Discussions” link in the left menu.

- Click on the title of a forum to view the ongoing discussion topics.

- Click on the title of the discussion topic you want to read or participate in.

- Once you’ve read the other students’ comments, you may want to reply to some of them. For each comment, there is a link entitled “Reply”. Click this link to open the online editor and write your reply.

- Remember to click “Save”.

8.5 Face-to-face tutors

Face-to-face tutors are tutors appointed to give class on Saturdays to students of Unisa. It is free, and you only need to register at one of the regional centers nearest to you to attend these classes. (Refer to pages 13 to 15 of this tutorial letter for a list of the centres.) Please contact these centres directly, because they are run independently from Unisa. Please do not phone the lecturers to find out about the classes, because we will not be able to assist you with any information concerning the activities of the regional centres.

9 ASSESSMENT

9.1 Assessment plan

Toe enable you to fully benefit from our formative tuition and assessment, the management of Unisa decided to introduce two compulsory assignments in all modules to be submitted by set due dates. We provide feedback for the two compulsory assignments in two separate tutorial letters – on for each compulsory assignment. There is also a self-assessment assignment which is a comprehensive exercise consisting of questions with solutions. The questions are representative of the type of questions which you can expect in the examination.

If you submit the first compulsory assignment by its due date, you will gain admission to the examination in the specific module. The marks obtained in the two compulsory assignments contribute equally towards your year mark, and your year mark contributes 20% towards the final mark. Your examination mark contributes 80% towards your final mark. Should you fail the examination with less than 40%, the year mark will not count. You require a final mark of 50% to pass a module.

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Please note:

Although students may work together when preparing assignments, each student must write and submit his or her own individual assignment. In other words, you must submit your own ideas in your own words, sometimes interspersing relevant short quotations that you reference properly. It is unacceptable for students to submit identical assignments on the basis that they worked together. That is copying (a form of plagiarism) and none of these assignments will be marked. Furthermore, Unisa may penalise you or subject you to disciplinary proceedings. Do not copy the assignment solutions of fellow students!

9.2 General assignment numbers

Assignments are numbered, starting from 01. We attach the assignments as annexures.

9.2.1 Unique assignment numbers

The unique assignment numbers allocated to the assignments are as follows:

Semester Assignment Unique number

First semester 01 577581

First semester 02 577644

Second semester 01 577665

Second semester 02 577691

9.2.2 Due dates for assignments

Semester Assignment Due date

First semester 01 6 March 2015

First semester 02 10 April 2015

Second semester 01 21 August 2015

Second semester 02 11 September 2015

9.3 Submission of assignments

You may submit assignments completed on mark-reading sheets either by post or electronically via the Unisa’s Mobile MCQ Application or myUnisa. Do not submit assignments by fax or e-mail.

For detailed information on assignments, please refer to the my Studies @ Unisa brochure.

To submit an assignment via myUnisa:

• Go to myUnisa.

• Log in with your student number and password.

• Select the module.

• Click on “Assignments” in the menu on the left-hand side of the screen.

• Click on the number of the assignment you wish to submit.

• Follow the instructions.

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9.4 Assignments

You will find the assignments in the following annexures:

Annexure C: Assignment 01 for FIRST SEMESTER

Annexure D: Assignment 02 for FIRST SEMESTER

Annexure E: Assignment 01 for SECOND SEMESTER

Annexure F: Assignment 02 for SECOND SEMESTER

10 OTHER ASSESSMENT METHODS

There are no other assessment methods for this module.

11 EXAMINATION

11.1 Examination admission

When you submit Assignment 01 by its due date, you will be admitted to the examination.

However, it will be to your advantage to hand in both compulsory assignments and complete the self-assessment assignment (which is a comprehensive exercise), as:

the assignments provide practice which is essential for your studies of financial accounting

the assignments contain valuable revision material and ensure that you work throughout the semester

the self-assessment assignment (the comprehensive exercise) and Tutorial letter 102 contain questions similar to those you can expect in the examination

Also refer to the my Studies @ Unisa brochure for general examination and examination preparation guidelines.

11.2 Examination period

This module is offered over a semester period of approximately fifteen weeks. Thus if you are registered for the first semester, you will write the examination during May/June 2015 and may have to write the supplementary examination during October/November 2015. If you are registered for the second semester, you will write the examination during October/November 2015 and may have to write the supplementary examination during May/June 2016.

About a month before the commencement of the examination, the Examination Section will provide you with information regarding the examination in general as well as examination venues, dates and times. You can also get the information on myUnisa if you do not receive it by post.

11.3 Examination paper

At the end of the semester (May/June for the first semester and October/November for the second semester) you will be required to write a two hour examination for module FAC1502. The paper will contain no multiple choice questions but will consist of long questions only.

You will be allowed to use a non-programmable pocket calculator. The official calculation policy of Unisa is given below for your information:

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Calculator policy

Canditates may only use silent, electronic, battery-driven calculators subject to the following conditions:

● Calculators must be cordless, and may not have print-out facilities or alpha keys. ● Any financial calculator will be allowed, as the following tables will not be provided:

▪ tables of present value factors for various discount rates for varying periods ▪ tables of future value factors for various interest rates for varying periods

● You may not use the calculator function on cell (mobile) phones or any electronic device (e.g. laptops or any smart phone) ● You may not share a calculator with another candidate in the examination room.

The examination script consists of a book with 12 pages. Every page has three columns on the right hand side (similar to cashbook paper). If you don’t want or cannot use the columns, please ignore them and draw your own columns or T-accounts. You may open the book and use the left hand page for the debit side and the right hand page for the credit side of an account (again ignoring the extra columns).

Start every question on a new (separate) page. Number each sub-question clearly.

When answering a question, always read the “REQUIRED” part before reading through all the information. This will enable you to know immediately what information is needed to answer the question. If you read through the question in its entirety without knowing what is required, you will have to reread all the information and waste precious time in this manner.

If your final mark is between 40% and 49%, you may write a supplementary examination, which will be written at the end of the follow supplementary examination will be written at the end of the following semester. Thus if you qualify for a supplementary examination during the May/June examination, you will write the FAC1502 second semester paper during October/November, and if you qualify for a supplementary examination during the October/November examination, you will write the FAC1502 paper during May/June of the following year. To pass this supplementary examination, you must obtain at least 50% in the examination. However, you may write only one supplementary examination for every module that you are registered for.

If you qualify for a supplementary examination, no further study material will be supplied to you during the following semester, and you must not submit any assignments for this module during the following semester.

Please consult the examination time-table well in advance in order to plan your final revision programme. Report any examination problems (e.g. clashes of dates) directly to the Examination Section. Please start studying early to avoid cramming at the last moment.

Ensure that you have received all the assignment solutions at least two weeks before the examination.

11.4 Previous examination papers

Some previous examination papers are available on myUnisa. Suggested solutions to previous examination papers will not be made available. 12 FREQUENTLY ASKED QUESTIONS

The my Studies @ Unisa brochure contains an A-Z guide of the most relevant study information.

“My assignment is late, will you please mark it?”

Answer: FAC1502 compulsory assignments are in a multiple choice questions format and are marked by a computer. The marking date is determined by the computer section. The lecturing staff has no influence on this marking process. If your assignment is thus late or not marked, it most probably did not reach the Assignment Section on time. Please direct all queries in this regard to the Assignment Section.

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My assignment mark is incorrect.

Answer: The marking of the compulsory assignments is an automated process and marking is done according to a preset marking scheme. Sometimes we only realize that a question of questions has/have been ambiguous after students completed the assignments. In this case the applicable question will not be marked, and students will not be penalised. You can e-mail assign@unisa.ac.za for any enquiries regarding your assignment marks.

I am overseas and cannot submit my first assignment on time.

Answer: If you do not submit your first assignment on time, you will not be allowed to write the forthcoming examination. You must e-mail the exams@unisa.ac.za timeously to make alternative arrangements.

I received my study material too late to submit my first assignment on time.

Answer: You will have to prove that you indeed received your study material late. Submit the proof with a motivated request to the examadmission@unisa.ac.za timeously.

I have already submitted my assignment and the word “resubmit” appears on the screen, must I resubmit my assignment?

Answer: The assignment must only be resubmitted if you want to change some of the answers.

How do I get tutor assistance?

Answer: You can obtain the telephone numbers and details from the learning centres below:

As telephone numbers may change please refer to My studies @ Unisa to udate the list. REGION: PHYSICAL ADDRESS CONTACT DETAILS: TUTORIAL SERVICES

NORTH-EASTERN POLOKWANE 23A Landros Mare Street Polokwane, 0742

(015) 290-3443 Also Giyani and Makhado

NELSPRUIT Standard Bank Centre: 1st Floor 31 Brown Street Nelspruit, 1201

(013) 755-2476

MIDDLEBURG Cnr Church & Bhimy Damane Str Town Square Building Ground Floor Middleburg, 1050

(013) 282-4115

GAUTENG THUTONG (Sunnyside) Cnr Walker & Joubert Streets Sunnyside, 0002

(012) 441-5792/5794/5796

JOHANNESBURG Tutorial Services Office 29 Rissik Street Bram-Fischer Building Johannesburg, 2001

(011) 630-4512/4504/4514

FLORIDA Tutorial Services Office Cnr Christiaan de Wet/Pioneer Ave. F-Block Room 5-20 Florida

(011) 471-2082 (011) 471-2298

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REGION: PHYSICAL ADDRESS CONTACT DETAILS: TUTORIAL SERVICES BENONI Unisa Ekurhuleni Regional Service Centre Cor. R51 & Brazil Streets, Daveyton

(011) 845-9306/00

VAAL Hangar Building 1st floor C/O Rhodes & Voortrekker streets Vereeniging, 1939

016 455 6300

KWA-ZULU NATAL DURBAN Tutorial Services Office Rooms 305/505/605 Durban Learning Centre 221 Dr Pixley kaSeme (West) Street Durban, 4001 Tutorial Services Office Room1B5, Ground floor 230 Stalwart Simelane(Stanger) Street Durban, 4001

(031) 335 8110/11/27/30/31 (031) 335 1749/50/51

RICHARDS BAY Tutorial Services Office Lot 100637 Block C, Via Verbana Veldenvlei Richards Bay, 3900

(035) 789 3501/8405

WILD COAST (MBIZANA) Tutorial Services Office c/o Wild Coast Sun Main Road Mzamba Beach, Bizana

(039) 305 6433

PIETERMARITZBURG Tutorial Services Office Reid Building (room 204/205/206) 1 LangalibaleleStr Pietermaritzburg, 3201

(033) 355-1734 (033) 355-1735

NEWCASTLE Tutorial Services Office Cnr Sutherland and Harding Str Newcastle, 2940

(034) 326 3105 (034) 312 4015

CAPE COASTAL PAROW Tutorial Services Office 15 Jean Simonis Street Parow, 7499

(021) 936-4190/4154

GEORGE Tutorial Services Office Joubert Plaza 1 100 Meade Street George, 6530

(044) 884 1300

MTHATHA Tutorial Services Office 32 Cnr Victoria & York Rd Economic Affairs Building Umtata, 5100

(047) 531-5002/3/6/7 also Lusikisiki and Mt Frere

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REGION: PHYSICAL ADDRESS CONTACT DETAILS: TUTORIAL SERVICES EAST LONDON Tutorial Services Office 10 St Lukes Road Southernwood East London, 5201

(043) 743-9246 also King Williams Town, Butterworth, Queenstown

PORT ELIZABETH Tutorial Services Office Corner of Greyville and Ring Roads Green Acres Port Elizabeth, 6045

(041) 363 1070

MIDLANDS MAFIKENG Tutorial Services Office 29 Main Street Opposite ABSA Bank, Mafikeng Mafikeng, 2745

(018) 381-6617/7318

RUSTENBURG Tutorial Services Office Forum Building (1st Floor) Cnr. OR Tambo & Steen Street Rustenburg, 0300

(014) 594 8800/8856

POTCHEFSTROOM Tutorial Services Office 20 Auret Street Potchefstroom, 2531

(018) 294 3362/3341

KIMBERLEY Tutorial Services Office NIHE Main Campus Cnr Chapel & Eureka Streets Kimberley, 8301

(053) 832 6391/7083

BLOEMFONTEIN Tutorial Services Office NRE House 161 Zastron Street Bloemfontein, 9301

(051) 411-0452

KROONSTAD Tutorial Services Office NFS Building 1st floor 36 Brand Street Kroonstad, 9499

(056) 213-2053/4

13 CONCLUSION

In spite of the care taken to ensure that all the study material is correct you may still find errors, omissions or other discrepancies. Should you come across such matters, or find that parts of the study material are not clearly expressed, kindly let us know to enable us to make the necessary corrections.

We trust that you will enjoy this module and wish you success with your studies.

Kind regards

Ms MS du Rand Ms A du Plessis Mr DO Khumalo Mr M Engelbrecht Mr C Modise

LECTURERS: FINANCIAL ACCOUNTING 1: MODULE FAC1502

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14 ANNEXURE A: ASSUMED KNOWLEDGE

We assume that you have the knowledge to do some elementary calculations. Some of these calculations are discussed in the following sections to help those students who wish to acquaint themselves with the relevant topics.

1 Basic calculations

Calculating a percentage of an amount or number

For example, what is. 13% of R3 900?

The 13% actually means 13 out of 100, or 13 ÷ 100; and the word "of" means "multiply by". Therefore, 13% of R3 900 can be read as:

13 ÷ 100 x R3 900 = R507,00

or, when using a pocket calculator: R3 900 x ,13 = R507,00.

(By using the factor of ",13", you have already divided the 13 by 100. All percentages can be used in this manner.)

Relating the price of a number of items to a single item

For example, if you paid R39,52 for 13 items, one item will cost R39,52 ÷ 13 = R3,04. You can then use this amount to calculate the price of other quantities of the same item, for example, 27 items will cost 27 x R3,04 = R82,08.

2 Interest

Interest is in effect the payment for the use of somebody else's money and is therefore the "price" of money, or a finance cost.

Interest can be receivable (e.g. interest on investments) or it can be payable (e.g. interest on loans, bonds or debentures). To calculate interest, we need the following:

• the amount involved,

• the interest rate at which it is invested/borrowed

• the period for which it is invested/borrowed

Whenever a period is involved, you can consider using a time-line to help you with the calculation. You can prepare a time-line as follows:

(a) Information

Amount invested (or borrowed): R12 000

Interest rate: 10,5%

Period: 1 May 20.1 to 31 December 20.1 = 8 months

1 May 20.1 31 December 20.1

Period: 8 months Interest rate: 10,5%

Total period = 8 months (or 2/3 of a year = 0,6667 years).

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(b) Information

Amount invested (or borrowed): R12 000

Interest rate: 10,5%

Period: 1 May 20.0 to 31 December 20.1 = 1 year and 8 months (or 20 months)

1 May 20.0 31 December 20.0 1 January 20.1 31 December 20.1

Period: 8 months Interest rate: 10,5%

Period: 12 months

(= 1 year) Interest rate: 10,5%

Total period = 20 months (or 1 and 2/3 of a year = 1,6667 years).

Examples

1. Period shorter than one year

Amount invested (or borrowed): R12 000

Interest rate: 10,5%

Period: 1 May 20.1 to 31 December 20.1 = 8 months

Calculating interest

[R12 000 x (10,5 ÷ 100) x (8 ÷ 12)] = R840,00

OR: [R12 000 x 0,105 x (8 ÷ 12)] = R840,00

OR: [R12 000 x 0,105 x (2 ÷ 3)] = R840,00

OR: [R12 000 x 0,105 x 0,6667] = R840,00

2. Period longer than one year

Amount invested (or borrowed): R12 000

Interest rate: 10,5%

Period: 1 May 20.0 to 31 December 20.1 = 1 year and 8 months (or 20 months)

Calculating interest

[R12 000 x (10,5 ÷ 100) x (20 ÷ 12)] = R2 100,00

OR: [R12 000 x 0,105 x (20 ÷ 12)] = R2 100,00

OR: [R12 000 x 0,105 x (5 ÷ 3)] = R2 100,00

OR: [R12 000 x 0,105 x 1,6667] = R2 100,00

18

3 Profits and settlement discounts

When we calculate profits and settlement discounts, there is no period involved; and we therefore do not need a time-line. In this case the amount and the percentage are the key factors.

Examples

3.1 Profits

3.1.1 Profit as a percentage of cost price

Cost price: R23 000

Profit as a percentage of cost price: 25%

Calculate: selling price

Calculation of selling price

{R23 000 + [R23 000 x (25 ÷ 100)]} = R23 000 + R5 750 = R28 750

OR:

[R23 000 + (R23 000 x 0,25)] = R23 000 + R5 750 = R28 750

OR:

R23 000 x 1,25 = R28 750

The rationale behind the last calculation is that if the cost price is R1,00, the profit will be R0,25 and the selling price will be R1,25.

Therefore, if the cost price is R23 000, the selling price will be R23 000 x 1,25.

3.1.2 Profit as a percentage of selling price

Selling price: R23 000

Profit as a percentage of selling price: 25%

Calculate: cost price

Calculation of cost price

{R23 000 – [R23 000 x (25 ÷ 100)]} = R23 000 - R5 750 = R17 250

OR:

[R23 000 - (R23 000 x 0,25)] = R23 000 - R5 750 = R17 250

OR:

R23 000 x 0,75 = R17 250

In this case, calculating the last amount is not as simple as in the previous case. One must reason as follows: the selling price of R23 000 includes a profit of 25%; therefore, if the selling price is R1,00 and the profit is R0,25, the cost price (which is less than the selling price) will be R0,75. Thus, to calculate the cost price:

If the selling price is R23 000, the cost price will be R23 000 x 0,75.

FAC1502/101

19

3.1.3 Selling price is given, but the percentage profit is on cost price

Selling price: R23 000

Profit as a percentage of cost price: 25%

Calculate: cost price

Calculation of cost price

{R23 000 – [R23 000 x (25 ÷ 125)]} = R23 000 - R4 600 = R18 400

OR:

[R23 000 - (R23 000 x 0,20)] = R23 000 - R4 600 = R18 400

OR:

R23 000 ÷ 1,25 = R18 400

The calculation of the last amount is reasoned as follows: The selling price of R23 000 includes a profit of 25% on cost price; therefore, if the selling price is R1,25, and the profit is R0,25, the cost price (which is less than the selling price) will be R1,00. Thus, to calculate the cost price:

If the selling price is R23 000, the cost price will be R23 000 ÷ 1,25.

To sum up:

Cost price

1,00

Profit

x

1,25

0,25

÷

1,25

Selling price

1,25

The cost price is given, and you have to calculate the selling price (which is more than the cost price) – thus, multiply the cost price by 1,25 (if the profit percentage is 25%).

The selling price is given, and you must calculate the cost price (which is less than the selling price) – thus, divide the selling price by 1,25 (if the profit percentage is 25%).

3.2 Discounts (settlement discount granted or received) 3.2.1 Cash or trading discount on sales

Selling price: R23 000

Discount on selling price: 5%

Calculate: net selling price

Calculation of net selling price

{R23 000 – [R23 000 x (5 ÷ 100)]} = R23 000 - R1 150 = R21 850

OR:

[R23 000 - (R23 000 x 0,05)] = R23 000 - R1 150 = R21 850

OR:

R23 000 x 0,95 = R21 850

The last calculation is reasoned as follows: The selling price of R23 000 must be reduced by 5%. Therefore, if the selling price is R1,00, the discount will be R0,05, and the net selling price (which is

20

less than the original selling price) will be R0,95. Therefore, if the selling price is R23 000, the net selling price will be R23 000 x 0,95.

3.2.2 Settlement discount on payment of accounts

Amount outstanding on account = R23 000

Settlement discount on payment made on or before a specified date = 5%

Calculate: net amount to be paid

Calculation of net amount to be paid:

{R23 000 – [R23 000 x (5 ÷ 100)]} = R23 000 - R1 150 = R21 850

OR:

[R23 000 - (R23 000 x 0,05)] = R23 000 - R1 150 = R21 850

OR:

R23 000 x 0,95 = R21 850

The last calculation is reasoned as follows: The amount of R23 000 must be reduced by 5%. Therefore, if the full account is R1,00, the settlement discount will be R0,05, and the net amount to be paid (which will be less than the original amount to be paid) will be R0,95. Therefore, if the amount of the account is R23 000, the net amount to be paid will be R23 000 x 0,95.

4 Ratios

4.1 Percentage as a ratio

A percentage can also be regarded as a ratio: a ratio to 100. This means that a ratio of 15% actually means 15 out of 100, or 15:100. If a student obtained 43 marks out of 60, his ratio will be 43 to 60 (indicated as 43:60), or

43 ÷ 60 x 100 = 71,7% (or 71,7 out of 100 or 71,7:100).

By dividing the values on both sides of the colon by 100, you get a ratio of 0,717:1 (refer to par 4.2 below).

Similarly, if the sales of an entity are R245 000, and the gross profit on these sales is R147 000, the gross profit percentage is:

R147 000 ÷ R245 000 x 100 = 60%. Without doing a complicated calculation, one can immediately say that the cost price is 40% (= 100% - 60%) of sales. This 40% can also be calculated as follows:

R245 000 - R147 000 = R98 000 ÷ R245 000 x 100 = 40%.

4.2 Straight forward ratios

This type of ratio is often found in the apportionment of profits between partners. The numbers in the ratio are added and the total is divided into the amount to be apportioned. Each partner will then receive his part (portion) by multiplying his ratio with the portion thus calculated, for example:

If the partners receive an equal part of the profits, we merely divide the total amount of the profit by the number of partners. For example, when a profit of R180 000 must be apportioned equally to three partners, the ratio is 1:1:1, which means that each partner will receive the same amount: R180 000 ÷ 3 = R60 000.

A more complicated example is when the profits of a partnership (e.g. R120 000) are apportioned to partners A, B and C in the ratio 3:2:1. We add the numbers of the ratio (3 + 2 + 1 = 6) and then divide the profit of R120 000 by 6, which equals R20 000. Partner A will then receive 3 portions (R20 000 x 3 = R60 000), partner B will receive 2 portions (R20 000 x 2 = R40 000), and partner C

FAC1502/101

21

will receive 1 portion (R20 000 x 1 = R20 000). The total amount allocated to the three partners should be the total profit (i.e. R60 000 + R40 000 + R20 000 = R120 000).

Quite often, profits should be apportioned in relation to the capital invested by each partner. If, for example, partners X, Y and Z invested R200 000, R100 000 and R400 000 in the partnership, the ratio will now be R200 000 + R100 000 + R400 000 = R700 000 = 2:1:4 = 7 (parts are equal to the amounts of the capital portions as well as the total capital, divided by 100 000).

A profit of R280 000 will be apportioned as follows:

Partner X: (R280 000 ÷ 7 x 2) = R 80 000

Partner Y: (R280 000 ÷ 7 x 1) = R 40 000

Partner Z: (R280 000 ÷ 7 x 4) = R160 000

= R280 000

22

15 ANNEXURE B: PROPOSED STUDY PROGRAMME FOR 2015

Please note:

The due date is the date on which the Assignment must reach the Unisa campus in Pretoria. Therefore, if you are using the postal services please provide sufficient time for any delays due to your distance from Pretoria, or otherwise. You can also submit the assignments via the Unisa Mobile MCQ Application or myUnisa.

First semester

Date Study material and assignments

± 13/01 to 22/02 23/02 to 26/02 27/02 06/03 27/02 to 22/03 23/03 to 26/03 27/03 03/04

Study: Study units 1 to 9 Do Assignment 01 (compulsory) Mail Assignment 01 Due date: Assignment 01 Study: Study units 10 to 17 Do Assignment 02 (compulsory) Mail Assignment 02 Due date: Assignment 02

27/03 to 30/03 Do Self-assessment Assignment (comprehensive exercise)

May/June examination (study units 1 to 17)

Second semester

Date Study material and assignments

± 13/07 to 09/08 10/08 to 13/08 14/08 21/08 14/08 to 30/08 30/08 to 03/09 04/09 11/09

Study: Study units 1 to 9 Do Assignment 01 (compulsory) Mail Assignment 01 Due date: Assignment 01 Study: Study units 10 to 17 Do Assignment 02 (compulsory) Mail Assignment 02 Due date: Assignment 02

04/09 to 07/09 Do Self-assessment Assignment (comprehensive exercise)

October/November examination (study units 1 to 17)

FAC1502/101

23

16 ANNEXURE C: ASSIGNMENT 01 (SEMESTER 1)

THIS ASSIGNMENT IS COMPULSORY

AND IS NECESSARY FOR

EXAMINATION ADMISSION.

MARKS COUNT 50% TOWARDS YOUR

YEAR MARK.

FOR STUDENTS REGISTERED

FOR THE FIRST SEMESTER

Due date: 6 March 2015

Unique number: 577581

24

ANNEXURE C: ASSIGNMENT 01 FOR FIRST SEMESTER Do NOT submit assignments by means of fax or e-mail. 1. Answer this assignment on a mark-reading sheet or submit it via the Unisa Mobile MCQ

Application or myUnisa. This assignment is marked electronically, hence the strict adherence to the due date.

2. Before doing this assignment, please read paragraph 9 of this tutorial letter.

3. This assignment covers study units 1 to 9 and comprises of 25 multiple-choice questions.

4. We shall not move the due date of this assignment, allow you to submit it late, or enter into correspondence or telephone conversations in this regard.

5. Important aspects regarding multiple-choice question (MCQ) assignments

If you do not submit Assignment 01 electronically via the Unisa Mobile MCQ Application or myUnisa, you will need a mark-reading sheet. Before completing the mark-reading sheet, please see the instructions in this year’s issue of my Studies @ Unisa. Read these instructions carefully and follow them exactly to avoid mistakes.

Carefully work through the relevant tutorial matter before you tackle the assignment.

Calculate your answer on a separate piece of paper before you complete the mark-reading sheet.

REMEMBER There is only one correct answer to each question. All questions are equal in value. If you use a mark-reading sheet: • Use only the provided mark-reading sheet. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique assignment number for the specific semester correctly. Every assignment

which is marked by the computer has a unique number. The number contains information on the module code and assignment number. For example, when the computer reads the unique number 577581 on the mark-reading sheet, the computer identifies that it is Assignment 01 for that specific module.

• Send only your mark-reading sheet to the Assignment Section in the appropriate envelope. • Make sure that you have enough mark-reading sheets.

FAC1502/101

25

DO NOT • colour more than one block per question • tear or fold the mark-reading sheet • staple the mark-reading sheet to another piece of paper • colour outside the block • colour in the block with a pen • make corrections with correction fluid • submit answers on a written sheet of paper • try to repair a torn mark-reading sheet with sticky tape (Use another mark-reading sheet.)

26

ASSIGNMENT 01 FOR FIRST SEMESTER ASSIGNMENT 01 DUE DATE: 6 March 2015 UNIQUE NUMBER: 577581 (MULTIPLE-CHOICE QUESTIONS) Do this assignment on a mark-reading sheet and mail it, or submit it via the Unisa Mobile MCQ Application or myUnisa. Please ignore VAT in all the questions of this assignment where no VAT rate is given. 1. A person who owes money to the entity is ... .

(1) a debtor (2) a creditor (3) an investor (4) an employee (5) None of the above.

2. Mrs D Moses is a debtor of EB Traders. She paid her account in full and EB Traders issued a

receipt for R500. In which journal will EB Traders record this transaction? (1) cash payments journal (2) sales journal (3) purchases journal (4) cash receipts journal (5) sales returns journal

Use the following information to answer question 3: TR Traders Sales journal - April 2013 SJ 4 Doc no

Day

Details

Fol

VAT output

Sales Debtors control

R R R TR236 19 Mrs T Smith DL2 700 5 000 5 700 TR237 26 Mr H Andrews DL3 490 3 500 3 990 1 190 8 500 9 690

TR Traders Sales returns journal - April 2013 SRJ 4 Doc no

Day

Details

Fol

VAT output

Sales returns

Debtors control

R R R CN100 21 Mrs T Smith DL2 ? ? 2 394 CN101 28 Mr H Andrews DL3 ? ? 1 026 ? ? ?

FAC1502/101

27

ASSIGNMENT 01 (continued) Additional information

(a) VAT is 14%. 3. Which of the following represents the correct presentation of the sales returns account in the

general ledger of TR Traders?

(1) Dr Sales returns N3 Cr

(2) Dr Sales returns N3 Cr

(3) Dr Sales returns N3 Cr

(4) Dr Sales returns N3 Cr

(5) Dr Sales returns N3 Cr

4. On 10 December 2014, Letjatjana Traders paid the entity’s telephone account of R250 with a

business cheque.

The accounts to be debited and credited in the general ledger will be as follows:

(1) The drawings account will be debited, and the bank account will be credited. (2) The drawings account will be debited, and the telephone expense account will be credited. (3) The telephone expense account will be debited, and the bank account will be credited. (4) The telephone expense account will be debited, and the drawings account will be credited. (5) The telephone expense account will be debited, and the capital account will be credited.

2013

April 30

Debtors control

SRJ4

R

3 420

R

R

2013

April 30

Debtors control

SRJ4

R

3 000

2013

April 30

Debtors control

SRJ4

R

3 000

R

R

20.1

April 30

Debtors control

SRJ4

R

3 420

20.1

April 30

Debtors control

SJ4

R

9 690

20.1

April 30

Debtors control

SRJ4

R

3 000

28

ASSIGNMENT 01 (continued) 5. On 11 December 2014, Letjatjana Traders received interest of R1 500 from UNI Bank on a fixed

deposit.

What effect will the transaction have on the accounting equation?

(1) Assets will increase and decrease with R1 500. (2) Assets will increase with R1 500, and equity will decrease with R1 500. (3) Assets will decrease with R1 500, and equity will decrease with R1 500.

(4) Assets will increase with R1 500, and equity will increase with R1 500. (5) Equity will increase and decrease with R1 500. 6. On 15 December 2014, Letjatjana Traders sold goods to Mr Sekole for R9 000 and received his

payment.

If the entity uses the periodic inventory system, what effect will the sales transaction have on the accounting equation?

(1) Assets will increase and decrease with R9 000. (2) Assets will increase with R9 000, and liabilities will increase with R9 000. (3) Assets will increase with R9 000, and equity will increase with R9 000.

(4) Equity will increase and decrease with R9 000. (5) Assets will decrease with R9 000, and equity will increase with R9 000.

7. On 15 December 2014, Letjatjana Traders sold goods to Mr Sekole for R9 000 and received his payment.

If the entity uses the perpetual inventory system, which accounts will be debited and credited in the general ledger with the “cost of sales” portion of this transaction:

(1) The cost of sales account will be debited, and inventory account will be credited. (2) The cost of sales account will be credited, and the sales account will be debited. (3) The sales account will be debited, and the inventory account will be credited. (4) The trading inventory deficit account will be debited, and the inventory account will be

credited. (5) The trading inventory deficit account will be debited, and the sales account will be credited.

8. On 15 December 2014, Letjatjana Traders sold goods to Mr Sekole for R9 000 and received his

payment.

If the entity uses the perpetual inventory system with a markup percentage of 20% on cost, the cost of sales will amount to … .

(1) R 1 500 (2) R 7 500 (3) R 1 800 (4) R 9 000 (5) R10 800

9. On 20 December 2014, the owner of Letjatjana Traders took goods to the value of R2 000 (cost

price) for personal use. The entity uses a perpetual inventory system.

The accounts to be debited and credited in the general ledger will be as follows:

(1) The drawings account will be debited, and the purchases account will be credited. (2) The drawings account will be debited, and the inventory account will be credited. (3) The inventory account will be debited, and the drawings account will be credited. (4) The purchases account will be debited, and the drawings account will be credited. (5) None of the above.

FAC1502/101

29

ASSIGNMENT 01 (continued) 10. On 20 December 2014, the owner of Letjatjana Traders took goods to the value of R2 000 (cost

price) for personal use. The entity uses the perpetual inventory system.

What effect will the transaction have on the accounting equation?

(1) Equity will increase and decrease with R2 000. (2) Assets will increase and decrease with R2 000. (3) Assets will decrease with R2 000, and equity will increase with R2 000. (4) Assets will decrease with R2 000, and equity will decrease with R2 000. (5) Assets will increase with R2 000, and equity will increase with R2 000. 11. On 23 December 2014, Letjatjana Traders purchased goods for R70 000 and paid by cheque. The

entity uses the perpetual inventory system.

The accounts to be debited and credited in the general ledger will be as follows:

(1) The inventory account will be debited, and the bank account will be credited. (2) The purchases account will be debited, and the bank account will be credited. (3) The inventory account will be debited, and the creditors control account will be credited. (4) The purchases account will be debited, and the creditors control account will be credited. (5) None of the above. Use the following information to answer question 12 to 14: The following information was obtained from the records of Cool Importers for the year ended 28 February 2013:

A physical inventory count on 28 February 2013 indicated that inventory on hand amounted to R400 000. 12. The net turnover for the year ended 28 February 2013 to be used to calculate the gross profit for

the year will be … .

(1) R750 000 (2) R748 500 (3) R748 150 (4) R749 850 (5) R746 450 13. The cost of sales for the year ended 28 February 2013 will be … .

(1) R540 000 (2) R686 850 (3) R288 150 (4) R789 150 (5) None of the above.

R Inventory (1 March 2012).......................................................................................................... Sales......................................................................................................................................... Purchases................................................................................................................................. Sales returns............................................................................................................................. Purchases returns..................................................................................................................... Freight charges on purchases................................................................................................... Freight charges on sales........................................................................................................... Settlement discount granted.....................................................................................................

149 500 750 000 540 000

1 500 2 000

650 1 700

350

30

ASSIGNMENT 01 (continued) 14. The gross profit for the year ended 28 February 2013 will be … .

(1) R458 300 (2) R460 000 (3) R458 350 (4) R250 500 (5) None of the above. 15. If the gross profit of an entity for the year ended 28 February 2013 is R460 000, and the entity use

a gross profit mark-up percentage of 20% on cost. What will the cost of sales amount be for the year ended 28 February 2013?

(1) R 552 000 (2) R2 760 000 (3) R 383 333 (4) R2 300 000 (5) None of the above. Use the following information to answer question 16 to 21: The following information for April 2013 relates to NP Glassworks.

NP Glassworks Cash receipts journal (Bank column only) – April 2013 CRJ04

Bank statement of NP Glassworks for April 2013 Address: 21 Third Road, Durban, 4000

Date Details Debit R

Credit R

Balance R

01/04/2013 04/04/2013 07/04/2013 08/04/2013 12/04/2013 15/04/2013 18/04/2013 21/04/2013 29/04/2013

Balance Cheque no: 1651 Deposit Deposit Cheque no: 1653 Cheque no: 1654 Deposit Unpaid cheque Deposit Cheque no: 1656 Direct deposit: Mrs A Ngcobo Cheque no: 1657 Service fees Debit order: WM Insurers Interest

2 500,00

1 000,00 650,00

500,00

6 000,00

250,00 300,00

3 500,00

15 000,00 30 000,00

6 000,00

650,00

2 000,00

459,50

7 000,00(Cr) 4 500,00(Cr)

19 500,00(Cr) 49 500,00(Cr) 48 500,00(Cr) 47 850,00(Cr) 53 850,00(Cr) 53 350,00(Cr) 54 000,00(Cr) 48 000,00(Cr) 50 000,00(Cr) 49 750,00(Cr) 49 450,00(Cr) 45 950,00(Cr) 46 409,50(Cr)

Date Details Analysis R

Bank R

04/04/2013 Cash sales 15 000,00 15 000,00 07/04/2013 Cash sales 30 000,00 30 000,00 12/04/2013 Mr K Thomas 6 000,00 6 000,00 15/04/2013 Cash sales 650,00 650,00 29/04/2013

Cash sales Cash sales

10 000,00 4 000,00

14 000,00

65 650,00

FAC1502/101

31

ASSIGNMENT 01 (continued)

NP Glassworks Cash payments journal (Bank column only) – April 2013 CPJ04

Additional information (a) On 1 April 2013, the opening balance of the bank account was R7 000.

(b) The bank dishonoured an unpaid cheque for R500,00 originally received from Miss K Moodley due to insufficient funds in her bank account.

(c) NP Glassworks sublets part of its building to Mrs A Ngcobo, who pays the monthly rental via electronic funds transfer.

Compare the bank statement, cash receipts journal and cash payments journal for April 2013 and answer each question by choosing the correct option. 16. The following amounts must still be included in the cash receipts journal of NP Glassworks for

April 2013:

(1) R6 000,00 + R 2 000,00 + R459,50 (2) R15 000,00 + R30 000,00 + R6 000,00 + R650,00 + R2 000,00 + R459,50 (3) R65 650,00 (4) R2 000,00 + R459,50 (5) None of the above. 17. The following amounts must still be included in the cash payments journal of NP Glassworks for

April 2013:

(1) R500,00 + R300,00 + R3 500,00 (2) R500,00 + R300,00 + R3 500,00 – R459,50 (3) R1 900,00 + R1 500,00 + R2 000,00 + R500,00 + R300,00 + R3 500,00 (4) R15 800,00 (5) None of the above.

Date Details Bank R

04/04/2013 DBN Municipality, Cheque no: 1651 2 500,00 06/04/2013 AKR Wholesalers, Cheque no: 1652 1 900,00 08/04/2013

Mr R Maverick, Cheque no: 1653 Cash, Cheque no: 1654

1 000,00 650,00

13/04/2013 PR Stationers, Cheque no: 1655 1 500,00 15/04/2013 HS Vehicles, Cheque no: 1656 6 000,00 21/04/2013 Cash, Cheque no: 1657 250,00 29/04/2013 Mrs V Khumalo, Cheque no: 1658 2 000,00 15 800,00

32

ASSIGNMENT 01 (continued) 18. Which one of the following ledger accounts correctly reflects the bank account on 30 April 2013:

(1) NP Glassworks General ledger Dr Bank Cr

(2) NP Glassworks General ledger Dr Bank Cr

(3) NP Glassworks General ledger Dr Bank Cr

(4) NP glassworks General ledger Dr Bank Cr

(5) None of the above.

2013

April 1 30

Balance Total receipts

b/d CRJ4

R

7 000,00 68 109,50

2013

April 30

Total payments Balance

CPJ4 c/d

R

20 100,00 55 009,50

75 109,50

75 109,00

2013

May 1

Balance

b/d

55 009,50

2013

April 1 30

Balance Total payments Balance

b/d CPJ4 c/d

R

7 000,00 20 100,00 41 009,50

2013

April 30

Total receipts

CRJ4

R

68 109,50

68 109,50

68 109,50

2013 May 1

Balance

b/d

41 009,50

2013

April 1 30

Balance Total receipts

b/d CRJ4

R

46 409,50 68 109,50

2013

April 30

Total payments Balance

CPJ4 c/d

R

20 100,00 94 419,00

114 519,00

114 519,00

2013

May 1

Balance

b/d

94 419,00

2013

April 30

Total receipts

CRJ4

R

68 109,50

2013

April 30

Balance Total payments Balance

b/d CPJ4 c/d

R

7 000,00 20 100,00 41 009,50

68 109,50

68 109,50

2013

May 1

Balance

b/d

41 009,50

FAC1502/101

33

ASSIGNMENT 01 (continued) 19. The balance of the bank statement to be used on the bank reconciliation statement as at

30 April 2013 will be … . (1) R 7 000,00 debit (2) R 7 000,00 credit (3) R46 409,50 debit (4) R46 409,50 credit (5) None of the above. 20. The outstanding deposits on the bank reconciliation statement as at 30 April 2013 amount to … . (1) R14 000,00 debit (2) R14 000,00 credit (3) R16 459,50 debit (4) R16 459,50 credit (5) None of the above. 21. The outstanding cheques on the bank reconciliation statement as at 30 April 2013 amount to … . (1) R9 700 debit (2) R9 700 credit (3) R5 400 debit (4) R5 400 credit (5) None of the above. Use the following information to answer question 22:

22. The balance of the bank account in the general ledger amount to … . (1) R5 540 debit (2) R5 540 credit (3) R5 010 debit (4) R5 010 credit (5) None of the above. Use the following information to answer question 23:

Debit R

Credit R

Debit balance as per bank statement 4 280 Credit outstanding deposit 530 Debit outstanding cheques: B201 B202

540 720

Debit R

Credit R

Credit balance as per bank statement 4 280 Credit outstanding deposit ? Debit outstanding cheques: B201 B202

540 720

Debit balance as per bank account 4 340

34

ASSIGNMENT 01 (continued) 23. What is the amount of the outstanding deposit to be shown on the bank reconciliation statement? (1) R1 320 (2) R1 260 (3) R4 340 (4) R 60 (5) None of the above. Use the following information to answer question 24:

24. What is the amount of the balance as per bank statement to be shown on the bank reconciliation statement?

(1) R4 900 debit (2) R4 900 credit (3) R5 600 debit (4) R5 600 credit (5) None of the above. Use the following information to answer question 25: The following information was obtained from the records of Betterorworse Importers for the year ended 28 February 2013: R R Revenue 750 000 Cost of sales (305 650) Opening inventory ? Purchases 355 000 Carriage on purchases 1 500 Closing inventory (86 450) Gross profit 444 350 25. The opening inventory amounts to … .

(1) R575 700 (2) R 30 050 (3) R 35 600 (4) R574 200 (5) None of the above

END OF ASSIGNMENT 01 FOR FIRST SEMESTER

Debit R

Credit R

Credit balance as per bank statement ? ? Credit outstanding deposit 700 Debit outstanding cheques: B201 B202

540 720

Debit balance as per bank account 4 340

FAC1502/101

35

17 ANNEXURE D: ASSIGNMENT 02 (SEMESTER 1)

THIS ASSIGNMENT IS COMPULSORY.

MARKS COUNT 50% TOWARDS YOUR

YEAR MARK.

FOR STUDENTS REGISTERED

FOR THE FIRST SEMESTER

Due date: 10 April 2015

Unique number: 577644

36

ANNEXURE D: ASSIGNMENT 02 FOR THE FIRST SEMESTER Do NOT submit assignments by means of fax or e-mail. 1. Answer this assignment on a mark-reading sheet or submit it via the Unisa Mobil MCQ

Application or myUnisa. This assignment is marked electronically, hence the strict adherence to the due date.

2. Before doing this assignment, please read paragraph 9 of this tutorial letter.

3. This assignment covers study units 1 to 17, and comprises of 25 multiple-choice questions.

4. We shall not move the due date of this assignment, allow you to submit it late, or enter into correspondence or telephone conversations in this regard.

5. Important aspects regarding multiple-choice question (MCQ) assignments If you do not submit Assignment 02 electronically via the Unisa Mobile MCQ Application or

myUnisa, you will need a mark-reading sheet. Before completing the mark-reading sheet, please see the instructions in this year’s issue of my Studies @ Unisa. Read these instructions carefully and follow them exactly to avoid mistakes.

Carefully work through the relevant tutorial matter before you tackle the assignment. Calculate your answer on a separate piece of paper before you complete the mark-reading sheet.

REMEMBER There is only one correct answer to each question. All questions are equal in value. If you use a mark-reading sheet: • Use only the provided mark-reading sheet. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique assignment number for the specific semester correctly. Every assignment

which is marked by the computer has a unique number. The number contains information on the module code and assignment number. For example, when the computer reads the unique number 577644 on the mark-reading sheet, the computer identifies that it is Assignment 02 for that specific module.

• Send only your mark-reading sheet to the Assignment Section in the appropriate envelope. • Make sure that you have enough mark-reading sheets.

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DO NOT • colour more than one block per question • tear or fold the mark-reading sheet • staple the mark-reading sheet to another piece of paper • colour outside the block • colour in the block with a pen • make corrections with correction fluid • submit answers on a written sheet of paper

• try to repair a torn mark-reading sheet with sticky tape (Use another mark-reading sheet.)

38

ASSIGNMENT 02 FOR FIRST SEMESTER ASSIGNMENT 02 DUE DATE: 10 April 2015 UNIQUE NUMBER: 577644 (MULTIPLE-CHOICE QUESTIONS) Do this assignment on a mark-reading sheet and mail it, or submit it via the Unisa Mobile MCQ Application or myUnisa. The following three questions pertain to the accounting records of Basadi Traders for April 2014. 1. A comparison of the bank reconciliation statement as at 31 March 2014 with the bank statement for the month ending 30 April 2014 revealed that cheque number 41 dated 1 October 2013 and issued to KK Sams for R900 appeared as outstanding on the bank reconciliation statement but not yet on the bank statement. The cheque has now become stale. The correct entry in the accounting records of Basadi Traders for cheque number 41 is as follows:

(1) To debit the bank reconciliation statement as at 30 April 2014 with cheque number 41 for R900 not yet presented for payment.

(2) To credit the bank reconciliation statement as at 30 April 2014 with cheque number 41 (stale cheque) for R900.

(3) To make an entry in the cash receipts journal for April 2014: KK Sam (stale cheque number 41), R900.

(4) To make an entry in the cash payments journal for April 2014: KK Sam (stale cheque number 41), R900.

(5) None of the above. 2. The cheques not yet presented for payment in the bank reconciliation statement as at

31 March 2014 were as follows:

- Cheque number 41 for R900, dated 1 October 2013 (KK Sams). This cheque is still yet to be presented. The cheque has become stale and must be cancelled.

- Cheque number 91 for R140, dated 5 March 2014 (A Gideon). This cheque has been lost in the post. No entry has been made in respect of the cancellation of the lost cheque. The missing cheque was replaced by issuing cheque number 98 (dated 5 April 2014).

- Cheque number 94 for R200, dated 28 March 2014 (AB Wholesalers), R200 has not been presented to the bank for payment by 30 April 2014.

On comparing the cash journals for the month ending 30 April 2014 with the bank statement for the same period, the following cheques have not yet been presented to the bank for payment:

- Cheque number 105 for R670, dated 22 April 2014 (A Kalaka) - Cheque number 112 for R790, dated 28 April 2014 (S Maloka)

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ASSIGNMENT 02 (continued) The cheques not yet presented for payment in the bank reconciliation statement of Basadi Traders as at 30 April 2014 are:

(1) Cheque number 41 for R900, dated 1 October 2013 (KK Sams) Cheque number 91 for R140, dated 5 March 2014 (A Gideon) Cheque number 94 for R200, dated 28 March 2014 (AB Wholesalers) Cheque number 105 for R670, dated 22 April 2014 (A Kalaka) Cheque number 112 for R790, dated 28 April 2014 (S Maloka) (2) Cheque number 41 for R900, dated 1 October 2013 (KK Sams) Cheque number 94 for R200, dated 28 March 2014 (AB Wholesalers) Cheque number 105 for R670, dated 22 April 2014 (A Kalaka) Cheque number 112 for R790, dated 28 April 2014 (S Maloka) (3) Cheque number 91 for R140, dated 5 March 2014 (A Gideon) Cheque number 94 for R200, dated 28 March 2014 (AB Wholesalers) Cheque number 105 for R670, dated 22 April 2014 (A Kalaka) Cheque number 112 for R790, dated 28 April 2014 (S Maloka) (4) Cheque number 94 for R200, dated 28 March 2014 (AB Wholesalers) Cheque number 105 for R670, dated 22 April 2014 (A Kalaka)

Cheque number 112 for R790, dated 28 April 2014 (S Maloka) (5) None of the above. 3. The bank reconciliation statement as at 31 March 2014 showed a credit balance per bank

statement to the amount of R3 071 and a debit balance per bank account to the amount of R4 931. The bank statement showed a favourable balance to the amount of R3 901 on 30 April 2014.

The balance per bank statement in the bank reconciliation statement of Basadi Traders as at

30 April 2014 is a … . (1) credit balance to the amount of R3 071

(2) credit balance to the amount of R3 901 (3) debit balance to the amount of R4 931 (4) credit balance to the amount of R4 931 (5) debit balance to the amount of R3 901 Use the following information to answer question 4 to 6: The following three questions pertain to the accounting records of Zizobenza Traders for March 2013: The following balances were extracted from the accounting records of Zizobenza Traders on 1 March 2013:

Debtors control, R32 780 (debit) Debtors control, R1 780 (credit) Allowance for credit losses, R1 538.

An additional amount of R1 450, relating to a debtor who disappeared, should be written off as irrecoverable. This transaction was not yet recorded. It is the practice of the entity not to record credit losses directly into the allowances for credit losses account.

40

ASSIGNMENT 02 (continued)

4. The correct entry to record the irrecoverable amount is the following:

(1) Debit the allowance for credit losses account, and credit the credit losses account with R1 450.

(2) Debit the credit losses account, and credit the debtors control account with R1 450. (3) Debit the credit losses account, and credit the allowance for credit losses account with

R1 450. (4) Debit the allowance for credit losses account, and credit the debtors control account with

R1 450. (5) None of the above. 5. The allowance for credit losses must be increased to R2 432 for the month ending 31 March 2013.

The correct entry in the accounting records of Zizobenza Traders for the above transaction is as follows:

(1) Debit the debtors control account, and credit the allowance for credit losses account with R2 432.

(2) Debit the credit losses account, and credit the allowance for credit losses account with R894.

(3) Debit the debtors control account, and credit the allowance for credit losses account with R894.

(4) Debit the credit losses account, and credit the debtors control account with R2 432. (5) None of the above. 6. During March 2013, Zizobenza Traders purchased merchandise to the value of R2 736 on credit,

and this transaction was erroneously recorded in the sales journal and posted as such. They use the periodic inventory system.

The entries in the accounting records of Zizobenza Traders in respect of the correction of the error are as follows:

(1) Debit the debtors control account and credit the sales account with R2 736, and debit the purchases account and credit the creditors control account with R2 736.

(2) Credit the debtors control account and debit the sales account with R2 736, and debit the creditors control account and credit the purchases account with R2 736.

(3) Debit the debtors control account and credit the sales account with R2 736, and debit the creditors control account and credit the purchases account with R2 736.

(4) Debit the sales account and credit the debtors control account with R2 736, and debit the purchases account and credit the creditors control account.

(5) None of the above. Use the following information to answer question 7 to 9:

Extract from the accounting records of Corner Retailers at 31 March 2013 Totals of the subsidiary journals: Sales journal (sales plus VAT), R16 840 Purchases journal (purchases plus VAT), R12 480 Sales returns journal (sales returns plus VAT), R1 200 Purchases returns journal (purchases returns plus VAT), R820 Sales column in the cash receipts journal, R24 560 Purchases column in the cash payments journal, R34 670 Debtors control column in the cash receipts journal, R22 750 Debtors control column in the cash payments journal, R3 200 Settlement discount granted column in the cash receipts journal, R3 500 Creditors control column in the cash payments journal, R32 980 Settlement discount received column in the cash payments journal, R2 890

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ASSIGNMENT 02 (continued)

7. Which of the above totals will be entered on the debit side of the debtors control account?

(1) sales plus VAT in the sales journal, R16 840; debtors control column in the cash payments journal, R3 200

(2) sales less VAT in the sales journal, R14 772; debtors control column in the cash payments journal, R3 200

(3) sales plus VAT in the sales journal, R16 840; debtors control column in the cash receipts journal, R22 750 and settlement discount granted column in the cash receipts journal, R3 500

(4) purchases less VAT in the purchases journal, R8 914; debtors control column in the cash payments journal, R3 200

(5) None of the above.

8. Which of the above totals will be entered on the debit side of the creditors control account?

(1) purchases journal (purchases plus VAT), R12 480; creditors control column in the cash payments journal, R32 980

(2) purchases returns (purchases returns less VAT), R719,30; creditors control column in the cash payments journal, R32 980

(3) purchases returns (purchases returns plus VAT), R820; creditors control column in the cash payments journal, R32 980; settlement discount received column in the cash payments journal, R2 890

(4) purchases returns (purchases returns plus VAT), R820; creditors control column in the cash payments journal, R32 980

(5) None of the above.

9. Which of the above totals for the subsidiary journals represents R/D cheques from debtors?

(1) debtors control column in the cash receipts journal, R22 750 (2) debtors control column in the cash payments journal, R3 200 (3) settlement discount granted column in the cash receipts journal, R3 500 (4) creditors control column in the cash payments journal, R32 980 (5) settlement discount received column in the cash payments journal, R2 890 Balances from the accounting records of Care Traders at 1 March 2013:

Debtors control, R32 780 (debit) Debtors control, R1 780 (credit) Creditors control, R2 020 (debit) Creditors control, R24 720 (credit)

The following information has not been taken into account in arriving at the balances listed above:

- The credit balances of debtors and debit balances of creditors on 1 March 2013, should be transferred to the creditors control and debtors control accounts respectively.

10. The correct entries in the accounting records of Care Traders to record the above transactions are:

(1) debit debtors control account with R1 780, and credit debtors control account with R1 780; debit creditors control account with R2 020, and credit debtors control account with R2 020

(2) debit creditors control account with R1 780, and credit debtors control account with R1 780; debit creditors control account with R2 020, and credit debtors control account with R2 020

(3) debit debtors control account with R1 780, and credit creditors control account with R1 780; debit debtors control account with R2 020, and credit creditors control account with R2 020

(4) debit creditors control account with R1 780, and credit debtors control account with R1 780; debit debtors control account with R2 020, and credit creditors control account with R2 020

(5) None of the above.

42

ASSIGNMENT 02 (continued) Use the following information to answer question 11 to 15: The following questions concern the preparation of the statement of financial position of Bonsai Traders as at 31 December 2014:

Mr T Bonsai runs a small renting business from home. His accounting records show the following balances at the end of his financial year, 31 December 2014:

Capital R153 850 Drawings R 4 567 Land and buildings at cost R273 560 Vehicles at cost R 60 000 Equipment at cost R 40 000 Accumulated depreciation: Vehicles (1 January 2014) R 36 000 Accumulated depreciation: Equipment (1 January 2014) R 5 500 Debtors control R 37 897 Bank R 10 087 (debit) Petty cash R 257 Creditors control R 16 568 Mortgage R200 000

11. Use the balances above as well as the following additional information to calculate the depreciation on equipment for the year ended 31 December 2014:

Additional information Equipment with a cost price of R8 000 was purchased on 1 July 2014, and installation cost of R1 500 was incurred.

Provide for depreciation on equipment at 10% per annum on the straight line method.

The depreciation on equipment for the year ended 31 December 2014 is … .

(1) R4 000 (2) R4 475 (3) R4 800 (4) R3 525 (5) R3 600 12. Use the balances above as well as the following additional information to calculate the depreciation on vehicles for the year ended 31 December 2014.

Additional information On 1 January 2011 Mr Bonsai purchased a vehicle with a cost price of R5 000. He sold it for cash

on 1 September 2014.

Provide for depreciation on vehicles at 20% per annum on the straight line method.

If necessary amounts must be round off to the nearest Rand.

The depreciation on vehicles for the year ended 31 December 2014 is … .

(1) R11 667 (2) R12 667 (3) R12 333 (4) R13 000 (5) None of the above.

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ASSIGNMENT 02 (continued) 13. Use the balances provided on the previous page as well as the following additional information to calculate the amount for current assets in the statement of financial position as at 31 December 2014.

Additional information On 31 December 2014, consumable stores at hand was R17 250.

The 31 December 2014 bank statement revealed a direct deposit for the January 2015 rental income of R3 500, which the bookkeeper recorded in the bank account on 31 December 2014.

Due to industrial action by the local municipality employees, the water and electricity account of R500 for December 2014 and R450 for January 2015 will only be paid in February 2015.

The insurance premium of R1 500 for December 2014 still needs to be provided for.

The terms of the mortgage, provide for interest to be calculated at 5% per annum. No provision has been made yet for the interest for the current year.

The amount for current assets in the statement of financial position as at 31 December 2014 is … .

(1) R65 491 (2) R77 491 (3) R80 991 (4) R66 991 (5) R65 941 14. Use the balances provided on the previous page and the additional information provided in question 13 to calculate the amount for current liabilities in the statement of financial position as at 31 December 2014.

The amount for current liabilities in the statement of financial position as at 31 December 2014 is … .

(1) R20 568 (2) R32 518 (3) R20 068 (4) R22 068 (5) R32 068 15. Use the balances provided on the previous page as well as the following additional information to calculate the amount for total equity in the statement of financial position as at 31 December 2014.

Additional information The total comprehensive income for the year ended 31 December 2014 was R3 675.

The amount for total equity in the statement of financial position as at 31 December 2014 is … .

(1) R153 850 (2) R149 283 (3) R157 525 (4) R152 958 (5) R154 742

44

ASSIGNMENT 02 (continued) 16. On 31 March 2014, Laura Mapetla traded in an old machine for a new machine costing R20 000. The old machine had a purchase price of R12 000 and an accumulated depreciation of R8 000 on 31 December 2013.

The trade-in value of the old machine was R5 000. Laura provides for depreciation on machinery at 20% per annum on the diminishing balance method.

Ignore VAT for the purpose of this question.

The profit/loss on disposal of the old machine amounts to … .

(1) R1 000 (2) R1 800 (3) R1 600 (4) R1 200 (5) None of the above. Use the following information to answer question 17 to 21: The questions below concern the preparation of the membership fees account as well as the income and expenditure statement of Century Golf Club for the year ended 31 December 2014. The following information relates to the Century Golf Club: (a) Statement of financial position items as at 31 December 2013 Equipment (at cost) R32 000 Accumulated depreciation R11 200 Fixed deposit R26 000 Inventory: Golf balls R 1 120 Accrued membership fees R 208 Prepaid rent (Golf club) R 480 Bank (favourable) R 9 600 Accumulated fund R27 900 Special fund for championships R22 400 Prepaid membership fees R 142 Accrued wages R 84

(b) Cash transactions for the year ended 31 December 2014 Receipts: Visitors fees R 3 770 Membership fees: 2011 R 100 Membership fees: 2012 R30 380 Membership fees: 2013 R 32 Entrance fees R 998 Donations R 5 490

(c) Cash transactions for the year ended 31 December 2014

Payments:

Rates and taxes R 4 452 Refreshments R 1 900 Stationery R 1 622 Golf balls R 6 420 Affiliation fees R 220 Honorarium R 2 240 Wages R 3 960 Maintenance R 1 788 Rental: Golf club R 5 400 Equipment (purchased on 30 September 2014) R 3 400

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ASSIGNMENT 02 (continued) Additional information for question 17 and 18 Unpaid membership fees for 2013 are irrecoverable The club has 85 members and membership fees amount to R30 per month. 17. The amount that must be transferred from the membership fees account to the income and expenditure statement for the year ended 31 December 2014 is … .

(1) R30 380 (2) R30 512 (3) R30 522 (4) R30 600 (5) R 2 550 18. The amount for credit losses in the membership fees account for the year ended 31 December 2014 is … .

(1) R208 (2) R108 (3) R100 (4) R308 (5) R142 Additional information for question 19 Provide for depreciation on equipment at 20% per annum on the diminishing balance method. 19. The amount for depreciation on equipment in the income and expenditure statement for the year

ended 31 December 2014 is … .

(1) R6 570 (2) R4 840 (3) R7 080 (4) R4 670 (5) R4 330 Additional information for question 20 Inventory on hand at 31 December 2014

Golf balls R240 Refreshments R 92 20. The amount for golf balls as expenditure in the income and expenditure statement for the year

ended 31 December 2014 is … .

(1) R6 420 (2) R6 660 (3) R7 300 (4) R6 180 (5) R7 540

46

ASSIGNMENT 02 (continued) Additional information for question 21 Wages of R360 are still outstanding. 21. The amount for wages in the income and expenditure statement for the year ended

31 December 2014 is … .

(1) R4 236 (2) R3 960 (3) R3 600 (4) R3 684 (5) R4 044 Use the following information to answer question 22 to 25: Extract from the trial balance of Jumbo Traders for the years ended 30 September 2013 and 30 September 2014

30 September 2014

R

30 September 2013

R Inventory 165 000 155 000 Debtors control 203 000 159 000 Allowances for credit losses 25 000 18 000 Creditors control 120 000 68 000

Additional information (a) Cash received from debtors for the year ended 30 September 2014 amounted to R950 000, and

credit losses of R8 000 had been written off.

(b) Cash payments to creditors for the year ended 30 September 2014 amounted to R560 000.

(c) Jumbo Traders use the perpetual inventory system. 22. The sales amount in the debtors control account for the 2014 financial year is … .

(1) R 950 000 (2) R 914 000 (3) R 986 000 (4) R1 002 000 (5) None of the above. 23. The inventory amount in the creditors control account for the 2014 financial year is … .

(1) R508 000 (2) R560 000 (3) R612 000 (4) R680 000 (5) None of the above. 24. The cost of sales amount in the inventory account for the 2014 financial year is … .

(1) R602 000 (2) R622 000 (3) R498 000 (4) R550 000 (5) None of the above.

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ASSIGNMENT 02 (continued) 25. The gross profit amount in the trading account for the 2014 financial year is … .

(1) R390 000 (2) R400 000 (3) R292 000 (4) R436 000 (5) None of the above.

END OF ASSIGNMENT 02 FOR FIRST SEMESTER

48

18 ANNEXURE E: ASSIGNMENT 01 (SEMESTER 2)

THIS ASSIGNMENT IS COMPULSORY

AND IS NECESSARY FOR

EXAMINATION ADMISSION

MARK COUNT 50% TOWARDS YOUR

YEAR MARK.

STUDENTS REGISTERED

FOR THE SECOND SEMESTER

Due date: 21 August 2015

Unique number: 577665

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ANNEXURE E: ASSIGNMENT 01 FOR SECOND SEMESTER Do NOT submit assignments by means of fax or e-mail. 1. Answer this assignment on a mark-reading sheet or submit it via the Unisa Mobile MCQ

Application or myUnisa. This assignment is marked electronically, hence the strict adherence to the due date.

2. Before doing this assignment, please read paragraph 9 of this tutorial letter.

3. This assignment covers study units 1 to 9 and comprises of 25 multiple-choice questions.

4. We shall not move the due date of this assignment, allow you to submit it late, or enter into correspondence or telephone conversations in this regard.

5. Important aspects regarding multiple-choice question (MCQ) assignments If you do not submit Assignment 01 electronically via the Unisa Mobile MCQ Application or

myUnisa, you will need a mark-reading sheet. Before completing the mark-reading sheet please see the instructions in this year’s issue of my Studies @ Unisa. Read these instructions carefully and follow them exactly to avoid mistakes.

Carefully work through the relevant tutorial matter before you tackle the assignment. Calculate your answer on a separate piece of paper before you complete the mark-reading

sheet. REMEMBER There is only one correct answer to each question. All questions are equal in value. If you use a mark-reading sheet: • Use only the provided mark-reading sheet. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique assignment number for the specific semester correctly. Every assignment

which is marked by the computer has a unique number. The number contains information on the module code and assignment number. For example, when the computer reads the unique number 577665 on the mark-reading sheet, the computer identifies that it is Assignment 01 for that specific module.

• Send only your mark-reading sheet to the Assignment Section in the appropriate envelope.

• Make sure that you have enough mark-reading sheets.

50

DO NOT • colour more than one block per question • tear or fold the mark-reading sheet • staple the mark-reading sheet to another piece of paper • colour outside the block • colour in the block with a pen • make corrections with correction fluid • submit answers on a written sheet of paper • try to repair a torn mark-reading sheet with sticky tape (Use another mark-reading sheet.)

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ASSIGNMENT 01 FOR THE SECOND SEMESTER ASSIGNMENT 01 DUE DATE: 21 August 2015 UNIQUE NUMBER: 577665 (MULTIPLE-CHOICE QUESTIONS) Do this assignment on a mark-reading sheet and mail it, or submit it via the Unisa Mobile MCQ Application or myUnisa. 1. An entity trading in stationery bought computer equipment on credit. The entry will be entered in

the … as the book of first entry.

(1) general journal (2) purchases journal (3) cash payments journal

(4) general ledger (5) None of the above. 2. B Verster Corner Shop paid the electricity of his business with a cheque (Cheque number 15004).

The amount due to the City of Tshwane was R1 500.

In which journal of the entity will the above transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above. 3. B Verster Corner Shop sold goods to the value of R500 to Mrs Amla, who paid in cash.

In which journal of the entity will the above transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above. 4. B Verster Corner Shop sold goods on credit to the value of R500 to Mrs Amla.

In which journal of the entity will the above transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above. 5. B Verster Corner Shop purchased goods on credit to the value of R10 000 from ACB Suppliers.

In which journal of the entity will the above transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above.

52

ASSIGNMENT 01 (continued) 6. Mrs Rhodes, a debtor of B Verster Corner Shop, paid her account of R1 500 in full by means of an

electronic funds transfer (EFT).

In which journal of the entity will the above transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above.

Use the following information to answer question 7:

7. The above transaction on the debit side of the account originated because of … .

(1) a debtor paying his account (2) your business paying their account (3) your business purchasing goods, and paying cash for the goods (4) a debtor purchasing goods (5) None of the above. 8 Use the following information from the accounting records of Contador Traders to calculate the closing inventory for the year ended 28 February 2014:

R Inventory (1 March 2013) 100 000 Purchases 800 000 Carriage on purchases 5 000 Cost of sales 750 000

. The balance of closing inventory will amount to … .

(1) R100 000 (2) R155 000 (3) R150 000 (4) R160 000 (5) None of the above. 9. A direct deposit from Marc Polo is only shown on the bank statement. In which journal, if any, will

this transaction be recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above.

Dr Creditors control Cr R R 2014 2014 Jan 9 Bank CPJ 2 000 Jan 1 Balance b/d 9 000

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ASSIGNMENT 01 (continued) 10. A service fee is shown on the bank statement. In which journal, if any, will this transaction be

recorded?

(1) cash receipts journal (2) cash payments journal (3) purchases journal (4) sales journal (5) None of the above. 11. Beetroot and Sons bought a motor vehicle financed through Midbank. Which journal is used to

record the motor vehicle in the accounting records?

(1) cash payments journal (2) purchases journal (3) cash receipts journal (4) general journal (5) None of the above. 12. Mr Big, the owner of Big Stationery, took stationery for personal use. He did not pay for it. Which

journal will be used to record this? (1) cash payments journal (2) sales journal (3) general journal (4) purchases journal (5) None of the above. 13. On 1 January 2014, Mr Grape obtained a loan from E Bank for R50 000 at an interest rate of 12%

per annum. The interest must be capitalised and is payable in bi-annual instalments. What would the amount of the first bi-annual interest payment be?

(1) R6 000 (2) R3 000 (3) R3 180 (4) R6 360 (5) None of the above. 14. Mr Delivery has a truck which cost R57 000 inclusive of VAT. The depreciation rate is 20% per

annum on the straight line method. Mr Delivery is not registered as a VAT vendor. He bought the truck on 1 September 2013. What would the depreciation amount be if the year-end is on 28 February 2014?

(1) R 5 000 (2) R10 000 (3) R 5 700 (4) R11 400 (5) None of the above. 15. What inventory system is used when purchased goods are allocated directly to the purchases

account? (1) weighted-average method (2) perpetual method (3) periodic method (4) gross profit method (5) historical cost method

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ASSIGNMENT 01 (continued) 16. When recording closing journals, to which account is the total comprehensive income or loss for

the year posted? (1) trading account (2) capital account (3) drawings account (4) bank (5) None of the above. 17. Mr T Tumble sells bean bags for R570 inclusive of VAT at 14%. He uses a mark-up percentage of

25% on cost. What is the cost of sales? (1) R456,00 (2) R100,00 (3) R142,50 (4) R400,00 (5) None of the above. Use the following information to answer question 18 to 21: Extract from the accounting records of Zizobenza Traders on 31 March 2013 (the financial year-end) Totals of the subsidiary journals at 31 March 2013 R Sales journal 16 840 Purchases journal 12 480 Sales returns journal 1 200 Purchases returns journal 820 Sales column in the cash receipts journal 24 560 Purchases column in the cash payments journal 34 670 Debtors control column in the cash receipts journal 22 750 Debtors control column in the cash payments journal 3 200 Settlement discount granted column in the cash receipts journal 3 500 Creditors control column in the cash payments journal 32 980 Settlement discount received column in the cash payments journal 2 890 Sundry journal entries for March 2013 Debit Credit R R Debtors control 2 760 430 General ledger 4 570 560 Creditors control - 840 Balance at 1 March 2013: Debtors control 32 780 1 780 Creditors control 2 020 24 720 Allowance for credit losses, R1 538

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ASSIGNMENT 01 (continued) The following additional information has not been taken into account in arriving at the figures listed on the previous page: (a) An additional amount of R1 450 relating to a debtor who disappeared should be written off as

irrecoverable.

(b) The credit balances of debtors and debit balances of creditors on 1 March 2013 should be transferred to the creditors control and debtors control accounts respectively.

(c) The allowance for credit losses should be increased to R2 432.

(d) During March 2013, merchandise to the value of R2 736 was purchased on credit, and this transaction was erroneously recorded in the sales journal and posted “correctly” from the sales journal to the general and debtors ledgers.

18. Which of the following represent the correct amount for credit losses to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 31 March 2013? (1) R1 450 (2) R1 538 (3) R2 432 (4) R2 988 (5) R2 344 19. Which of the following correctly represents the correction for the incorrect accounting recording of

merchandise to the value of R2 736 purchased on credit in the general ledger? The business uses the periodic inventory system.

Sales Purchases Debtors control Creditors control (1) Debit Credit Debit Credit (2) Credit Debit Credit Debit (3) Debit Debit Credit Credit (4) Credit Credit Debit Debit (5) Debit Credit Credit Debit

20. Which of the following represents the correct transfer of a debit balance from the creditors ledger

to the debtors ledger?

Debtors control Creditors control (1) Credit Credit (2) Debit Debit (3) Credit Debit (4) Debit Credit (5) None of the above. None of the above.

21. Which of the following amounts correctly represent the adjusted balance of the debtors control

account after the additional information above has been taken into account? (1) R28 140 (2) R29 034 (3) R28 856 (4) R32 056 (5) R30 276

56

ASSIGNMENT 01 (continued) Use the following information to answer question 22 and 23: TR Traders Sales journal - April 2014 SJ 4 Doc no

Day

Details

Fol

VAT output

Sales

Debtors

R R R TR236 19 Mrs T Smith DL2 700 5 000 5 700 TR237 26 Mr H Andrews DL3 490 3 500 3 990 1 190 8 500 9 690 B11

TR Traders Sales returns journal - April 2014 SRJ 4 Doc no

Day

Details

Fol

VAT output

Sales returns

Debtors

R R R CN100 21 Mrs T Smith DL2 ? ? 2 394 CN101 28 Mr H Andrews DL3 ? ? 1 026 ? ? ? B11

Additional information (a) VAT is 14%. 22. How much does Mrs T Smith owe TR Traders on 30 April 2014? (1) R5 700 (2) R2 394 (3) R8 094 (4) R4 000 (5) R3 306 23. The selling price of a product is R2 500. What is the cost price if the mark-up on cost is 25%? (1) R3 000 (2) R1 875 (3) R2 000 (4) R 500 (5) R2 500

FAC1502/101

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ASSIGNMENT 01 (continued) 24. On comparing the cash journals of Big Traders for the month ending 30 April 2014 with the bank

statement for the same period, the bookkeeper found that the following items only appeared on the bank statement for the month ended 30 April 2014:

Service fees R244 Cash deposit fees R 79 Interest on favourable bank balance R158

The correct entry/entries in the accounting records of Big Traders is/are as follows:

(1) bank charges in the cash payments journal to the amount of R481 (R244 + R79 + R158) for April 2014

(2) bank charges to the amount of R323 (R244 + R79) and interest on the bank account to the amount of R158 in the cash payments journal for April 2014

(3) bank charges in the cash payments journal to the amount of R323 (R244 + R79) for April 2014 and interest on the bank account to the amount of R158 in the cash receipts journal for April 2014

(4) bank charges to the amount of R323 (R244 + R79) and interest on bank account to the amount of R158 in the cash receipts journal for April 2014.

(5) None of the above. 25. On comparing the cash journals for the month ended 30 April 2014 with the bank statement for the

same period, it was noted that cheque no 102 dated 26 April 2014 and issued to NAC Stationers for the amount of R282 for stationery purchased was recorded incorrectly in the cash payments journal as R228.

To correct this, you need to … in the accounting records of Big Traders.

(1) enter R54 in the cash receipts journal (2) enter R54 in the cash payments journal (3) enter R282 in the cash receipts journal (4) enter R282 in the cash payments journal (5) None of the above.

END OF ASSIGNMENT 01 FOR THE SECOND SEMESTER

58

19 ANNEXURE F: ASSIGNMENT 02 (SEMESTER 02)

THIS ASSIGNMENT IS COMPULSORY.

MARKS COUNT 50% TOWARDS YOUR

YEAR MARK.

STUDENTS REGISTERED

FOR THE SECOND SEMESTER

Due date: 11 September 2015

Unique number: 577691

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ANNEXURE F: ASSIGNMENT 02 FOR SECOND SEMESTER Do NOT submit assignments by means of fax or e-mail. 1. Answer this assignment on a mark-reading sheet or submit it via the Unisa Mobil MCQ

Application or myUnisa. This assignment is marked electronically, hence the strict adherence to the due date.

2. Before doing this assignment, please read paragraph 9 of this tutorial letter.

3. This assignment covers study units 1 to 17 and comprises of 25 multiple-choice questions.

4. We shall not move the due date of this assignment, allow you to submit it late, or enter into correspondence of telephone conversations in this regard.

5. Important aspects regarding multiple-choice question (MCQ) assignments If you do not submit Assignment 02 electronically via the Unisa Mobile MCQ Application or

myUnisa, you will need a mark-reading sheet. Before completing the mark-reading sheet, please see the instructions in this year’s issue of my Studies @ Unisa. Read these instructions carefully and follow them exactly to avoid mistakes.

Carefully work through the relevant tutorial matter before you tackle the assignment. Calculate your answer on a separate piece of paper before you complete the mark-reading

sheet. REMEMBER There is only one correct answer to each question. All questions are equal in value. If you use a mark-reading sheet: • Use only the provided mark-reading sheets. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique assignment number for the specific semester correctly. Every assignment

which is marked by the computer has a unique number. The number contains information on the module code and assignment number. For example, when the computer reads the unique number 577691 mark-reading sheet, the computer identifies that it is Assignment 02 for that specific module.

• Send only your mark-reading sheet to the Assignment Section in the appropriate envelope.

• Make sure that you have enough mark-reading sheets.

60

DO NOT • colour more than one block per question • tear or fold the mark-reading sheet • staple the mark-reading sheet to another piece of paper • colour outside the block • colour in the block with a pen • make corrections with correction fluid • submit answers on a written sheet of paper • try to repair a torn mark-reading sheet with sticky tape (Use another mark-reading sheet.)

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ASSIGNMENT 02 FOR THE SECOND SEMESTER ASSIGNMENT 02 DUE DATE: 11 September 2015 UNIQUE NUMBER: 577691 (MULTIPLE-CHOICE QUESTIONS) Do this assignment on a mark-reading sheet and mail it, or submit it via the Unisa Mobile MCQ Application or myUnisa. 1. The owner of RG Traders decides to take inventory to the value of R2 000 for his son’s birthday party. RG Traders uses the perpetual inventory system. According to the information provided, which accounts will be debited and credited in the general ledger of RG Traders? (1) The drawings account will be credited, and the inventory account will be debited. (2) The drawings account will be debited, and the inventory account will be credited. (3) The drawings account will be debited, and the purchases account will be credited. (4) The drawings account will be credited, and the purchases account will be debited. (5) The drawings account will be debited, and the debtors control account will be credited. 2. In which journal will an entity record the depreciation of equipment? (1) cash receipts journal (2) cash payments journal (3) sales journal (4) general journal (5) sales returns journal 3. RT Plumber’s returned goods to the value of R5 000 that was previously purchased on credit from

Plumbing Supplies. In which journal will the bookkeeper of RT Plumber’s record the transaction? (1) sales returns journal (2) purchases returns journal (3) cash receipts journal (4) petty cash journal (5) cash payments journal 4. After comparing the journals with the bank statement of WC Stores for August 2014, it was noted

that the bank dishonoured a cheque received from Mrs K Singh for R1 300 due to insufficient funds in her bank account.

In which journal of WC Stores will the above transaction be entered?

(1) cash receipts journal (2) purchases returns journal (3) sales journal (4) purchases journal (5) cash payments journal

62

ASSIGNMENT 02 (continued) Use the following information to answer questions 5 and 6:

A new vehicle was bought on 31 August 2013.

5. Calculate the accumulated depreciation on vehicles at 28 February 2014 if depreciation on vehicles is provided for at 20% per annum on the straight line method.

(1) R32 000 (2) R64 000 (3) R79 000 (4) R47 000 (5) None of the above. 6. Calculate the accumulated depreciation on vehicles on 28 February 2014 if depreciation on

vehicles is provided for at 20% per annum on the diminishing balance method. (1) R72 600 (2) R40 600 (3) R15 000 (4) R57 600 (5) None of the above. Use the following information to answer question 7: Extract from the statements of Letjatjana Traders R Bank charges 500 Favourable bank balance at 1 March 2013 8 990 Interest on overdraft 3 360 Direct deposit by K Phawe (debtor) 1 000 Cheque received from a customer was returned by the bank unpaid 5 300 Debit order – insurance 160 Total payments 9 000 Total receipts 12 000

7. Which balance represents the correct balance of the bank account in the general ledger of

Letjatjana Traders on 1 April 2013? (1) R 8 990 debit (2) R 3 670 debit (3) R14 270 credit (4) R10 390 credit (5) None of the above.

28/02/2014 28/02/2013 R R Vehicles Accumulated depreciation: Vehicles (01/03/2014)

310 000 ?

160 000 32 000

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8. On 31 March 2014, Laura Mapetla traded in an old machine, which had a purchase price of R12 000 and an accumulated depreciation of R8 000 on 31 December 2013, for a new machine costing R20 000.

The trade-in value of the old machine was R5 000. Laura provides for depreciation on machinery at 20% per annum on the diminishing balance method.

Ignore VAT for the purpose of this question.

Depreciation in the statement of profit or loss and other comprehensive income for the year ended 31 December 2014 amounts to … .

(1) R3 000 (2) R3 800 (3) R3 600 (4) R3 200 (5) None of the above. Use the following information to answer questions 9 to 17: YoCo Stores Pre-adjustment trial balance as at 31 May 2013 Debit Credit

R R Capital…………….…………………………………………………………………….. ? Drawings……….……………………………………………………………………….. 5 000 Fixed deposit…………………………………………………………..……………….. 30 000 Land and buildings at cost………………......………………………………………… 150 000 Furniture at cost…………………………………………………………………………. 45 000 Mortgage…………………………………………………………………………………. 30 000 Bank………………………………………………………………………………………. 4 700 Trading inventory (1 June 2012)………….……………………………………………. 12 000 Creditors control…………………………………………………………………………. 7 300 Debtors control………...………………………………………………………………… 5 400 Revenue from sales……………………………………………………………………... 92 100 Purchases………………………………………………………………………………… 35 000 Purchases returns……………………………………………………………………….. 825 Rental income….………………………………………………………………………… 3 600 Bank charges…………………………………………………………………………….. 100 Insurance…………………………………………………………………………………. 2 000 Credit losses……………………………………………………………………………... 150 Settlement discount granted….………………………………………………………… 250 Municipal tax……..………………………………………………………………………. 600 Salaries and wages……………………………………………………………………... 12 900 Carriage on purchases………………………………………………………………….. 720 Carriage on sales………………………………………………………………………... 450 Custom duties on purchases…..………………………………………………………. 125 Packing material…………………………………………………………………………. 1 395 Interest on mortgage……………………………………………………………………. 3 025

Additional information (a) On 1 March 2013, the owner deposited an additional R50 000 into the bank account of the

business.

64

ASSIGNMENT 02 (continued) (b) Depreciation on furniture must still be provided for at 20% per annum on the straight-line method.

The furniture was bought on 30 June 2012.

(c) The fixed deposit consists of an investment at Dry Bank at 10% interest per annum, callable at 31 May 2018. The money was invested on 1 June 2012. Interest for the year must still be provided for.

(d) On 1 January 2013, the owner took inventory to the amount of R2 500 (cost price). The transaction was not entered in the accounting records.

(e) On 31 May 2013, the following inventory was at hand:

Trading inventory, R14 500 Packing material, R95

(f) Create an allowance for credit losses of R400.

(g) Included in the amount for insurance is an annual insurance premium amounting to R1 800, which was paid on 1 August 2012.

(h) From 1 January 2012, part of the building was let to an attorney for R400 per month.

(i) The salary of the secretary amounting to R6 000 for May 2013 has not been paid yet.

(j) The mortgage was obtained from XYZ Bank during the previous financial year and bears interest at a rate of 11% per annum, which is payable monthly in arrears. Interest for May 2013 must still be accounted for. On 31 December 2013, an amount of R5 000 is repayable on the mortgage.

9. The balance of capital at 1 June 2012 in the statement of changes in equity for the year ended 31 May 2013 is … .

(1) R174 990 (2) R 50 000 (3) R124 990 (4) R278 950 (5) None of the above.

10. The gross profit in the statement of profit or loss and other comprehensive income for the year ended 31 May 2013 is … .

(1) R61 380 (2) R61 830 (3) R59 330 (4) R56 830 (5) None of the above. 11. The amount for insurance in the statement of profit or loss and other comprehensive income for the year ended 31 May 2013 is … .

(1) R2 000 (2) R1 800 (3) R 200 (4) R1 700 (5) None of the above.

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ASSIGNMENT 02 (continued) 12. The amount for finance costs in the statement of profit or loss and other comprehensive income for the year ended 31 May 2013 is … .

(1) R3 300 (2) R 300 (3) R3 000 (4) R3 025 (5) None of the above. 13. The total comprehensive income for the year in the statement of profit or loss and other comprehensive income for the year ended 31 May 2013 … .

(1) R34 055 (2) R34 480 (3) R31 680 (4) R28 705 (5) None of the above.

14. The total for non-current assets in the statement of financial position as at 31 May 2013 is … .

(1) R195 000 (2) R186 750 (3) R225 000 (4) R216 750 (5) None of the above.

15. The total for trade and other receivables in the statementof financial position as at 31 May 2013 is … .

(1) R5 000 (2) R5 400 (3) R9 200 (4) R9 500 (5) None of the above. 16. The total for non-current liabilities in the statement of financial position as at 31 May 2013 is … .

(1) R30 000 (2) R33 025 (3) R33 300 (4) R25 000 (5) None of the above.

17. The total for current liabilities in the statement of financial position as at 31 May 2013 is … .

(1) R18 575 (2) R13 575 (3) R13 300 (4) R 7 300 (5) None of the above.

66

ASSIGNMENT 02 (continued) Use the following information to answer question 18: The chairman of Far Hill Tennis Club received the following information from the club’s accountant:

(1) Statement of financial position as at 30 June 2013 (extract)

(2) Cashtransactions for the year ended 30 June 2013 (extract) Receipts R Visitors fees….…………………………………………………………………………………..... 3 770 Membership fees..……………………………………………………………………….............. 40 560 Entrance fees.…………………………………………………………………………………...... 3 000 Sales of tennis balls.………………………………………………………………………........... 350 Donations…………………………………………………………………………………………... 1 900

Additional information (a) Membership fees are R240 per member per annum. At 30 June 2013, it was decided that two

members still owing membership fees for the year ended 30 June 2012 should be suspended retrospectively. The amounts owing must be written off as irrecoverable.

(b) During the year ended 30 June 2013, 30 new members were admitted. The management decided to capitalize 50% of the entrance fees received from these new members.

(c) The accrued membership fees for 2012 and 2013 amount to R2 400 and respectively R1 200. 18. The amount that must be transferred from the membership fees account to the income and expenditure account is … .

(1) R40 560 (2) R40 080 (3) R40 800 (4) R38 880 (5) None of the above. Use the following information to answer questions 19 to 21: R R Revenue 946 400 Cost of sales ?

Opening inventory 34 926 Purchases ? Carriage on purchases 915 Closing inventory (56 052)

Gross profit ?

30 June 2013

30 June 2012

R R Non-current liabilities Long-term borrowings….…………………………………………………………. 212 500 225 000

Current liabilities 30 080 21 370 Membership fees received in advance..………………………....................…. 1 680 720 Trade and other payables……………………………………………….............. 15 900 8 150 Current portion of long-term borrowings……...……………………………….... 12 500 12 500

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ASSIGNMENT 02 (continued) Use the following additional information to answer questions 19 to 21: 19. If the net sales for the year ended 28 February 2013 is R946 400, and the entity uses a gross profit mark-up percentage of 20% on cost. What is the gross profit for the year ended 28 February 2013? (1) R 157 733 (2) R1 135 680 (3) R5 678 400 (4) R 189 280 (5) None of the above. 20. Suppose the net sales for the year ended 28 February 2013 is R946 400 after taking sales returns of R2 635 and a settlement discount granted of R965 into consideration. What was the amount for gross sales (ie: before taking the closing transfers into consideration) for the year ended 28 February 2013? (1) R942 800 (2) R948 070 (3) R950 000 (4) R944 730 (5) None of the above. 21. What is the amount for net purchases for the year ended 28 February 2013, if the entity uses a gross profit mark-up percentage of 20% on cost?

(1) R808 878 (2) R788 667 (3) R249 626 (4) R137 522 (5) None of the above. Use the following information to answer questions 22 to 25: Extract from the trial balance of Jumbo Traders for the years ended 30 September 2013 and 30 September 2014

30 September 2014

R

30 September 2013

R Inventory 82 500 77 500 Debtors control 101 500 79 500 Allowance for credit losses 12 500 9 000 Creditors control 60 000 34 000

Additional information (a) Cash received from debtors during the year ended 30 September 2014 amounted to R475 000,

and credit losses of R4 000 had been written off.

(b) Cash payments to creditors during the year ended 30 September 2014 amounted to R280 000.

(c) Jumbo Traders use the periodic inventory system.

68

ASSIGNMENT 02 (continued) 22. The sales amount in the debtors control account will be … .

(1) R475 000 (2) R457 000 (3) R493 000 (4) R501 000 (5) None of the above. 23. The purchases amount in the creditors control account will be … .

(1) R280 000 (2) R306 000 (3) R254 000 (4) R340 000 (5) None of the above. 24. The gross profit amount in the trading account will be … .

(1) R578 500 (2) R583 500 (3) R190 000 (4) R200 000 (5) None of the above. 25. The balance at 30 September 2014 in the inventory account will be … .

(1) R80 000 (2) R77 500 (3) R 2 500 (4) R82 500 (5) None of the above.

END OF ASSIGNMENT 02 FOR SECOND SEMESTER

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20 ANNEXURE G: SELF-ASSESSMENT ASSIGNMENT

FIRST SEMESTER

AND SECOND SEMESTER

COMPREHENSIVE EXERCISE

WITH

SOLUTIONS

70

ANNEXURE G: SELF-ASSESSMENT ASSIGNMENT COMPREHENSIVE EXERCISE WITH SOLUTIONS

This comprehensive exercise covers study units 1 to 17. This exercise covers the following (Please take note of the marksawarded and the times allowed):

Question

Subject

Marks

Time

(minutes)

1

2

3

4

5

6

Asset realisation

Bank reconciliation statement

Adjustment and closing journals and financial statements

Debtors and creditors control accounts

Non-profit organisation

Incomplete records

30

18

96

27

32

20

35

20

115

30

40

25

223

265

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QUESTION 1 (30 marks)(35 minutes)

Extract from the accounting records of SS Supermarket 1. Balances at 1 March 20.1: R

Vehicles at cost............................................................................................................... 28 000 Equipment at cost ........................................................................................................... 2 800 Accumulated depreciation: Vehicles ............................................................................... 14 268 Accumulated depreciation: Equipment ............................................................................ 543

2. The following transactions took place during the year in respect of non-current assets: 2.1 On 31 August 20.1, SS Supermarket sold their delivery vehicle to Mrs Peterson for R7 200 cash.

The proceeds from this sales transaction was used to help finance the purchase of another vehicle from Cape Motors Ltd for R22 000 cash. The cost price of the vehicle sold was R12 000, and its accumulated depreciation amounted to R6 455 on 1 March 20.1.

2.2 On 28 February 20.2, SS Supermarket sold a used printer to Mr Moon for R720 cash. The cost

price of the printer was R900. The accumulated depreciation on this printer amounted to R164 at 1 March 20.1.

3. Depreciation must still be provided for as follows: Vehicles at 20% per annum on the diminishing-balance method

Equipment at 10% per annum on the diminishing-balance method 4. The financial year commences at 1 March. REQUIRED: Prepare the following ledger accounts, properly balanced/closed, for the year ended 28 February 20.2: (a) Vehicles at cost (4) (b) Equipment at cost (3) (c) Accumulated depreciation: Vehicles (8) (d) Accumulated depreciation: Equipment (5) (e) Realisation (4) (f) Depreciation (6)

72

QUESTION 2 (18 marks)(20 minutes)

1. The following information relates to Wise Limited: 1.1 Bank statement for October 20.1

Date

Details

Debit

Credit

Balance

1 2

4

5 10 13

15 18 22 28

29 30

Balance Deposit Cheque 797 Cheque 828 Deposit Cheque 829 Cheque 831 Cheque 830 Cheque 832 Deposit Cheque 834 Deposit Cheque 835 Deposit M Moosa (R/D Cheque) Direct transfer Bank charges

R

250 216

294 740 80 628

278

340

48

12

R 13 242

700

320

547

510

484

1 200

R 13 242 13 942 13 692 13 476 13 796 13 502 12 762 12 682 12 054 12 601 12 323 12 833 12 493 12 977 12 929 14 129 14 117

1.2 Cash receipts journal for October 20.1

Date

Details

Amount

3 14 22 26 29

S Smith (debtor) Cash sales M Mohammed (debtor) Cash sales D de Beer (debtor)

R 320 547 510 484 253

1.3 Cash payments journal for October 20.1 Date

Details

Cheque No

Amount

4 5 6 10

12 17 27 29

Telkom SA (Ltd) P Paxton (creditor) S Nel Ltd B Baloyi (creditor) Computer Sales Ltd J Johnson (creditor) W Wise W Wilson (creditor) S Nel Ltd

828 829 830 831 832 833 834 835 836

R 216 294 80 740 628 153 278 340 58

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QUESTION 2 (continued) 2. Additional information 2.1 Wise Limited reconciled the cash payments journal, cash receipts journal and bank balance on

30 September 20.1, finding the following outstanding:

Cheque number 794 R162 Cheque number 797 R250 Deposit R700

2.2 The bank account balance in the trial balance on 30 September 20.1 was R13 530 (favourable).

2.3 The transfer on 30 October 20.1 to the current bank account was for interest on an investment. REQUIRED: (a) Complete the cash payments journal and cash receipts journal of Wise Limited (including

transactions given) for October 20.1 (8½) (b) Prepare the bank account in the general ledger of Wise Limited, properly balanced at

31 October 20.1 (2½) (c) Prepare the bank reconciliation statement of Wise Limited as at 31 October 20.1 (7)

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QUESTION 3 (96 marks)(115 minutes)

1. The following information relates to Sinamuva Distributors: Pre-adjustment trial balance of Sinamuva Distributors as at 31 December 20.1

Debit

Credit

Capital (01/01/20.1) ................................................................................................. Land and buildings at cost ....................................................................................... Vehicles at cost ....................................................................................................... Equipment at cost .................................................................................................... Accumulated depreciation: Vehicles (1/01/20.1) ...................................................... Accumulated depreciation: Equipment (1/01/20.1) .................................................. Fixed deposit: NBC Bank Ltd ................................................................................... Inventory: Merchandise ........................................................................................... Debtors control ........................................................................................................ Bank ........................................................................................................................ Petty cash ............................................................................................................... Cash float ................................................................................................................ Creditors control ...................................................................................................... Long-term borrowing: Bean Ltd ............................................................................... Allowance for credit losses ...................................................................................... Sales ....................................................................................................................... Cost of sales ........................................................................................................... Sales returns ........................................................................................................... Wages ..................................................................................................................... Salaries ................................................................................................................... Assessment rates .................................................................................................... Settlement discount granted .................................................................................... Licences .................................................................................................................. Vehicle expenses .................................................................................................... Credit losses ........................................................................................................... Packaging materials ................................................................................................ Insurance ................................................................................................................ Water and electricity ................................................................................................ Telephone expenses ............................................................................................... Advertisements ........................................................................................................ Rental income ......................................................................................................... Settlement discount received on merchandise already sold during the year .. Interest on investment ............................................................................................. Credit losses recovered ...........................................................................................

R

263 240 40 000 9 000

50 000 8 500 5 200 3 100

100 500

165 400 1 200 2 000

25 000 1 500

380 1 000 3 500

550 4 700 2 250 2 100 1 400 2 000

R

141 700

11 200 1 710

9 550 25 000

300 381 790

15 600 650

5 000 120

592 620

592 620

2. The following adjustments must still be taken into account: 2.1 Packaging material on hand at 31 December 20.1 to the value of R980.

2.2 The long-term borrowing was entered into on 1 October 20.1. According to the agreement interest is payable bi-annually at a rate of 18% per annum.

2.3 Advertisements includes an amount of R400 paid for January 20.2.

2.4 Rental income includes an amount in respect of January 20.2.

2.5 Interest on the fixed deposit has not yet been received for the last two months of the financial year. Interest is calculated at a rate of 12% per annum.

2.6 Insurance includes an amount of R750 paid for the period 1 November 20.1 to 31 October 20.2.

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QUESTION 3 (continued)

2.7 The telephone account of R165 for December 20.1 has not yet been paid.

2.8 Equipment of R2 000 (cost price) was purchased on 1 July 20.1.

2.9 Provide for depreciation as follows:

Vehicles: 20% per annum on the diminishing-balance method. Equipment: 10% per annum on the diminishing-balance method.

2.10 The account of Loose-Ends Ltd, a debtor who owes the entity R200, must be written off as irrecoverable.

2.11 It was determined that the allowance for credit losses should amount to R250 at 31 December 20.1.

REQUIRED:

(a) Prepare the journal entries to record the adjustments above. (12)

(b) Prepare the closing journal entries. Post these journal entries to the trading and the profit or loss accounts on 31 December 20.1. (34)

(c) Prepare the statement of profit or loss and other comprehensive income of Sinamuva Distributors for the year ended 31 December 20 1. (21)

(d) Prepare the statement of changes in equity for the year ended 31 December 20.1. (4)

(e) Prepare the statement of financial position of Sinamuva Distributors as at 31 December 20.1. (14½)

(f) Prepare the following notes to the financial statements:

(i) Accounting policy,

(ii) Property, plant and equipment. (10½) Your answer must comply with the requirements of International Financial Reporting Standards (IFRS) appropriate to the business of the sole trader.

76

QUESTION 4 (27 marks)(30 minutes)

1. The following information for December 20.1 relates to Smart Boutique: Dr Debtors control Cr

20.1 Dec 1

31

Balance (correct) b/d Bank (total: debtors column) Settlement discount granted Credit sales Drawings Purchases returns (credit purchases)

R

15 670 45 495

685 48 165

150

2 131

20.1

Dec 31

Sales returns (credit sales) Bank (R/D cheques) Credit purchases Cash purchases Settlement discount received Bank (total: creditors column) Balance c/d

R

2 220 425

33 801 1 008

275 3 980

70 587

112 296

112 296

20.2

Jan 1

Balance b/d

70 587

2. Additional information 2.1 An inexperienced bookkeeper prepared the debtors control account.

2.2 In addition to the errors made in the debtors control account above, an investigation revealed the following:

The total list of debtors balances at 31 December 20.1 amounted to R16 060.

An amount of R115, which has been written off as credit losses, has erroneously been added to the credit sales amount of R48 165. This entry has been posted correctly to the applicable account in the debtors ledger.

The sales journal was overcast by R420.

Credit sales of R170 was posted correctly to the sales and debtors control accounts in the general ledger, but was not posted to the personal account of the applicable debtor in the debtors ledger.

Credit note number 003 for R70 was recorded correctly in the sales returns journal but posted to the wrong side of the personal account of the debtor in the debtors ledger.

The debtors column in the cash receipts journal includes an amount of R195 being a cash settlement discount received from a creditor.

The purchases journal was under-cast by R718.

An account of R1 603 for freight on credit sales was received from Quick Transport. No entry has as yet been made.

The R/D cheques of R425 was the cheque of a debtor in payment of his account. The cheque was returned because the debtor had insufficient funds to cover the cheque.

At 1 December 20.1, the balance of the creditors control account amounted to R8 340.

REQUIRED: (a) Prepare the correct, properly balanced debtors and creditors control accounts for Smart Boutique

for December 20.1. (23)

(b) Prepare the reconciliation of the total of the list of debtors balances with the final balance of the debtors control account as calculated in question (a) above. (4)

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QUESTION 5 (32 marks)(40 minutes)

1. The following information pertains to the Sharks Diving Club: Extract from list of balances at 31 March 20.1

Bar purchases ................................................................................................................ Bar inventory - 1 April 20.0 ............................................................................................. Bar sales ........................................................................................................................ Bar wages ...................................................................................................................... Crockery and linen at cost - 1 April 20.0 ......................................................................... Furniture at cost price - 1 April 20.0 ................................................................................ General expenses .......................................................................................................... Diving fees received ....................................................................................................... Equipment at cost ........................................................................................................... Vehicles at cost .............................................................................................................. Accumulated depreciation -1 April 20.0

- Furniture ................................................................................................................... - Equipment ................................................................................................................ - Vehicles ....................................................................................................................

Insurance in arrears - 1 April 20.0 .................................................................................. Maintenance ................................................................................................................... Salaries and wages ........................................................................................................ Stationery consumed ...................................................................................................... Membership fees received ............................................................................................. Membership fees in arrears - 1 April 20.0 ....................................................................... Membership fees prepaid - 1 April 20.0 .......................................................................... Donation received ..........................................................................................................

R 60 000 5 000

100 000 15 000 10 000 30 000 8 200

33 900 24 000 35 000

9 000 4 800 5 000

600 20 100 48 000 6 000

101 000 15 000 20 000

2 000

2. Additional information

2.1 Bar inventory at 31 March 20.1 was R10 000.

2.2 At 31 March 20.1, the crockery and linen were valued at R3 000.

2.3 Furniture with a cost price of R5 000 and accumulated depreciation of R1 500 on 1 April 20.0 was sold for R3 000 on 30 June 20.0. This transaction must still be recorded.

2.4 Provide for depreciation as follows:

Furniture at 10% per annum on the cost price Equipment at 20% per annum on the diminishing balance method Vehicles at 25% per annum on the diminishing balance method.

2.5 Insurance premiums to the amount of R2 600 was paid during the year and debited to the telephone expenses account. This included an amount of R1 000 in prepaid insurance premiums.

2.6 The club had 190 members during the current financial year. Membership fees amounts to R500 per member per annum. All of the members paid their membership fees for the current year. Membership fees in arrears of R7 500 on 1 April 20.0 must be written off as irrecoverable.

2.7 During the current year, 20 new members joined the club. Each member paid their entrance fee of R50. However, the entrance fees received were erroneously included with the amount for membership fees received and recorded as such. According to the constitution of the club, entrance fees must be capitalised. The error must be corrected.

2.8 The salary of the club secretary for March 20.1 of R1 500 is still due and must be provided for.

78

QUESTION 5 (continued) REQUIRED: Prepare the following for Sharks Diving Club:

(a) The membership fees account for the year ended 31 March 20.1, properly balanced. (8)

(b) The income and expenditure statement for the year ended 31 March 20.1. (Show a separate calculation for the gross profit of the bar.) (24)

QUESTION 6 (20 marks)(25 minutes) F Fortune runs a small business from home and does not keep proper accounting records. He needs to calculate his profit or loss for income tax purposes and requests your assistance. You establish the following: 1. Balances at 30 April

20.1

R

20.2

R Furniture at cost (bought on 30 April 20.1).................................................... Tools and equipment at cost (bought on 30 April 20.1) ................................. Inventory: Trading ........................................................................................ Bank (favourable) ......................................................................................... Bank overdraft .............................................................................................. Long-term borrowing .................................................................................... Creditors ...................................................................................................... Income received in advance ......................................................................... Accrued expenses ........................................................................................

12 500 23 250 4 900

- 3 250 7 000 2 600 1 900 800

12 500 23 250 5 100 1 240

- 4 600 3 060 2 500 650

2. Additional information 2.1 F Fortune withdrew R50 000 in cash during the year for personal use.

2.2 Provision still needs to be made for depreciation at 20% per annum on the cost price of furniture and that of tools and equipment.

REQUIRED: (a) Calculate the profit/loss of F Fortune for the year ended 30 April 20.2. (13)

(b) Prepare the statement of financial position of F Fortune as at 30 April 20.2. (7)

FAC1502/101

79

SOLUTIONS TO COMPREHENSIVE EXERCISE QUESTION 1 (30 marks)

SS Supermarket General ledger

(a) Dr Vehicles (at cost) Cr

20.1 Mar 1 20.1

Aug 31

Balance Bank

b/d

R

28 000

22 000

20.1 Aug 31

20.2 Feb 28

Realisation account Balance

c/d

R

12 000

38 000

50 000

50 000

20.2

Mar 1

Balance

b/d

38 000

(4) (b) Dr Equipment (at cost) Cr

20.1 Mar 1

Balance

b/d

R

2 800

20.2 Feb 28

Realisation account Balance

c/d

R

900

1 900

2 800

2 800

20.2

Mar 1

Balance

b/d

1 900

(3) (c) Dr Accumulated depreciation on vehicles Cr

20.1

Aug 31 20.2

Feb 28

Realisation account Balance

c/d

R

7 009,50

11 650,40

20.1 Mar 1

Aug 31 20.2

Feb 28

Balance Depreciation (a) Depreciation (b)

b/d

R

14 268,00

554,50

3 837,40

18 659,90

18 659,90

20.2

Mar 1

Balance

b/d

11 650,40 (8)

80

QUESTION 1 (continued) (d) Dr Accumulated depreciation on equipment Cr

20.2

Feb 28

Realisation account* Balance

c/d

R

237,60 531,10

20.1 Mar 1 20.2

Feb 28

Balance Depreciation (c)

b/d

R

543,00

225,70

768,70

768,70

20.2

Mar 1

Balance

b/d

531,10 *(R164,00 + R73,60) (5) (e) Dr Realisation account Cr

20.1

Aug 31

Vehicles at cost Profit on sale of vehicle

R

12 000,00

2 209,50

20.1 Aug 31

Accumulated depreciation: vehicle Bank

R

7 009,50 7 200,00

14 209,50

14 209,50

20.2

Feb 28 Equipment at cost Profit on sale of equipment

900,00

57,60

20.2

Feb 28 Accumulated depreciation: equipment Bank

237,60 720,00

957,60

957,60

(4) (f) Dr Depreciation Cr

20.1

Aug 31

20.2 Feb 28

Accumulated depreciation: vehicles (a) Accumulated depreciation: vehicles (b) Accumulated depreciation: equipment (c)

R

554,50

3 837,40

225,70

20.2 Feb 28

Profit or loss account

R

4 617,60

4 617,60

4 617,60

(6)

FAC1502/101

81

QUESTION 1 (continued) Calculations (a) Depreciation on vehicle sold (31 August 20.1) Cost Less: Accumulated depreciation

R

12 000,00 6 455,00

Carrying amount at 1 March 20.1

5 545,00

Depreciation for next 6 months (R5 545,00 x 20/100 x 6/12)

554,50

Total accumulated depreciation on vehicle sold (R6 455,00 + R554,50)

7 009,50 (b) Depreciation on vehicles (28 February 20.2)

Existing vehicle

New

vehicle Cost (R28 000 - R12 000) Less: Accumulated depreciation (R14 268 - R6 455)

R

16 000,00 7 813,00

R

22 000,00 -

Carrying amount

8 187,00

22 000,00

Depreciation: current year (R8 187 x 20/100) and (R22 000 x 20/100 x 6/12)

1 637,40

2 200,00 Total (R1 637,40 + R2 200,00) = R 3 837,40 (c) Depreciation on equipment (28 February 20.2)

Existing

equipment

Equipment

sold Cost (R2 800 - R900) Less: Accumulated depreciation (R543 - R164)

R

1 900,00 379,00

R 900,00 164,00

Carrying amount

1 521,00

736,00

Depreciation: current year (R1 521 x 10/100) and (R736 x 10/100)

152,10

73,60 Total (R152,10 + R73,60) = R225,70

NB: The equipment was sold on the last day of the financial year. A proportional calculation of

depreciation is thus unnecessary.

82

QUESTION 2 (18 marks) (a) Wise limited Cash receipts journal (bank column only) - October 20.1 Date

Details

Bank

3 14 22 26 29 30

S Smith/Debtors control Cash sales M Mohammed/Debtors control Cash sales D de Beer/Debtors control Interest income

R

320 547 510 484 253

1 200

3 314

(3) Wise limited

Cash payments journal (bank column only) - October 20.1 Date

Details

Cheque No

Bank

4 5 6 10

12 17 27 29

30

Telkom P Paxton/Creditors control S Nel Ltd B Baloyi/Creditors control Computer Sales Ltd J Johnson/Creditors control W Wise W Wilson/Creditors control S Nel Ltd M Moosa /Debtors control Bank charges

828 829 830 831 832 833 834 835 836

R

216 294 80

740 628 153 278 340 58 48 12

2 847

(51/2) (b) Dr Bank Cr

20.1 Oct 1 31

Balance Total receipts

b/d CRJ

R

13 530 3 314

20.1 Oct 31

Total payments Balance

CPJ c/d

R

2 847

13 997

16 844

16 844

20.1

Nov 1

Balance

b/d

13 997

(2½)

FAC1502/101

83

QUESTION 2 (continued) (c)

Wise limited

Bank reconciliation statement at 31 October 20.1

Debit

Credit

Credit balance (favourable) as per bank statement Outstanding cheques: No 794

No 833 No 836

Outstanding deposit Debit balance (favourable) as per bank account

R

162 153 58

13 997

R 14 117

253

14 370

14 370

(7) QUESTION 3 (96 marks) (a) Sinamuva Distributors

General journal - 31 December 20.1

Fol

Debit

Credit

20.1

Dec 31

Inventory: Packaging material

Packaging material Packaging material on hand at 31 December 20.1

R

980

R

980

Interest on loan

Accrued expenses Interest on loan still payable (a)

1 125

1 125

Prepaid expenses

Advertising Advertising paid in advance

400

400

Rental income

Income received in advance Rent received in advance (b)

1 200

1 200

Accrued income

Interest on investment Interest on investment not yet received (c)

1 000

1 000

Prepaid expenses

Insurance Insurance prepaid (d)

625

625

84

QUESTION 3 (continued)

20.1 Dec 31

Telephone expenses

Accrued expenses Telephone account for December brought into account

R

165

R

165

Depreciation

Accumulated depreciation on vehicles Accumulated depreciation on equipment

Depreciation provided at 20% per annum on the diminishing balance of vehicles and at 10% per annum on the diminishing balance of equipment. (e)

6 389

5 760 629

Credit losses

Loose-Ends/Debtors control Account written off as irrecoverable

200

200

Allowance for credit losses

Credit losses Adjustment of allowance for credit losses (f)

50

50

(12) Calculations (a) Interest on loan R25 000 x 18 x 3 100 12 = R1 125 (b) Rent received in advance R15 600/13* = R1 200

*The rent was received for a full year plus one additional month. (c) Interest on fixed deposit R50 000 x 12 x 2 100 12 = R1 000 (d) Insurance Only November 20.1 and December 20.1 fall in this financial period. Ten months are paid in

advance, therefore R750/12 x 10 = R625.

FAC1502/101

85

QUESTION 3 (continued) (e) Depreciation 1. Vehicles: (R40 000 - R11 200) x 20% = R28 800 x 20 100 = R5 760 2. Equipment: The accumulated depreciation is on the equipment owned by the entity at the beginning of the

financial year. Two calculations are therefore needed: 2.1 [(R9 000 - R2 000) - R1 710] x 10% = R529 2.2 R2 000 x 10 x 6 100 12 = R100 Total depreciation for equipment:

(R529 + R100) = R629 (f) The allowance for credit losses is at present R300 The balance of the allowance must be R250 The current allowance must be reduced by R 50

86

QUESTION 3 (continued) (b) Closing journal entries - December 20.1 Sales Settlement discount granted Closing off and transfer of settlement discount granted to sales

R

380

R

380

Sales Sales return Closing off and transfer of sales returns to sales

1 200

1 200

Sales (R381 790 – R380 – R1 200) Trading Account Closing off and transfer of sales to trading account

380 210 380 210

Settlement discount received Cost of sales Closing off and transfer of settlement discount to cost of sales

650 650

Trading Account Cost of sales (R165 400 – R650) Closing off and transfer of cost of sales account to trading account

164 750 164 750

Trading Account Profit or loss Transfer of gross profit

215 460 215 460

Rental income (R15 600 - R1 200) Interest on investment (R5 000 + R1 000) Credit losses recovered Profit or loss Closing off of above accounts against profit or loss account

14 400 6 000 120

20 520

Profit or loss Wages Salaries Assessment rates Licences Vehicle expenses Credit losses (R550 + R200 - R50) Packaging material (R4 700 - R980) Insurance (R2 250 - R625) Water and electricity Telephone expenses (R1 400 + R165) Advertising (R2 000 - R400) Interest on loan Depreciation Closing off of above accounts against profit or loss account

51 824

2 000 25 000 1 500 1 000 3 500 700 3 720 1 625 2 100 1 565 1 600 1 125 6 389

Profit or loss Capital Transfer of profit to capital account

184 156

184 156

(16)

FAC1502/101

87

QUESTION 3 (continued) Dr Trading account Cr

20.1

Dec 31

Cost of sales (R165 400 - R650) Profit or loss (Gross profit)

R

164 750

215 460

20.1 Dec 31

Sales (R381 790 – R380 – R1 200)

R

380 210

380 210

380 210

(2) Dr Profit or loss account Cr

20.1

Dec 31

Wages Salaries Assessment rates Licence Vehicle expenses Credit losses Packaging material Insurance Water and electricity Telephone expenses Advertising Interest on loan Depreciation Capital (Total comprehensive income for the year)

R

2 000 25 000 1 500 1 000 3 500

700 3 720 1 625 2 100 1 565 1 600 1 125 6 389

184 156

20.1

Dec 31

Trading account (Gross profit) Rental income Interest on investment Credit losses recovered

R

215 460 14 400 6 000

120

235 980

235 980

(16)

88

QUESTION 3 (continued) (c) Sinamuva Distributors Statement of profit or loss and other comprehensive income for the year ended 31 December 20.1 Revenue (R381 410 - R1 200) Cost of sales

R

380 210 (164 750)

Gross profit Other income

215 460 20 520

Rental income Credit losses recovered Interest on investment

14 400 120 6 000

Distribution, administrative and other expenses

235 980

(50 699)

Wages Salaries Assessment rates Licence Vehicle expenses Credit losses Packaging material Insurance Water and electricity Telephone expenses Advertising Depreciation

2 000 25 000 1 500 1 000 3 500 700 3 720 1 625 2 100 1 565 1 600 6 389

Finance charges: Interest on loan

(1 125)

Profit for the year

184 156

Other comprehensive income for the year

-

Total comprehensive income for the year

184 156

(21) (d) Sinamuva Distributors Statement of changes in equity for the year ended 31 December 20.1 Balance at 1 January 20.1 Total comprehensive income for the year

Capital

R 141 700 184 156

Balance at 31 December 20.1

325 856 (4)

FAC1502/101

89

QUESTION 3 (continued) (e)

Sinamuva Distributors Statement of financial position as at 31 December 20.1 ASSETS Note Non-current assets

R

342 941

Property, plant and equipment 2 Financial assets

292 941

50 000

Current assets

19 955

Inventories (R8 500 + R980)

9 480

Trade and other receivables (R5 200 - R200 - R250 + R1 000) Prepayments (R625 + R400)

5 750 1 025

Cash and cash equivalents (R3 100 + R500 + R100)

3 700

TOTAL ASSETS

362 896

EQUITY AND LIABILITIES

Total equity

325 856

Capital

325 856

Non-current liabilities

25 000

Long-term borrowings

25 000

Current liabilities

12 040

Trade and other payables (R9 550 + R1 125 + R165) Income received in advance

10 840 1 200

TOTAL EQUITY AND LIABILITIES

362 896

(14½)

90

QUESTION 3 (continued) (f)

Sinamuva Distributors Notes to the financial statements for the year ended 31 December 20.1 1 Accounting policy: 1.1 The annual financial statements have been prepared on the historical cost basis and comply with

International Financial Reporting Standards (IFRS). 1.2 Property, plant and equipment is shown at cost less accumulated depreciation. Land and buildings

are classified as investment properties and are not depreciated. Depreciation has been provided for as follows:

Vehicles: 20% per annum using the diminishing-balance method Equipment: 10% per annum using the diminishing-balance method

(2) 2 Property, plant and equipment

Land and buildings

Vehicles

Equipment

Total Carrying amount: Beginning of year

R

263 240

R

28 800

R

5 290

R

297 330

Cost Accumulated depreciation

263 240

-

40 000 (11 200)

7 000 (1 710)

310 240 (12 910)

Additions Depreciation for the year

- -

-

(5 760)

2 000 (629)

2 000

(6 389)

Carrying amount: End of year

263 240

23 040

6 661

292 941

Cost Accumulated depreciation

263 240

-

40 000 (16 960)

9 000 (2 339)

312 240 (19 299)

(8½)

[96]

FAC1502/101

91

QUESTION 4 (27 marks) (a)

Smart Boutique General ledger

Dr Debtors control Cr

20.1 Dec 1 31

Balance Bank (R/D cheques) Sales (R48 165 - R115 - R420)

b/d

R

15 670 425

47 630

20.1

Dec 31

Bank (R45 495 - R195) Sales returns Credit losses Balance

c/d

R

45 300 2 220

115 16 090

63 725

63 725

20.2 Jan 1

Balance

b/d

16 090

(13) Dr Creditors control Cr

20.1

Dec 31

Purchases returns Bank Balance

c/d

R

2 131 3 980

38 351

20.1 Dec 1 31

Balance Purchases (R33 801 + R718) Freight on sales

b/d

R

8 340

34 519 1 603

44 462

44 462

20.2 Jan 1

Balance

b/d

38 351 (10)

(b)

Reconciliation: R Total: list of debtors balances 16 060 Add: Sales 170 16 230 Less: Sales returns correction (R70 x 2) 140 Balance debtors control account 16 090

(4)

92

QUESTION 5 (32 marks) (a)

Sharks Diving Club General ledger

Dr Membership fees Cr

20.0

Apr 1 20.1

Mar 31

Accrued income Entrance fees Income and expenditure account (190 x R500) Income received in advance

R

15 000

1 000

95 000 17 500

20.0 Apr 1 20.1

Mar 31

Income received in advance Bank Credit losses

R

20 000

101 000

7 500

128 500

128 500

20.1

Apr 1

Income received in advance

17 500 (8)

*Analysis of membership fees received: Membership fees in arrear at the beginning of the year Membership fees received for the current year (R95 000 - R20 000) Membership fees received in advance at the end of the year

R 7 500

75 000 17 500

100 000

(b)

Sharks Diving Club Income and expenditure statement for the year ended 31 March 20.1 Income

R

160 900

Membership fees Donation received Diving fees received Bar income

95 000 2 000

33 900 30 000

Bar gross profit (a) Bar wages

45 000

(15 000)

Expenditure

(111 040)

General expenses (R8 200 - R2 600) Insurance (R2 600 - R1 000 - R600) Maintenance Salaries and wages (R48 000 + R1 500) Stationery Credit losses Depreciation [(R2 625 + R3 840 + R7 500 + R7 000] (b) Loss on sale of furniture (c)

5 600 1 000

20 100 49 500 6 000 7 500

20 965 375

Surplus for the year

49 860

(24)

FAC1502/101

93

QUESTION 5 (continued) Calculations (a) Bar gross profit Bar sales Cost of sales

R 100 000 (55 000)

Bar inventory - 1 Apr 20.0 Bar purchases

5 000

60 000

Bar inventory - 31 Mar 20.1

65 000

(10 000)

Gross profit

45 000 (b) Depreciation (i) Furniture - 10% per annum on cost price R30 000 - R5 000 = R25 000 R25 000 x 10% = R2 500 R5 000 x 10% x 3/12 = R 125

R2 625 (ii) Equipment - 20% per annum on the diminishing-balance method

(R24 000 - R4 800) = R19 200 x 20% = R3 840 (iii) Vehicles - 25% per annum on the diminishing-balance method

(R35 000 - R5 000) = R30 000 x 25% = R7 500 (iv) Crockery and linen

(R10 000 - R3 000) = R7 000 (c) Loss on sale of furniture

R5 000 - (R1 500 + R125) = R3 375

R3 375 - R3 000 = R375

94

QUESTION 6 (20 marks) (a) Calculation of profit/loss F Fortune Statement of assets and liabilities as at 31 April 20.1 ASSETS

R

Furniture Tools and equipment Inventory

12 500 23 250 4 900

TOTAL ASSETS

40 650 LIABILITIES

Long-term borrowing Creditors Income received in advance Accrued expenses Bank overdraft

7 000 2 600 1 900

800 3 250

TOTAL LIABILITIES

15 550 (5)

Calculation of equity at the beginning of the period Equity = Assets – Liabilities = R40 650 – R15 550 = R25 100 F Fortune Statement of assets and liabilities as at 31 April 20.2 ASSETS

R

Furniture Tools and equipment Inventory Bank

12 500 23 250 5 100 1 240

TOTAL ASSETS

42 090 LIABILITIES

Long-term borrowing Creditors Income received in advance Accrued expenses

4 600 3 060 2 500

650 TOTAL LIABILITIES

10 810

(5) Calculation of equity at the beginning of the period Equity = Assets – Liabilities = R42 090 – R10 810 = R31 280

FAC1502/101

95

QUESTION 6 (continued) Estimated profit/loss: Capital at the end of the financial period Capital at the beginning of the period

R 31 280

(25 100)

Drawings Adjustments: Depreciation

6 180

50 000 (7 150)

Furniture (R12 500 x 20%) Tools and fittings (R23 250 x 20%)

2 500 4 650

Estimated profit for the year

49 030

(3) (b)

F Fortune Statement of financial position as at 30 April 20.2 ASSETS Note Non-current assets

R 28 600

Property, plant and equipment

28 600

Current assets

6 340

Inventory Cash and cash equivalents

5 100 1 240

TOTAL ASSETS

34 940

EQUITY AND LIABILITIES

Total equity

24 130

Capital (25 100 + 49 030 – 50 000) or (R31 280 – R7 150)

24 130

Non-current liabilities

4 600

Long-term borrowings

4 600

Current liabilities

6 210

Trade and other payables (3 060 + 650) Income received in advance (2 500)

3 710 2 500

TOTAL EQUITY AND LIABILITIES

34 940

(7)

96

QUESTION 6 (continued) F Fortune Notes to the financial statements for the year ended 30 April 20.2 1 Property, plant and equipment

Furniture

Tools and Equipment

Total Carrying amount: Beginning of year

R

12 500

R

23 250

R

35 750

Cost Accumulated depreciation

12 500 -

23 250 -

35 750 -

Additions Depreciation for the year

- (2 500)

- (4 650)

- (7 150)

Carrying amount: End of year

10 000

18 600

28 600

Cost Accumulated depreciation

12 500 (2 500)

23 250 (4 650)

35 750 (7 150)

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