INf2611 2014May/June Exam paper

FAC1601/101/3/2014

Tutorial letter 101/3/2014

Financial Accounting Reporting

FAC1601

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 AND WELCOME .............................................................................................. 3

2 PURPOSE AND OUTCOMES OF THE MODULE ........................................................................ 3

3 COMMUNICATION WITH YOUR LECTURERS ........................................................................... 4

4 COMMUNICATION WITH THE UNIVERSITY ............................................................................... 4

5 STUDY MATERIAL ...................................................................................................................... 4

5.1 Inventory letter ............................................................................................................................ 4

5.2 Study material ............................................................................................................................. 5

6 STUDENT SUPPORT SERVICES ................................................................................................ 5

6.1 Contact with fellow students ...................................................................................................... 5

6.1.1 Study groups ............................................................................................................................... 5

6.1.2 myUNISA ..................................................................................................................................... 5

6.2 Tutor assistance ......................................................................................................................... 6

7 ASSESSMENT ............................................................................................................................. 8

7.1 Assignments and learning ......................................................................................................... 8

7.2 General remarks .......................................................................................................................... 8

7.3 Feedback on assignments ......................................................................................................... 9

7.4 Study process ............................................................................................................................. 9

7.5 Important aspects regarding assignments ............................................................................. 11

7.6 Finality of the due dates ........................................................................................................... 11

7.7 Assessment of assignments .................................................................................................... 11

8 EXAMINATION ........................................................................................................................... 11

8.1 Examination admission ............................................................................................................ 11

8.2 Year mark and final examination mark .................................................................................... 12

8.3 Examination period ................................................................................................................... 13

8.4 Examination paper .................................................................................................................... 13

8.5 Previous examination papers................................................................................................... 13

8.6 Tutorial letter with information on the examination ............................................................... 13

9 PROPOSED STUDY PROGRAMME FOR 2014 ......................................................................... 14

9.1 First semester ........................................................................................................................... 14

9.2 Second semester ...................................................................................................................... 14

10 ANNEXURES

ANNEXURE A Assignment 01 (compulsory) first semester .......................................................... 15

ANNEXURE B Assignment 02 (compulsory) first semester .......................................................... 21

ANNEXURE C Assignment 01 (compulsory) second semester ..................................................... 28

ANNEXURE D Assignment 02 (compulsory) second semester ..................................................... 36

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1. INTRODUCTION AND WELCOME We are pleased to welcome you to this module and hope that you will find it both interesting and rewarding. We will 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 year. A tutorial letter is our way of communicating with you about teaching, learning and assessment. This tutorial letter 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, preparing the assignments, preparing for the examination and addressing questions to your lecturers. Please read Tutorial Letter 301 in combination with this tutorial letter as it gives you an idea of generally important information when studying at a distance and within a particular College. In this tutorial letter, you will find the assignments and assessment criteria as well as instructions on the preparation and submission of the assignments. It also provides all the information you need with regard to the prescribed study material and other resources and how to obtain them. Please study this information carefully and make sure that you obtain the prescribed material as soon as possible. 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. You will also find useful information of a general nature in Tutorial Letter 301 and in the booklet mySTUDIES@Unisa. Having read through these, you should be well prepared to begin. We hope that you will enjoy this module and wish you all the best! 2. PURPOSE AND OUTCOMES OF THE MODULE The purpose of this module is to introduce students to financial accounting and reporting referring to some of the International Accounting Standards issued by the International Accounting Standards Board. In this course the focus of financial reporting and the analysis of financial statements are on partnerships and close corporations. You must also be able to record the accounting entries for the formation of, admittance to, retirement or death of a partner and the liquidation of partnerships. Further, you must be able to record the accounting entries to the capital structure of companies, be able to record the transactions relating to businesses with branches. Lastly, you must be able to prepare calculations relating to the time value of money.

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3. COMMUNICATION WITH YOUR LECTURERS The lecturers responsible for this module: Mr MT Hlongoane Mrs FM Osman Mr A Eysele Mr J van Staden Mrs B Ntoyanto-Ceki

Module Telephone Number: 012 429 4176 Module E-mail Address: [email protected] All queries that are not of a purely administrative nature but are about the content of this module should be directed to us. Please have your study material with you when you contact us. Email and telephone numbers are included above but you might also want to write to us. Letters should be sent to: The module leader (FAC1601) Department of Financial Accounting PO Box 392 UNISA 0003 NB: Letters to lecturers may not be enclosed with or inserted into assignments. 4. COMMUNICATION WITH THE UNIVERSITY If you need to contact the university about matters not related to the content of this module, please consult the publication mySTUDIES@Unisa, which you received with your study material. This brochure contains information on how to contact the university (e.g. to whom you can write for different queries, important telephone and fax numbers, addresses and details of the times certain facilities are open). 5. STUDY MATERIAL 5.1 Inventory letter You should have received an inventory letter telling you what you have received in your study package and also showing items that are still outstanding. Also see the brochure entitled mySTUDIES@Unisa. Check the study material that you have received against the inventory letter. You should have received all the items listed in the letter, unless there is a statement like out of stock or not available. If any item is missing, follow the instructions on the back of the inventory letter without delay.

PLEASE NOTE

Your lecturers cannot help you with missing study material. For enquiries about your study material, please contact the UNISA dispatch department by sending an sms to 43579 or by e-mail at [email protected].

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5.2 Study material The department of despatch should supply you with the following study material for this module:

One study guide

Tutorial Letters 101 and 301 at registration and others later

Apart from Tutorial Letters 101 and 301, you will also receive other tutorial letters during the semester. These tutorial letters will not necessarily be available at the time of registration, but will be despatched to you as soon as they are available or needed (for instance, for feedback on assignments). If you have access to the internet, you can view the study guides and tutorial letters for the modules for which you are registered on the universitys online campus, myUnisa, at http://myunisa.ac.za.

Prescribed textbook Your prescribed textbook for this module is: About Financial Accounting, Volume 2, 4th Edition by Berry PR, et al. LexisNexisButterworths. Durban. 2011.

Please consult the list of official booksellers and their addresses listed in mySTUDIES@Unisa. If you have any difficulty obtaining books from these bookshops, please contact the Prescribed Books Section. 6. STUDENT SUPPORT SERVICES For information on the various student support systems and services available at Unisa (e.g. student counselling, tutorial classes, language support), please consult the publication mySTUDIES@Unisa, which you received with your study material. 6.1 Contact with fellow students 6.1.1 Study groups It is advisable to have contact with fellow students. One way to do this is to form study groups. The addresses of students in your area may be obtained from the following department: Directorate: Student Administration and Registration PO Box 392 UNISA 0003 6.1.2 myUNISA If you have access to a computer that is linked to the internet, you can quickly access resources and information at the university. The myUnisa learning management system is Unisa's online campus that will help you to communicate with your lecturers, with other students and with the administrative departments of Unisa all through the computer and the internet. To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the Login to myUnisa link on the right-hand side of the screen. This should take you to the myUnisa website. You can also go there directly by typing http://my.unisa.ac.za. Please consult the publication mySTUDIES@Unisa, which you received with your study material, for more information on myUnisa.

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6.2 Tutor assistance Students are also provided with tutorial services at various learning centres. For more information, please contact the learning centre situated next to you.

Students who are interested in tutor assistance can obtain the telephone numbers and details from the learning centres.

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

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

(031) 335 8110/11/27/30/31

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Tutorial Services Office Room1B5, Ground floor 230 Stalwart Simelane(Stanger) Street Durban, 4001

(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

(031) 335 8127 (034) 326 3105

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

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

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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

7. ASSESSMENT 7.1 Assignments and learning Assignments are seen as part of the learning process for this module. As you do the assignment, study the reading text, consult other resources, discuss the work with fellow students or tutors or do research, you are actively engaged in learning. Looking at the assessment criteria given for each assignment will help you to understand what is required of you more clearly. 7.2 General remarks Enquiries about assignments (e.g. whether or not the university has received your assignment or the date on which an assignment was returned to you) must be directed to the assignments department. This department can be reached by sending an SMS to 43584 or by e-mail at [email protected]. You might also find information on myUNISA. To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the login to myUnisa link under the myUnisa heading on the screen. This should take you to the myUnisa website. You can also go there directly by typing http://my.unisa.ac.za. Assignments should be addressed to: The Registrar (Assignments)

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PO Box 392 UNISA 0003 You may submit written assignments and assignments done on mark-reading sheets either by post or electronically via myUNISA. Assignments may not be submitted by fax or email. For detailed information and requirements as far as assignments are concerned, see the brochure mySTUDIES@Unisa, which you received with your study material. To submit an assignment through myUNISA:

Go to myUnisa.

Log in with your student number and password.

Select the module.

Click on assignments in the menu on the left.

Click on the assignment number you want to submit.

Follow the instructions on the screen. 7.3 Feedback on assignments You will receive the correct answers automatically for multiple-choice questions. Feedback on compulsory assignments will be sent to all students registered for this module in a follow-up tutorial letter, and not only to those students who submitted the assignments. The tutorial letter number will be 201, 202, etc. As soon as you have received the feedback, please work through it. The assignments and the feedback on these assignments constitute an important part of your learning and should help you to be better prepared for the next assignment and the examination. 7.4 Study process You may encounter fewer problems when you work as follows: Paragraph 8 of this tutorial letter sets out the suggested study programme for semester 1 and 2. First semester students: refer to paragraph 8.1 and second semester students: refer to paragraph 8.2.

Study the relevant study units of the Study Guide for assignment 01. Do all the exercises in the study guide and make sure that you understand the contents of the study material.

Do assignment 01 and send it to UNISA for marking. Remember, the submission of assignment 01 is compulsory for examination admission and contributes to your year mark (refer to paragraph 6).

Study the relevant study units of the Study Guide for assignment 02 and do the assignment. Remember, the submission of assignment 02 is compulsory and contributes to your year mark (refer to paragraph 6).

After completing an assignment, carry on with the study programme. Do not wait for the suggested solution or for the return of the marked assignment.

Students often fail to plan their studies properly in order to achieve specific study goals at predetermined dates. This leads to a haphazard approach to studying and the use of ineffective study techniques. The study programme for each semester is herein provided to assist you in this regard. The programme indicates the dates during which certain sections of the study material should be studied, as well as the dates by which the compulsory assignments should be completed. The study programme is based on the following assumptions:

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That study will commence on either 13 January 2014 for the first semester or 30 June 2014 for the second semester and that the course should be completed leaving sufficient time for revision.

That you should study at least 6 hours per week. We are of the opinion that this is within your reach.

We are convinced that, if you adhere to the suggested programme, you should be able to master the subject. It is very important that the subject matter covered in the study units should be mastered and not just be skimmed. If you happen to register late or fall behind with this programme, extra effort on your part will be necessary. Appendix A and B contains the compulsory assignment 01 and 02 for students who are registered for FAC1601 in the first semester. Appendix C and D contains the compulsory assignment 01 and 02 for students who are registered for FAC1601 in the second semester. Please note that these assignments are not the same. You must ensure that you submit the assignments which pertain to the semester that you are registered in for FAC1601.

IF YOU ARE REGISTERED FOR FAC1601 IN THE SECOND SEMESTER YOU CANNOT SUBMIT ANY ASSIGNMENTS DURING THE FIRST SEMESTER. ASSIGNMENTS INCORRECTLY SUBMITTED WILL RETURNED UNMARKED

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7.5 Important aspects regarding assignments There are 4 assignments for this module:

Assignment 01 is a multiple choice assignment that is compulsory and contributes 50% towards your year mark. It is important to note that if you do not submit this assignment you will not be admitted to the examination;

Assignment 02 is a multiple choice assignment that is also compulsory, and contributes 50% towards your year mark;

Assignments 03 and 04 are long question assignments. These assignments must NOT be submitted to UNISA for marking but forms an important part of your study material and exam questions will definitely be set on these sections.

Please keep copies of assignments submitted through myUnisa as this is proof that you submitted the assignment. Assignments constitute an integral part of the tutorial matter. Study material on which assignments are based is given in Annexure A (for students registered for the first semester) or Annexure C (for students registered for the second semester). Assignments and tutorial letters must also be studied for examination purposes. 7.6 Finality of the due dates The receipt of assignments after the due date disrupts our marking programme and the uncontrolled submission of assignments creates administrative problems. No extension will be granted for the submission of assignments and regrettably requests for the extension of the due date will NOT be considered. 7.7 Assessment of assignments Although students may work together when preparing assignments, each student must submit his or her own individual assignment. It is unacceptable for students to discuss the answers on myUnisa. That is copying (a form of plagiarism) and you may be penalised or subjected to disciplinary proceedings by the university. 8. EXAMINATIONS For general information and requirements as far as assignments are concerned, see the brochure mySTUDIES@Unisa, which you received with your study material. 8.1 Examination admission For students to fully benefit from our formative tuition and assessment, the Management of the university has taken a decision to introduce two compulsory assignments in all modules to be submitted by set due dates. Submission of the first compulsory assignment by its due date will give a student admission to the examination in the particular module and the mark obtained for that assignment will contribute towards the final mark for that module. The second assignment is also compulsory and contributes equally to the final mark. Please ensure that the compulsory assignments reaches the University before the due date as late submission of assignment 01 will result in you not being admitted to the examination.

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8.2 Year-mark and final examination mark The year-mark contribution towards the final examination mark is calculated as follows: 50% of the mark obtained for assignment 01 Plus 50% of the mark obtained for assignment 02 If you only submit assignment 01, your year mark will be 50% of the mark obtained for this assignment. This will then be your year mark out of a possible 100%. If, for example, you obtain 80% for assignment 01 and 0% for assignment 02, your year mark will be 40%. According to university policy you require a sub-minimum of 40% in the examination before your year mark is taken into consideration. In other words, if you do not obtain at least 40% in the examination, you will automatically fail, and your final mark will be the mark you obtained in the examination. A final mark of 50% is required to pass this module. This final mark is calculated as follows: (10% x of the year mark) + (90% x mark obtained in the examination) Example:

A B C D

Average of marks for assignment

1 & 2 (Year mark)

Year mark contribution to

final mark at 10%

Exam mark contribution

required to pass (50% minus year mark

contribution)

Minimum exam mark required to

pass

(C 0,9)

Student 1 100% 10% 40% 45%

Student 2 70% 7% 43% 48%

Student 3 50% 5% 45% 50%

Student 4 30% 3% 47% 52%

Student 5 20% 2% 48% 53%

Student 6 10% 1% 49% 54%

Student 7 0% 0% 50% 56%

If you obtain between 40% and 49% as a final mark, you will be allowed to write a supplementary examination. The supplementary examination will be written at the end of the next semester. This means that if you qualify for a supplementary examination in May/June, you will write the FAC1601 paper in October/November. Similarly, students who qualify for a supplementary examination in October/November will write this paper in May/June of the following year. A student may, however, write only one supplementary examination per enrolment. If, for any reason, you transfer your exam period for FAC1601 to a following semester, you need to submit Assignment 01 and 02 before the due date in the semester for which you originally registered for the course. The year mark you obtain will then be carried forward to the next semester because you will not be allowed to submit any assignments in the semester to which you have changed. By applying to have your semester changed to a following semester, in effect, you are applying for an aegrotat examination. However, you still need a year mark that will be taken into account as explained above hence the need to submit the compulsory assignments in the semester for which you originally registered.

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8.3 Examination period This module is offered in a semester period of 15 weeks. This means that if you are registered for the first semester, you will write the examination in May/June 2014 and the supplementary examination will be written in October/November 2014. If you are registered for the second semester, you will write the examination in October/November 2014 and the supplementary examination will be written in May/June 2015. During the semester, the Examination Section will provide you with information regarding the examination in general, examination venues, examination dates and examination times. This information can also be obtained from the myUnisa site. Click on Examinations when you are logged into the site. 8.4 Examination paper At the end of the semester you will be required to write a two hour examination paper. No theoretical or multiple choice questions will be asked. You will only be required to apply the theoretical knowledge acquired in the questions asked. Exam questions are set on the content of the whole course not only on assignments 1 and 2. You are advised to consult the examination time-table timeously in order to plan your revision programme accordingly. Please start early to avoid cramming at the last moment. 8.5 Previous examination papers There will be no previous years examination papers to be made available to students as part of tutorial or study material. However, additional questions will be provided in a form of a tutorial letter. These questions will be of same standard with the examination questions. We advise you, however, not to focus only on these questions as your only source in your preparation for the examination as the content of examination paper changes from year to year. You may, however, accept that the type of questions that will be asked in the examination will be similar to those asked in the activities in your study guide and in the assignments. 8.6 Tutorial letter with information on the examination To help you in your preparation for the examination, you will receive a tutorial letter that will explain the format of the examination paper and set out what and how to study for examination purposes.

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9. PROPOSED STUDY PROGRAMME FOR 2014 9.1 First semester

DATE STUDY MATERIAL AND ASSIGNMENTS

13/1 to 13/2 Study: Study units 1 to 5

14/2 to 17/2 Do Assignment 01 (compulsory assignment): Due date 14/03/2014

17/2 Submit Assignment 01 (NB: DO NOT WAIT UNTIL 14/03/2014)




31/3 to 04/4 Do and mark Assignment 03 (do not submit this assignment)


The solutions to Assignments 03 and 04 are provided in the same tutorial letter

14/4 to examination Revision

During May/June 2014: EXAMINATION

9.2 Second semester

DATE STUDY MATERIAL AND ASSIGNMENTS









The solutions to Assignments 03 and 04 are provided in the same tutorial letter

15/9 to examination Revision

During October/November 2014: EXAMINATION

We hope that you will enjoy this module and we wish you success with your studies. Kind regards Mr M Hlongoane Mrs FM Osman Mr A Eysele Mr J van Staden Mrs B Ntoyanto-Ceki LECTURERS: FINANCIAL ACCOUNTING REPORTING (FAC1601)

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ANNEXURE A COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (FIRST SEMESTER 2014)

UNIQUE NO: 856974 DUE DATE: 14 MARCH 2014 1. This assignment must be answered on a mark-reading sheet if submitted by post. It can also

be submitted electronically through myUnisa. 2. Before answering this assignment, please read paragraphs 7 and 8 of this tutorial letter. 3. This assignment covers study units 1 4 of the study guide. 4. We cannot grant any extension for the late submission of this assignment since the due

date is set in accordance with the marking date of this assignment. Regrettably, no correspondence or telephone conversations will be conducted in this regard.

5. Important aspects regarding multiple-choice assignments answered on a mark-reading

sheet

For detailed information and requirements as far as assignments are concerned, see mySTUDIES@Unisa which you received with your study package.

Work carefully through the relevant tutorial matter before you do the assignment.

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

REMEMBER:

There is only one correct answer for each question. Do not make more than one mark per question.

All questions are equal in value.

Indicate your student number correctly.

Indicate the assignment number correctly.

Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 first semester.

FOR HARD COPY SUBMISSION:

Only the provided mark-reading sheets may be used.

Colour in the correct block clearly with a HB pencil.

Do not colour outside the block, or colour in the block with a pen.

Do not make corrections with correction fluid.

Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with sticky tape use another one.

Do not staple the mark-reading sheet to another piece of paper.

Do not submit answers on a written sheet of paper.

Send only your mark-reading sheet to the Assignments Division in the appropriate envelope.

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ASSIGNMENT 01 FIRST SEMESTER (continued) Question 1 According to the Conceptual Framework (4.59), which one of the following does not form part of concepts of capital maintenance? a) Accrual basis capital maintenance b) Financial capital maintenance c) Physical capital maintenance 1. a) only 2. a) and b) only 3. a) and c) only 4. b) and c) only 5. None of the above Given information for questions 2 4 Zak and Adam decided to start a business, trading as Soccer Fanatics. The following information pertains to the business activities of the partnership for the year ended 30 June 2013: 1. Trial balance as at 30 June 2013

R Capital: Zak ............................................................................................................................. 187 500 Capital: Adam .......................................................................................................................... 187 500 Current Account: Zak (Cr; 1 July 2012) .................................................................................... 13 875 Current Account: Adam (Dr; 1 July 2012) ................................................................................ 10 875 Drawings: Zak.......................................................................................................................... 89 375 Drawings: Adam ..................................................................................................................... 109 125 Asset replacement reserve ..................................................................................................... 56 250 Mortgage ................................................................................................................................. 187 500 Long-term loan: Zak ................................................................................................................ 50 000 Creditors control ...................................................................................................................... 37 500 Bank (Cr) ................................................................................................................................. 16 875 Land and buildings at cost ....................................................................................................... 775 000 Equipment at cost .................................................................................................................... 107 500 Vehicles at cost ....................................................................................................................... 123 125 Accumulated depreciation: Equipment ..................................................................................... 32 375 Accumulated depreciation: Vehicles ........................................................................................ 62 500 Inventory .................................................................................................................................. 12 500 Debtors control ........................................................................................................................ 27 500 Allowance for credit losses ...................................................................................................... 21 875 Petty cash ................................................................................................................................ 625 Profit for the year (before additional information) ..................................................................... 421 563 2. Terms of the partnership agreement: 2.1 Interest is calculated at 10% per annum on the opening balances of the partners capital and

current accounts 2.2 Both partners are entitled to a salary of R87 500 per annum 3. Additional information: 3.1 The long-term loan from Premier Bank was acquired on 1 July 2012 and bears interest at a

rate of 10% per annum, payable on at the end of July every year. The loan is secured by a first

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ASSIGNMENT 01 - FIRST SEMESTER (continued)

mortgage over land and buildings and is repayable in equal instalments over 10 years. The first repayment is due on 2 July 2013.

3.2 Zak granted an unsecured loan to the partnership on 1 May 2013. According to the terms of

the loan agreement, interest at 15% per annum will be charged and is payable in December of every year. The total amount of the loan will be repaid in full on 30 April 2016.

3.3 On 30 June 2013, a cheque was made out to Incredible Computers Ltd for R15 000. This

payment was for the rental of a server from 1 July 2013 to 30 June 2014. The transaction must still be recorded in the books of the entity.

3.4 During the year each partner received R68 750 as a salary and these amounts were debited to

salaries and wages of the partnership Question 2 Which one of the following alternatives represents the amount of the total comprehensive income available for distribution to the partners for the year ended 30 June 2013? 1. R326 563 2. R327 513 3. R326 263 4. R363 763 5. None of the above Question 3 Which one of the following amounts represents the long term borrowings balance disclosed in the statement of financial position of Soccer Fanatics as at 30 June 2013? 1. R218 750 2. R237 500 3. R168 750 4. R230 750 5. None of the above Question 4 Which one of the following amounts represents the trade and other payables balance disclosed in the statement of financial position of Soccer Fanatics as at 30 June 2013? 1. R38 750 2. R57 500 3. R37 500 4. R43 750 5. None of the above

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ASSIGNMENT 01 - FIRST SEMESTER (continued)

Question 5

On 2 November 2012 Sedisa Trading CC purchased 11 000 preference shares for a consideration of R33 000 from Mashabane Ltd. Mashabane Ltd was listed on the Johannesburg Securities Exchange (JSE) since 1 April 2011. Sedisa Trading CC purchased these shares to earn short term profits. Brokerage fee of R3 000 was paid by Sedisa Trading CC. On 31 October 2013, the market value of these shares was established on JSE to be R29 730.

Which one of the following amounts will be disclosed as other financial assets in the statement of financial position of Sedisa Trading CC as at 31 October 2013?

1. R 3 270 2. R36 000 3. R32 730 4. R29 730 5. None of the above

Question 6

On 1 January 2013 Andre, Jacques and Moses formed a partnership, each contributing R62 500 as capital. The financial year of the partnership ends on 31 December. On 1 July 2013 Andre contributed a further R31 250 as capital and Jacques withdrew R12 500 of his capital. Moses decided to contribute a vehicle with a value of R25 000 to the partnership on 1 January 2014 as additional capital. Interest is calculated at 8% per annum on a monthly basis, and is not capitalised.

What was the total interest expense for the partnership in respect of capital for the financial year ended 31 December 2013?

1. R15 000 2. R19 000 3. R15 750 4. R16 500 5. None of the above

Given information for questions 7 9:

Margaret and her neighbor, Dorris, are in a partnership, trading as Simply Delicious Catering; they share in the profits/losses of the partnership in the ratio of 3:2 respectively. Recently they signed a catering contract with the local municipality. They urgently needed somebody to join the partnership who could assist with the preparation of the food and who could provide capital to help sustain the growth of the business. Mary, another friend of Margaret, offered to join the partnership.

On 31 December 2013 the following list of balances was prepared for Simply Delicious Catering: R

Capital: Margaret ..................................................................................................................... 181 050 Capital: Dorris .......................................................................................................................... 123 000 Current account: Margaret (Cr) ................................................................................................ 18 750 Current account: Dorris (Dr) ..................................................................................................... 24 300 Asset replacement reserve ...................................................................................................... 37 500 Vehicle at carrying amount ...................................................................................................... 90 000 Equipment at carrying amount ................................................................................................. 14 250 Furniture and fittings at carrying amount .................................................................................. 210 000 Creditors control ...................................................................................................................... 32 800 Inventory .................................................................................................................................. 25 950 Debtors control (trade debtors) ................................................................................................ 9 750 Bank (Overdraft) ...................................................................................................................... 13 162 Allowance for credit losses ...................................................................................................... 788

FAC1601/101

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ASSIGNMENT 01 - FIRST SEMESTER (continued) Additional information: 1. It was agreed that Mary will join the partnership on 1 January 2014 and that the new

partnership will trade as Simply Scrumptious Catering. Mary will acquire a third share in the profits/losses of the new partnership. Margaret and Dorris will relinquish a third share to Mary according to their existing profit-sharing ratio. On 1 January 2014, Mary will contribute a vehicle with a value of R150 000 as well as cash to the amount of R112 500 for her third share in the net assets of the new partnership.

2. In preparation of the change in the ownership structure of Simply Delicious Catering, Margret

and Dorris decided to record the following valuations: R

Vehicle ........................................................................................................................... 67 500 Equipment ...................................................................................................................... 6 000 Furniture and fittings ....................................................................................................... 333 150 Inventory ........................................................................................................................ 23 250

The allowance for credit losses must be adjusted to 5% of the trade debtors.

Creditors offered an 8% discount for payments made on or before 31 January 2014. Simply Delicious Catering will settle 60% of its creditors on 15 January 2014 and 20% on 30 January 2014.

Question 7 Which one of the following alternatives represents the balance in the valuation account in the general ledger of Simply Delicious Catering on 31 December 2013? (All amounts should be rounded up to the nearest rand) 1. R98 250 2. R90 000 3. R92 700 4. R92 099 5. None of the above Question 8 Which one of the following alternatives represents the balance transferred to the capital account of Dorris as a result of the revaluation of the partnerships assets and liabilities on 31 December 2013? (All amounts should be rounded up to the nearest rand) 1. R35 880 2. R37 080 3. R36 000 4. R36 840 5. None of the above Question 9 Which one of the following alternatives represents the goodwill of Simply Delicious Catering as at 31 December 2013? (All amounts should be rounded up to the nearest rand) 1. R99 000 2. R136 500 3. R94 502 4. R96 901

20

ASSIGNMENT 01 - FIRST SEMESTER (continued) 5. None of the above Question 10 Nadal, Federer and Jokovich were in a partnership which traded as Grand Slam Traders, and they shared in the profits and losses of the partnership in the ratio of 1:2:1 respectively. They decided to liquidate the partnership piecemeal as from 2 January 2013. The following information pertains to the partnership: GRAND SLAM TRADERS TRIAL BALANCE AS AT 31 DECEMBER 2012

Debit R

Credit R

Capital: Nadal 10 000 Capital: Federer 20 000 Capital: Jokovich 10 000 Creditors control 18 000 Vehicle at cost 20 000 Accumulated depreciation: Vehicle 12 000 Debtors control (trade debtors) 26 000 Inventory 24 000 70 000 70 000 The partners decided that Federer can take over the vehicle on 2 January 2013 at its carrying amount. His capital account must be debited accordingly. As soon as sufficient cash becomes available, interim repayments must be made to the partners in such a manner that no partner will have to make any repayments thereof to the partnership. The inventory and trade debtors were realised as follows:

Date Carrying amount Cash proceeds Expenses 31 January 2013 R24 000 (Inventory) R22 000 - 15 February 2013 R26 000 (Debtors control) R23 000 R440

On 1 February 2013 the creditors were paid in full. Which alternative shows the correct amounts that must be repaid to the partners as interim repayments on 1 February 2013? 1. Nadal: R1 780; Federer: R0; Jokovich: R1 780 2. Nadal: R2 000; Federer: R0; Jokovich: R2 000 3. Nadal: R5 500; Federer: R11 000; Jokovich: R5 500 4. Nadal: R1 000; Federer: R2 000; Jokovich: R1000 5. None of the above

END OF ASSIGNMENT 01 FIRST SEMESTER

FAC1601/101

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ANNEXURE B COMPULSORY ASSIGNMENT

ASSIGNMENT 02: (FIRST SEMESTER 2014)

UNIQUE NO: 856365 DUE DATE: 11 APRIL 2014 1. This assignment must be answered on a mark-reading sheet if submitted by post. It can also




sheet




REMEMBER:





Indicate the unique assignment number for Assignment 02 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 02 for FAC1601 first semester.










22

ASSIGNMENT 02 FIRST SEMESTER (continued) Given information for questions 1 to 2: Julia and Lydia are the only members of Travel Easy CC. They have an equal interest in the corporation and distribute profits accordingly. The following information is extracted from the accounting records of the CC as at 28 February 2014, the financial year-end of the corporation.

R Members contribution: Julia .................................................................................................... 80 000 Members contribution: Lydia ................................................................................................... 60 000 Retained earnings (1 March 2013) ........................................................................................... 285 817 Loan from member: Julia (1 March 2013) ................................................................................ 46 900 Loan to member: Lydia ............................................................................................................ 35 250 Inventory ( 1 March 2013) ....................................................................................................... 33 006 Debtors control ........................................................................................................................ 45 900 Creditors control ...................................................................................................................... 252 050 Bank (Dr) ................................................................................................................................. 36 200 Sales ....................................................................................................................................... 552 262 Investment (Lion Ltd) ............................................................................................................... 130 000 Interim profit distribution paid to members ............................................................................... 40 000 Income received in advance .................................................................................................... 7 330 Prepaid expenses .................................................................................................................... 5 500 Rental income.......................................................................................................................... 36 650 Purchases ............................................................................................................................... Carriage on purchases ............................................................................................................

300 090 9 450

Administrative, distribution and other expenses ....................................................................... 57 900 Settlement discount on sales ................................................................................................... 5 700 SARS (Income tax) (Dr) ........................................................................................................... 36 348

Additional information: 1. The costs for carriage on purchases were not paid at year end. The closing inventory

amounted to R40 500. 2. The investment in Lion Ltd consist of 80 000 shares bought for R130 000 and was acquired in

February 2012. The investment was acquired for trade purposes, on 15 February 2014 Lion Ltd declared a dividend of 20 cents per share payable on April 2014. On 28 February 2014 the fair value of the investment amounted to R170 000.

3. Each member received a monthly salary of R4 500 paid in cash. Lydia the managing member

of Travel CC is entitled to a bonus of R10 000 payable in March 2014. These transactions were not recorded in the books of the close corporation.

4. The actual income tax for the financial year amounted to R68 900 and must still be recorded. 5. Interest must be recorded on the loan accounts to members at 11% per annum on the opening

balance of any existing loans as well as on any additional loans granted. On 30 September 2013, an additional loan of R18 800 was granted to Lydia and was correctly accounted for in the books of the close corporation. Interest on the loans to members is capitalized. All loans are unsecured and immediately callable.

6. Interest on loans from members is calculated at 10% per annum and is not capitalized.

FAC1601/101

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ASSIGNMENT 02 - FIRST SEMESTER (continued) Question 1 Which one of the following alternatives represents the correct amount that must be disclosed as retained earnings in the statement of financial position of Travel Easy CC as at 28 February 2014? 1. R375 565 2. R336 164 3. R384 945 4. R384 999 5. None of the above Question 2 Which one of the following alternatives represents the correct amount to be disclosed as trade and other payables in the statement of financial position of Travel Easy CC as at 28 February 2014? 1. R2268 800 2. R259 330 3. R276 190 4. R283 520 5. None of the above Given information for questions 3 to 4: Londs Ltd has a financial year end of 31 January. The company has the following share capital structure: Authorised share capital:

500 000 ordinary shares

200 000 10% preference shares Issued share capital: 350 000 ordinary shares valued at R550 000, 150 000 of these shares remained unchanged for the full year while the remainder was allotted and issued on 1 January 2014 at a consideration of R400 000 by an underwriter at a 1.5% commission which was paid on the same date. However, 210 000 applications were received for these shares. 120 000 10% preference shares, 60 000 of these shares remained unchanged for the full year and were issued for R120 000 while the remainder were allotted and issued on 31 July 2013 at a consideration of R180 000. On 31 January 2014, the board of Londs Ltd decided to issue capitalisation shares to ordinary shareholders in the ratio of 1 share for every 4 ordinary share held at R2,20 per share. The capitalisation issue to ordinary shareholders was funded from retained earnings. The preference shareholders were paid a cash dividend. According to the companys solvency and liquidity test, it had sufficient cash and retained earnings to pay the dividends to ordinary and preference shareholders.

24

ASSIGNMENT 02 - FIRST SEMESTER (continued) Question 3 Which one of the following alternatives represents the correct amount of commission paid to the underwriter for the issue of ordinary shares as at 1 January 2014? 1. R2 250 2. R6 000 3. R10 500 4. R3 000 5. None of the above Question 4 Which one of the following alternatives represents the value of the capitalization issue of ordinary shares for ordinary shareholders and the preference share dividend paid to preference shareholders for the year ended January 2014? 1. R192 500 and R21 000 2. R82 500 and R10 000 3. R175 000 and R9 000 4. R190 000 and R12 000 5. None of the above Given information for questions 5 to 7: The following information was extracted from the accounting records of MVT CC: MVT CC EXTRACT OF BALANCES AS AT 28 FEBRUARY 2014

2014 2013 R R Property, plant and equipment ...................................................................... 154 300 129 300 Investment in SAN ....................................................................................... - 135 000 Inventories .................................................................................................... 18 000 12 000 Trade and other receivables ......................................................................... 30 000 10 000 Prepayments (Rent) ...................................................................................... 900 400 Other financial assets ................................................................................... 14 000 12 000 Cash and cash equivalents ........................................................................... 80 000 4 000 Members contributions ................................................................................. 52 000 52 000 Retained earnings ......................................................................................... 142 500 100 000 Long-term borrowings ................................................................................... 55 200 129 700 Trade and other payables ............................................................................. 30 000 8 000 Current tax payable ...................................................................................... 17 500 13 000

FAC1601/101

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ASSIGNMENT 02 - FIRST SEMESTER (continued) MVT CC EXTRACT FROM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2014

R Revenue ........................................................................................................................... 191 000 Cost of sales ..................................................................................................................... (70 000) Gross profit .................................................................................................................... 121 000 Dividend income ............................................................................................................... Profit on sale of investment ..............................................................................................

3 300 15 000

Distribution, administrative and other expenses ................................................................ (59 550) Depreciation ................................................................................................................... 5 000 Credit losses ................................................................................................................... 5 500 Rent expenses ................................................................................................................ 6 000 Water and electricity ....................................................................................................... 2 500 Salaries and wages......................................................................................................... 40 550 Finance costs ................................................................................................................... (3 000) Interest on long-term loan ............................................................................................... 3 000 Profit before tax .............................................................................................................. 76 750 Income tax expense .......................................................................................................... (34 250)

Additional information: 1. All sales and purchases are on credit. 2. Other financial assets consist of shares purchased in Mango Ltd. 3. An interim profit distribution of R6 000 was paid during the year. 4. MVT CC uses the indirect method to prepare their statement of cash flows. 5. The allowance for credit losses increased from R10 000 in 28 February 2013 to R15 500 in

February 2014. Question 5 Which one of the following alternatives represents the amount that must be disclosed as net cash generated from/(used in) operating activities in the statement of cash flows of MTV CC for the year ended 28 February 2014? 1. R31 700 2. R37 700 3. R24 500 4. R40 700 5. None of the above Question 6 Which one of the following alternatives represents the correct amount that must be disclosed as proceeds from sale of investments in investing activities in the statement of cash flows of MVT CC for the year ended 28 February 2014? 1. R64 500 2. R15 000 3. R135 000 4. R150 000 5. None of the above

26

ASSIGNMENT 02 - FIRST SEMESTER (continued) Question 7 Which one of the following alternatives represents the correct amount that must be disclosed as net cash from financing activities in the statement of cash flows of MVT CC at 28 February 2014? 1. R55 500 2. R71 400 3. R74 500 4. R129 700 5. None of the above Question 8 The following is information is extracted from the accounting records of Abyss Ltd as at 29 February 2014, the end of the financial year:

R Share capital: ordinary shares ........................................................................................... 200 000 Land and buildings ............................................................................................................. 530 500 Asset replacement reserve ................................................................................................ 30 000 Retained earnings (1 March 2013) ..................................................................................... 98 000 Equipment at cost .............................................................................................................. 200 000 Accumulated depreciation: Equipment ............................................................................... 40 000 Long-term loan ................................................................................................................... 150 000 Debtors control .................................................................................................................. 70 000 Creditors control ................................................................................................................ 20 000 Sales.................................................................................................................................. Allowance for settlement discount granted .........................................................................

350 000 5 500

Profit for the year ............................................................................................................... 108 000

Additional information 1. The corporation is taxed at a rate of 28%. 2. The long-term loan was obtained on 31 October 2013 and bears interest at a rate of 12% per

annum. Which of the following alternatives represents the correct ratio for return on assets of Abyss Ltd for the year ended 28 February 2014? 1. 13.42% 2. 14.16% 3. 20.66% 4. 14.06% 5. None of the above.

Question 9 The following information pertains to the head office and the branch of Afsal Ltd: 1. Branch inventory on hand (selling price):

R 1 February 2013 ......................................................................................................... 5 200 31 January 2014 ......................................................................................................... 5 000

FAC1601/101

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ASSIGNMENT 02 - FIRST SEMESTER (continued) 2. Transactions during the year ended 31 January 2014:

R Inventory sent to branch (selling price) ............................................................................ 156 200 Sales by the branch:

Cash sales ................................................................................................................ 71 600 Credit sales ............................................................................................................... 57 600

Returns to head office (cost price) ................................................................................... 7 400 Cash received from branch debtors ................................................................................. 11 200 Settlement discount granted to branch debtors ................................................................ 1 000 Inventory stolen at the branch (selling price) .................................................................... 7 500 Sundry expenses of the branch paid by head office ......................................................... 18 500

3. Additional information: 3.1 All inventories are purchased by the head office and supplied to the branch at selling price,

which is cost price plus 25%. 3.2 Due to the current economic downturn, there has been a significant decline in sales at the

branch. As a result, the head office has allowed the branch to sell certain products at selling price less 30%. The net proceeds of the products sold at discount amounted to R8 400. This amount is included in the above cash sales figure of R71 600.

3.3 During the year a burglary took place at the branch and R1 400 in cash (in respect of cash

sales) was stolen. No entries regarding the burglary were made in the books. 3.4 Inventory invoiced to the branch at R5 600 included in the above amount of R156 200

pertaining to inventory sent to branch at selling price was in transit at 31 January 2014, and therefore not included in the branchs inventory on hand of R5 000 at 31 January 2014.

Which of the following alternatives represents the correct surplus / deficit in the branch inventory account of Afsal Ltd for the year ended 31 January 2014? 1. R20 930 deficit 2. R 5 750 (surplus) 3. R10 750 deficit 4. R 150 (surplus) 5. None of the above Question 10 You are planning to travel to Asia in 2 years time and the travel package will cost you R100 000. Which of the alternatives represents the correct amount to invest monthly in an investments that yields 12% compounded monthly to yield R100 000 in 2 years time? 1. R 3 707 2. R 4 707 3. R12 847 4. R 846 5. None of the above.

END OF ASSIGNMENT 02 FIRST SEMESTER

28

ANNEXURE C COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (SECOND SEMESTER 2014)

UNIQUE NO: 794867 DUE DATE: 22 AUGUST 2014 1. This assignment must be answered on a mark-reading sheet if submitted by post. It can also




sheet




REMEMBER:





Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 second semester.










FAC1601/101

29

ASSIGNMENT 01 SECOND SEMESTER (continued) Given information for questions 1 and 2:

D-J Traders is a partnership with Derek and Jeeter as partners. The following information below pertains to the business activities of the partnership for the year ended 30 June 20.14: Balances as at 30 June 20.14:

R Capital: Derek .................................................................................................................... 135 000 Capital: Jeeter .................................................................................................................... 105 000 Current account: Derek (Cr: 1 July 20.13) .......................................................................... 3 750 Current account: Jeeter (Dr: 1 July 20.13) ......................................................................... 1 875 Asset replacement reserve ................................................................................................ 61 000 Drawings (during the year): Derek ..................................................................................... 6 735 Drawings (during the year): Jeeter ..................................................................................... 10 500 Trade and other creditors ................................................................................................... 82 395 Bank (Dr) ........................................................................................................................... 124 860 Inventory (30 June 20.14) .................................................................................................. 33 750 Trade and other receivables .............................................................................................. 57 750 Allowances for credit losses ............................................................................................... 375 Vehicles at cost .................................................................................................................. 144 000 Accumulated depreciation: Vehicles (30 June 20.14) ......................................................... 17 400 Prepayment: Equipment hire .............................................................................................. 58 200 Profit for the year ............................................................................................................... 109 750

Additional information: All the following information must still be taken into account: 1. Dereks mother-in-law granted a R150 000 loan to the partnership on 30 June 20.14 to enable

them to buy land for development. The loan will be repayable in equal instalments over 10 years and bears interest at 8% per annum. The first repayment is due on the 30 June 20.15.

2. A transfer to the value of R16 000 needs to transferred to the asset replacement reserve. 3. Terms of the partnership agreement: 3.1 The partners Derek and Jeeter share profits and losses in the ratio 3:2 respectively. 3.2 Interest is calculated at 12% per annum on the opening balances of the partners capital and

current accounts. 3.3 Both partners are entitled to a salary of R22 500 per annum. Question 1 Which one of the following alternatives represents the correct total column amount of the statement of changes in equity for the year ended 30 June 20.14 of DJ Traders? 1. R318 390 2. R395 390 3. R410 000 4. R412 625 5. None of the above

30

ASSIGNMENT 01 SECOND SEMESTER (continued) Question 2 Which one of the following alternatives represents the correct amount of the total assets of the statement of financial position of DJ Traders as at 30 June 20.14? 1. R530 550 2. R545 550 3. R550 785 4. R580 650 5. None of the above Given information for questions 3, 4 and 5: Tyde, Fayde and Thor are in a partnership, trading as Tit-For-Tat Traders. Tyde, Fayde and Thor share in profits/losses of the partnership in the ratio of 5:3:2 respectively. Tyde wants to retire from the partnership on the 30 June 20.14 and the partners decided to admit Algor to the partnership on 1 July 20.13 so as to get him acquainted with the business before Tyde retires. The profit-sharing ratio between Tyde, Fayde, Thor and Algor will be 2:1:1:1 respectively. The new partnership will trade as FATT Traders. Algor will pay R60 000 cash and contribute equipment to the value of R60 000 for his 1/5 interest in the fair value of the net assets of the new partnership. The statement of financial position of Tit-For-Tat Traders as at 30 June 20.13, the end of the financial year and immediately prior to yearend adjustments and the recording of the valuation adjustments in preparation for the change in ownership structure of the partnership, is as follows: TIT-FOR-TAT TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20.13

R ASSETS Non-current assets ....................................................................................................... 220 000 Property, plant and equipment .................................................................................... 220 000 (Land and buildings, R160 000; equipment, R60 000) Current assets ............................................................................................................... 240 000 Inventories (Merchandise) ............................................................................................ 130 000 Trade and other receivables ........................................................................................ 60 000 Cash and cash equivalents (Bank) ............................................................................... 50 000 Total assets .................................................................................................................. 460 000

EQUITY AND LIABILITIES Total equity .................................................................................................................... 340 000 Capital (Tyde: R120 000; Fayde: R80 000; Thor: R40 000) ......................................... 240 000 Asset replacement reserve .......................................................................................... 100 000 Total liabilities ............................................................................................................... 120 000

Current liabilities........................................................................................................... 120 000 Trade and other payables ............................................................................................ 120 000

Total equity and liabilities ........................................................................................... 460 000

FAC1601/101

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ASSIGNMENT 01 SECOND SEMESTER (continued) Year-end adjustments 30 June 20.13: The following year-end adjustments are still to be recorded in the books of Tit-For-Tat Traders for the year end 30 June 20.13: 1. Allowance for credit losses ...................................................................................... R10 000 2. Rental accrual ......................................................................................................... R20 000 3. Prepayments (Insurance) ........................................................................................ R30 000

In preparation of the change in the ownership structure of Tit-For-Tat Traders, the following valuations were made on 30 June 20.13: 1. Inventory ................................................................................................................. R110 000 2. Land and buildings .................................................................................................. R240 000 3. Trade and other receivables .................................................................................... R100 000 4. Trade and other payables ....................................................................................... R170 000

Question 3 Which of the following alternatives represents the valuation adjustments to be transferred to the capital account accounts of each partner, in the general ledger of Tit-For-Tat Traders on 30 June 20.13? 1. Tyde: R22 500 Fayde: R13 500 Thor: R 9 000 2. Tyde: R40 000 Fayde: R24 000 Thor: R16 000 3. Tyde: R60 000 Fayde: R36 000 Thor: R24 000 4. Tyde: R62 500 Fayde: R38 500 Thor: R26 500 5. None of the above Question 4 Which one of the following alternatives represents the correct goodwill amount of Tit-For-Tat Traders on 30 June 20.13? 1. R 60 000 2. R100 000 3. R200 000 4. R500 000 5. None of the above Question 5 Which one of the following alternatives represents the correct capital account balance of Tyde after it was correctly prepared and balanced in the general ledger of Tit-For-Tat Traders on 30 June 20.13? 1. R100 000 2. R240 000 3. R250 000 4. R300 000 5. None of the above

32

ASSIGNMENT 01 SECOND SEMESTER (continued) Given information for question 6: Frank and Levitt are in a partnership, trading as FL Wholesalers. The partners share in profits and losses of the partnership equally and the following information pertains to the business at 31 December 20.13: Furniture and equipment at carrying amount ............................................................................ Inventory .................................................................................................................................. Trade and other receivables ..................................................................................................... Capital: Frank ........................................................................................................................... Capital: Levitt ........................................................................................................................... Bank (Cr) .................................................................................................................................. Trade and other payables ........................................................................................................

R 300 000 157 500 30 000

225 000 187 500 18 000 57 000

On 2 January 20.14 the partners agreed to liquidate the partnership simultaneously. Frank took over the furniture and equipment at the carrying amount of R210 000. This amount must be debited in his capital account. The remainder of the furniture and equipment was sold for R142 500, cash. The inventory was returned to the supplier and a cash refund, less a handling fee of R9 000, was received. The trade and other receivables were offered a settlement discount of 10% if they settled their accounts by 10 January 20.14. Only 90% of the debtors settled their accounts by the due date and the remainder of the debtors is regarded as irrecoverable. Liquidation expenses to the amount of R15 000 was paid and on the cash settlement of the creditors accounts, a total settlement discount of R3 000 was received. Question 6 Which one of the following alternatives represents the cash payments to be made to the partners on completion of the liquidation of the partnership? 1. Frank: R18 600, Levitt: R133 600 2. Frank: R27 900; Levitt: R200 400 3. Frank: R35 900; Levitt: R250 400 4. Frank: R40 500; Levitt: R300 400 5. None of the above Given information for question 7 Rusty, Ross and Dusty were in a partnership which traded as Rusty-Dusty Traders, and they shared in the profits and losses in the ratio of 1:2:1 respectively. They decided to liquidate the partnership piecemeal as from 2 January 20.14.

FAC1601/101

33

ASSIGNMENT 01 SECOND SEMESTER (continued) The following information pertains to the partnership: RUSTY-DUSTY TRADERS TRIAL BALANCE AS AT 31 DECEMBER 20.13

Debit Credit R R

Capital: Rusty ............................................................................................... 25 000 Capital: Ross ................................................................................................ 50 000 Capital: Dusty ............................................................................................... 25 000 Trade and other payables ............................................................................. 45 000 Vehicle at cost .............................................................................................. 50 000 Accumulated depreciation: Vehicle ............................................................... 30 000 Trade and other receivables ......................................................................... 65 000 Inventory ....................................................................................................... 60 000

175 000 175 000

The partners decided that Ross can take over the vehicle on 2 January 20.14 at its carrying amount. His capital account must be debited accordingly. As soon as sufficient cash becomes available, interim repayments must be made to the partners in such a manner that no partner will have to make any repayments thereof to the partnership. The inventory and trade debtors were realised as follows:

Date Carrying amount Cash proceeds 31 January 20.14 R60 000 (Inventory) R55 000 28 February 20.14 R65 000(Trade debtors) R57 500

On 1 February 20.14 the trade creditors were paid in full. Question 7 Which alternatives shows the correct amounts that must be repaid to the partners as interim repayments on 1 February 20.14? 1. Rusty: R5 000 Ross: R0 Dusty: R5 000 2. Rusty: R10 000 Ross: R20 000 Dusty: R10 000 3. Rusty: R20 000 Ross: R40 000 Dusty: R20 000 4. Rusty: R25 000 Ross: R50 000 Dusty: R25 000 5. None of the above Given information for question 8 and 9: Tony and Gilbert are in a partnership, trading as Toni-Gilbert Sports Warehouse. The business was not awarded a lucrative contract to supply rugby kits to Old Greys rugby club and as a result the partners decided to liquidate the partnership on 30 April 20.14, simultaneously. On this date, immediately prior to the liquidation, the following information was used to prepare a post adjustment trial balance for the partnership:

34

ASSIGNMENT 01 SECOND SEMESTER (continued) Balances as at 30 April 20.14:

R Capital: Tony ................................................................................................................... 1 500 000 Capital: Gilbert ................................................................................................................ 1 000 000 Current account: Tony (Cr) ............................................................................................. 150 000 Current account: Gilbert (Cr) ........................................................................................... 400 000 Land and buildings at cost .............................................................................................. 1 500 000 Furniture at carrying amount ........................................................................................... 175 000 Goodwill .......................................................................................................................... 675 000 Asset replacement reserve ............................................................................................. 525 000 Inventory ......................................................................................................................... 150 000 Trade and other receivables ........................................................................................... 800 000 Bank (Dr) ........................................................................................................................ 700 000 Long-term loan (GBI Bank) ............................................................................................. 425 000

Additional information: 1. The partnership agreement did not stipulate the ratio according to which the profits and losses

must be apportioned to the partners. 2. On 30 April 20.14:

The land and buildings were sold for R2 250 000, cash.

The long-term loan was repaid in full.

The furniture was sold for cash at a profit of R15 000.

95% Of the trade debtors settled their accounts at a discount of 10%. The outstanding balance of 5% was regarded as irrecoverable.

The liquidation costs amounted to R30 000, and were paid for in cash.

It was decided to regard R100 000 of the recorded inventory as obsolete. The remaining inventory was taken over by Tony at the recorded value thereof.

Question 8 Which one of the following alternatives represents the correct amount to be transferred to each partners capital account from the liquidation account in the general ledger of Tony-Gilbert Sports Warehouse on 30 April 20.14? 1. Tony: R250 000 Gilbert: R138 500 2. Tony: R311 400 Gilbert: R207 600 3. Tony: R350 000 Gilbert: R250 000 4. Tony: R365 500 Gilbert: R285 500 5. None of the above Question 9 Which one of the following alternatives represent the correct cash payment to be made to Tony after hes capital account was correctly prepared and balanced in the general ledger of Tony-Gilbert Sports Warehouse on 30 April 20.14? 1. R1 100 400 2. R1 245 400 3. R1 650 000 4. R1 821 400 5. None of the above

FAC1601/101

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ASSIGNMENT 01 SECOND SEMESTER (continued) Given information for question 10: Rose and her best friend, Blossom is in a partnership, trading as Rose-Blossom Florists; they share in profits/losses of the partnership in the ratio of 3:2 respectively. Recently they signed a huge bouquet delivery contract with the manager of the office blocks across the street. They were in desperate need of some assistance to join their partnership to assist with the preparation of the deliveries and who could provide capital to help sustain the growth of the business. Bloom, another friend of Rose, offered to join the partnership. Additional information: It was agreed that Bloom will join the partnership on 1 July 20.14 and that the new partnership will trade as Rose-Blossom-Bloom Florists. Bloom will acquire a third share in the profit/losses of the new partnership. Rose and Blossom will relinquish a third share to Bloom according to their existing profit-sharing ratio. On 1 July 20.14 Bloom will contribute a vehicle with the value of R250 000 as well as cash to the amount of R140 000 for her third share in the net assets of the new partnership. Que

INf2611 2014May/June Exam paper

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