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BACHELOR OF COMMERCE DEGREE
(BCOM)
ACCOUNTING 1 QUESTION BANK
Copyright © 2014
REGENT Business School
All rights reserved; no part of this book may be reproduced in any form or by any means,
including photocopying machines, without the written permission of the publisher
Accounting 1 Question Bank BCOM
REGENT Business School Page 1
TABLE OF CONTENTS
PAGE
Chapter 1 – Accounting Concepts and Transactions 2
Chapter 2 – Year-end Adjustments and Financial Statements 8
Chapter 3 – Control Accounts and Reconciliations 18
Chapter 4 – Inventory 29
Chapter 5 – Disposals of Property, Plant and Equipment 35
Chapter 6 – Partnerships 38
Chapter 7 – Close Corporation 48
Chapter 8 – Companies 54
Chapter 9 – Cash Flow Statements 62
Chapter 10 – Bank Reconciliations 69
Accounting 1 Question Bank BCOM
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CHAPTER 1
ACCOUNTING CONCEPTS AND TRANSACTIONS
QUESTION 1 [10]
Mr Takkies is the accountant of Bad Luck Limited. He is struggling to classify payables, closing
inventory and purchases in the financial statements.
1.1 With reference to the above accounts define the following to Mr Takkies to help him with
his financial statements:
a) Current Liabilities (2)
b) Expenses (3)
c) Current Assets (2)
1.2 Discuss the objectives of financial statements according to the accounting
framework. (3)
QUESTION 2 [10]
Mr Nat opened a business Puzzler Traders and obtained a loan for R250 000 on the 01 June
2012. The interest charged on the loan is 15% per annum which is payable on 01 March of
every year. The financial year-end for Puzzler Traders is 28 February 2013. It was decided by
Mr Nat that 25% of the loan will be paid by 30 April 2013.
Required:
2.1 Calculate interest on loan for 28 February 2013. (2)
2.2 Indicate how the above interest transaction will affect the accounting equation.
(Present, A = E+L, show increase with “+” sign and decrease with “-“sign). (2)
2.3 Discuss how the above loan transaction will be treated in the financial statements
as at 28 February 2013 (discuss the loan amount as well as the interest). (6)
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QUESTION 3 [10]
The accountant of Feet-Fit Shoe wholesalers is busy with recording income and is struggling
with the following transactions:
a) Feet-Fit Shoe sells a motor vehicle for R30 000, the vehicle was purchased for R20 000.
b) Received a deposit of R2 000 from AB Company to manufacture 50 pairs of shoes.
c) Commission income was received but not yet earned, R1 100.
d) Received R350 from a debtor for items sold on credit.
e) Feet –Fit sells inventory for R10 000 cash.
Required:
Explain using the definition of “income” whether each of these transactions results in income for
the period.
QUESTION 4 [10]
Financial statements are prepared and presented at least annually and are directed toward the
common information needs of a wide range of users.
Required:
4.1 List the users of financial statements identified by The Accounting Framework
and briefly discuss their needs for information. (6)
4.2 Briefly discuss the relationship between the information needs of investors and
of other users. (4)
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QUESTION 5 [10]
The owner of a small business selling and repairing cars has just received a copy of the
financial statements for the current year. The owner is confused about some of the items in the
financial statements and has asked you to clarify certain points. You have agreed to do this.
The owner’s questions are as follows:
1. What does the term “asset” mean? My knowledge and skill are assets to my
business, but I do not see these in the financial statement statements.
Can you explain this omission to me? (6)
2. Why is the “bank” balance on the statement of financial position different from
the profit amount in the statement of comprehensive income? (4)
Required:
Answer each of the above questions, using the correct accounting terminology
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QUESTION 6 [10]
The assets and liabilities of Al Black’s entity, The Black-Shop were as follows as at
31 December 2013:
2013
Land and Buildings 50 000
Payables 6 000
Equipment 15 000
Machinery 12 000
Bank overdraft 4 520
Long term loan 60 000
Receivables 3 000
Inventories 5 500
Investments 15 000
Petty cash 150
The owner did not make any capital contributions or cash withdrawals for the year.
Required:
6.1 Define the term equity. (2)
6.2 Calculate the net profit of The Black-Shop for 31 December 2013. (6)
6.3 Assume a R20 000 capital contribution was made by Al Black; based on this
assumption calculate the net profit for 31 December 2013. (2)
QUESTION 7 [15]
7.1 List the 5 elements of financial statements. (5)
7.2 Discuss the objectives of financial statements according to the accounting
framework. (3)
7.3 Discuss when comparative information for numerical information in the financial
statements should be disclosed. (3)
7.4 Under which circumstances should an entity’s financial statements not be
prepared on the assumption that the entity is a going concern? (4)
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QUESTION 8 [20]
Mr Abel, a motor mechanic, has worked for a large motor company for the last eight years.
During the past few years he has been doing private work during his spare time. This has grown
to such an extent that he decided to go into his own business on a full-time basis. On
01 March 2014 he left the motor company and formed his own repair business, Abel Car
Services. The following transactions took place:
Required:
8.1 Show how the above transactions affect the financial position of the business as
represented by A = E + L for the month ended 31 March 2014. (14)
8.2 Explain why the accounting equation should always balance. (2)
8.3 What do you understand by the term “net asset value”? (2)
8.4 Why does the net asset value of a business not change when assets are
purchased on credit? (2)
Date Transactions Amount
2014 R
Mar 01 Mr Abel owned the following assets which he transferred and
used exclusively in his business:
Tools
Electronic equipment
Pressure regulator
Mr Abel acquired the hydraulic press on credit on the 01 March
2014; he still has a balance owing. The business assumed
responsibility for this amount.
5 000
9 500
1 500
1 000
02 Mr Abel opened a bank account in the name of the business and
deposited capital.
8 000
02 An amount owed to Mr Abel by a customer was taken over by the
business.
450
08 A cash repair was done. 12 000
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QUESTION 9 [30]
The following information is applicable to ABC Dry-Cleaners:
1. On 1 January 2013 the assets and liabilities of the entity consisted of the following :
Cash R13 000
Receivables R1 600
Cleaning material on hand R800
Payables R20 000
Furniture and Equipment R38 000
2. The following is a summary of the transactions which occurred during January 2013:
a) Paid water and electricity for the month R1 000
b) Received R3 000 cash for dry-cleaning services rendered
c) Paid payables R5 000
d) Debited customers with R6 000 for services rendered
e) The owner withdrew R2 200 cash for private use
f) Paid the following expenses:
Wages R1 400
Rent R 500
Telephone R 75
g) Allowed R200 discount to customer debited in (d) for an item damaged during the dry
cleaning process
h) Cleaning materials on hand amounts to R600 at 31 January 2013.
Required:
9.1 Recognise assets and liabilities on 01 January 2013 and transactions for
January 2013, using the accounting equation with relevant headings (A = E + L). (12)
9.2 Balance the accounting equation at end of the month (2)
9.3 Prepare the Statement of Comprehensive Income and Statement of Financial
Position for the month ended 31 January 2013. (16)
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CHAPTER 2
YEAR END ADJUSTMENTS AND FINANCIAL STATEMENTS
QUESTION 1 [20]
Consider the following transactions of Clueless Enterprises for year ended 31 March 2013:
1. Received an amount of R5 000 on 01 February 2013 from a client for consulting services
to be delivered in terms of a contract agreed with the client from the period 01 January
2013 to 30 April 2013.
2. Purchased R30 000 worth of cleaning material on 15 November 2012. Cleaning material
worth R12 000 was still unused at 31 March 2013.
3. Received March electricity account of R800 on 10 April 2013.
4. Monthly rental for the use of the premises amounts to R1 200. The amount in the
general ledger account at 31 March 2013 amounts to R 15 600.
5. One of the company’s major customers went insolvent and will not be able to meet their
short-term commitment of R7 50.
6. Purchased vehicle from Data Motors for R 65 000 credit, on 01 December 2012.
Depreciation must be provided for using the diminishing balance method at 20% pa.
7. Salaries and wages of R500 were outstanding for March 2013 and an overpayment of
R50 was made in respect of water and electricity.
8. The business had taken out a loan of R200 000 on the 01 March 2013. The loan
agreement states that the loan will be repaid annually in equal instalments over ten
years starting on the 01 March 2014. Interest will be paid every month in arrears from 01
April 2013. Interest at 15% has consistently been charged on the loan.
Required:
Show how the above events will reflect on the Statement of Financial Position as at
31 March 2013.
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QUESTION 2 [30]
The following information relates to T Taylor, a service enterprise:
PRE-ADJUSTED TRIAL BALANCE OF T TAYLOR AT 31 MARCH 2013
DEBIT CREDIT
R R
Rent Income 64 000
Stationery 3 350
Capital 149 000
Drawings 6 084
Accumulated Depreciation - Equipment 15 000
Commission Income 2 700
Provision for bad debt adjustment 1 600
Property at fair value 350 000
Equipment at cost 34 000
Bank 24 208
Debtors control 26 100
Interest on mortgage Loan 23 870
Municipality levy 4 333
Insurance 2 405
Mortgage loan at 10.5% 248 000
Water and electricity 2 750
478 700 478 700
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Additional Information:
a) T Taylor had 5 tenants, each paying different rental amounts. Monthly rental of R1 750
for one of the tenants was still due for two months at the end of March 2013.
b) Stationery on hand at 31 March 2013 amounted to R1 150.
c) R750 commission was earned for April and May 2013.
d) Debtor D Persue disappeared, management decided to write his debt of R2 650 off as
irrecoverable.
e) Provision should still be made for depreciation on equipment at 10% per annum on the
diminishing balance method.
f) The water and electricity account for March 2013 of R310, has not yet been paid.
g) The insurance premium for April was paid in advance
h) Interest on the loan for the month of March 2013 is still to be provided for.
Required:
2.1 Briefly explain why it is necessary for a business to process adjusting journal
entries at the end of the financial year. (2)
2.2 Prepare the adjusting journal entries to record points of the additional
information above. (16)
2.3 Draft the Statement of Comprehensive Income for T. Taylor for the year
ended 31 March 2013. (12)
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QUESTION 3 [40]
The following Pre-Adjusted Trial Balance was taken from the books of Sunrest Distributors on
31 December 2013:
DEBIT CREDIT
R R
Capital 141 700
Land and buildings at cost 263 240
Vehicles at cost 40 000
Equipment at cost 9 000
Accumulated depreciation: Vehicles
(01/01/2013)
11 200
Accumulated depreciation: Equipment
(01/01/2013)
1 710
Fixed Deposit: SAAB Bank Ltd 50 000
Inventory: Merchandise 8 500
Debtors Control 5 200
Bank 3 100
Petty cash 100
Cash float 500
Creditors Control 9 550
Long term loan: Stranded Bank Ltd 25 000
Provision for bad debts 300
Sales 381 790
Cost of sales 165 400
Debtors allowance 1 200
Wages 2 000
Salaries 25 000
Rates 1 500
Discount allowed 380
License 1 000
Motor vehicle expenses 3 500
Bad debts 550
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Packing materials 4 700
Insurance 2 250
Water and electricity 2 100
Telephone 1 400
Advertising 2 000
Rent income 15 600
Discount received 650
Interest on fixed deposit 5 000
Bad debts recovered 120
592 620 592 620
Additional Information:
The following adjustments must still be taken into account:
a) Packing material on hand at 31 December 2013, R980.
b) The long term loan was entered into on 01 October 2013, according to the agreement
interest will be payable bi-annually at a rate of 18% p.a.
c) Advertising includes an amount of R400 paid for January 2014.
d) Rent income includes an amount in respect of January 2014.
e) Interest on fixed deposit has not yet been received for the last two months of the
financial year. Interest is calculated at a rate of 12% p.a.
f) Insurance includes an amount of R750 paid for the period 01 November 2013 to 31
October 2014.
g) The telephone account of R165 for December 2013 was not yet paid.
h) Depreciation must be provided as follows:
Vehicles: 20% p.a. on the diminishing balance method.
Equipment: 10% p.a. on the diminishing balance method.
NOTE: Equipment with a cost of R2 000 was purchased on 01 July 2013
i) The account of Loose-End Ltd, a debtor owing R200, must be written off as
irrecoverable.
j) Adjust the provision for bad debt to 5% of debtors.
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Required:
3.1 Define the term ‘net profit’. (2)
3.2 Prepare the Statement of Comprehensive Income for the year 31 December 2013. (20)
3.3 Calculate the Gross Profit Percentage achieved for the year. (2)
3.4 Prepare the Statement of Financial Position as at 31 December 2013. (10)
3.5 Briefly explain if the financial worth of the business increases or decreases, also
explain what caused this change? (2)
3.6 Prepare the Property, Plant and Equipment note for 31 December 2013. (4)
QUESTION 4 [40]
You are provided with the Pre-adjusted Trial Balance of Aneesa Traders for the year ended
30 June 2013:
DEBIT CREDIT
R R
Capital 1 900 000
Mortgage loan: Joy Bank 805 360
Land and buildings 2 000 000
Vehicles at cost 814 000
Equipment at cost 616 000
Accumulated depreciation - Vehicles 294 800
Accumulated depreciation - Equipment 341 000
Inventory 955 000
Cash float 15 000
Bank 313 100
Petty cash 3 300
Debtors control 396 000
Creditors control 487 300
Provision for bad debts 18 000
Fixed deposit: Broad bank (8% pa) 495 000
Sales 10 500 000
Sales returns 145 200
Cost of sales 7 487 000
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Rent income 176 880
Interest income on fixed deposit 26 630
Bad debts recovered 2 300
Audit fees 73 800
Salaries and wages 660 000
Packing material 23 100
Marketing expenses 480 000
Sundry expenses 63 770
Bad debts 12 000
14 552 270 14 552 270
Additional information:
a) A physical stock-taking on 30 June 2013 revealed the following inventories on hand:
Inventory: Merchandise R902 150
Packing material R 4 260
b) Audit fees of R15 000 was outstanding at the end of the financial period.
c) Make a provision for outstanding interest on a fixed deposit. This investment has been in
existence for the entire year. Interest is not capitalised.
d) A debtor who originally owed R32 000 has been declared insolvent. His estate paid 40
cents in every rand and this has been correctly recorded. The remaining balance must
be written off as irrecoverable.
e) Provision for bad debts must be adjusted to 5% of debtors.
f) The rent increased by R1 320 on 01 April 2013. The tenant has paid rent until the end
July 2013.
g) A vehicle was sold on credit for R90 000 on 31 December 2012. The fixed asset register
revealed the following regarding this vehicle. This transaction has not been recorded by
the book-keeper.
R
Cost price 235 000
Accumulated depreciation on 01 July 2012 105 750
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h) Make provision for depreciation as follows:
Vehicles at 15% p.a. on cost price.
Equipment at 10% p.a. on the diminishing balance method.
NOTE: New equipment to the value of R48 000 was purchased on 01 September 2012.
Initial delivery and handling costs included in the value is R3 000.
i) The loan statement received from Joy Bank on 30 June 2013 reflected the following:
R
Balance at the beginning of the financial year 1 125 000
Repayments during the year 458 000
Interest capitalised ?
Balance at the end of the financial year 804 500
Required:
4.1 Prepare the Property Plant and Equipment Note on 30 June 2013. (15)
4.2 Prepare the Statement of Comprehensive Income for 30 June 2013. (25)
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QUESTION 5 [40]
You are provided with information related to Global Traders on 28 February 2013.
DEBIT CREDIT
R R
Capital 855 750
Mortgage loan: Pride bank 288 700
Land and buildings 810 000
Vehicles at cost 513 000
Equipment at cost 235 600
Accumulated depreciation – Vehicles 178 600
Accumulated depreciation – Equipment 73 940
Debtors control 71 820
Creditors control 16 680
Inventory 69 730
Bank 90 000
Cash float 1 000
Provision for bad debts 3 940
Sales 1 330 950
Sales returns 950
Cost of sales 823 450
Stationery 1 630
Discount received 2 090
Bad debts 1 350
Bad debts recovered 550
Insurance 22 800
Interest on loan 32 300
Bank charges 5 700
Rent income 124 030
Salaries and wages 164 430
Accounting fees 31 470
2 875 230 2 875 230
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Additional information:
a) Depreciation on vehicles is calculated at 30% p.a. on the diminishing balance method. A
new vehicle with a cost price of R133 000 was bought on 01 November 2012 and was
correctly recorded.
b) Interest is capitalised on the mortgage loan. The annual loan statement from Pride Bank
reflected the following:
PRIDE BANK
LOAN STATEMENT ON 28 FEBRUARY 2013
R
Balance at the beginning of the financial year 304 000
Repayments during the year (6 500*12) 78 000
Interest capitalised ?
Balance at the end of the financial year 288 700
c) The fair value of the Land at 28 February 2013 is R900 000. No entry was made for this.
d) The account of R Kingful, who owes R1 250, must be written off. Adjust the provision for
bad debts to 4% of outstanding debts.
e) A debtor, L Ndlovu, whose account has previously been written off, paid R120. The
bookkeeper incorrectly credited the amount to the bad debts account. Correct the error.
f) Stationery on hand at 28 February 2013 is estimated at R190.
g) A physical stock taking on 28 February 2013 revealed the value of stock on hand
as R67 240.
h) An annual insurance premium of R11 400 was paid on 01 January 2013.
i) The rent received from a tenant included the rent for March 2013. The rent was
increased by R912 per month on 01 October 2012.
Required:
5.1 Prepare the Statement of Comprehensive Income for 28 February 2013. (20)
5.2 Prepare the Statement of Financial Position as at 28 February 2013. (20)
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CHAPTER 3
CONTROL ACCOUNTS AND RECONCILIATIONS
QUESTION 1 [25]
The following information relates to Ntuzuma Traders:
1. Balance on the Debtors Control Account on 01 April 2013 R26 000
2. Total of the List of Debtors Balances at 30 April 2013 R23 610
Totals of the Subsidiary Journals for April 2013 are as follows:
Cash Receipts Journal:
R
Bank 15 600
Debtors Control 13 100
Creditors Control 200
Sales 11 000
Discount Allowed (500)
Sundry Accounts 1 800
Cash Payments Journal:
R
Bank 17 200
Debtors Control 100
Creditors Control 6 450
Purchases 8 750
Discount Received (600)
Sundry Accounts 2 500
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R
Sales Journal 11 700
Purchases Journal 9 000
Sales returns Journal 1 300
General Journal: Debits in respect of debtors
Credits in respect of debtors
200
300
Additional information:
a) All sales exclude vat. The sales journal was under-cast by R200.
b) Interest of R100, charged to a debtors account during April 2013, was correctly posted to
the relevant debtors account in the debtors’ ledger and to the interest account in the
general ledger but the contra entry was posted to the creditors control account.
c) Sales of R1 190 which has been recorded correctly in the sales journal, was entered in
the account of debtor N. Nel as R1 100.
d) A credit note for R50 was recorded correctly in the sales returns journal, but was
erroneously posted to the wrong side of R. Raja’s account.
e) A cheque for R250 received from B. Bell was entered on the credit side of D. Dell’s
account.
f) Redundant machinery that was sold on credit for R600 to S. Sithole has not yet been
recorded in the books.
g) A cheque for R550 received from L. Long was returned by the bank marked “r/d”. No
entry has been made regarding this “r/d” cheque.
h) Debtor P. Pod who owed R300 was declared insolvent. His estate paid 40 cents in the
rand. All the relevant entries must still be recorded in the books.
Required:
1.1 Prepare the Debtors Control Account for April 2013. (18)
1.2 Prepare the Reconciliation of the total of the list of debtors’ balance with the final
balance of the control account as calculated in 1.1 above. (7)
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QUESTION 2 [25]
You are provided with the information relating to SA Traders. The bookkeeper has made a few
errors when reconciling the Debtors’ Control Account to the Debtors’ List.
1. The bookkeeper discovered that he had made a number of errors when preparing the
Debtors’ Ledger Accounts.
2. The Debtors Control Account and the Debtors’ list did not reconcile. The difference is
R 6 470. The following summary was prepared on 31 August 2013:
R
Balance of the Debtors’ Control Account 70 663
Total of the Debtors’ List 77 133
Sunnyside Traders 17 600
Thembisa Traders 55 476
Tildai Traders 3 400
Mondo Stores 660
Difference 6 470
3. Errors on the account of Sunnyside Traders
Interest on the account was calculated incorrectly. Adjust for an additional R165
interest.
VAT at 14% was omitted on Invoice 868 dated 31 July 2013. Total sales,
excluding VAT, amounted to R16 500.
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4. Errors on the account of Thembisa Traders
A credit note of R3 080 was incorrectly reflected in the Debtors’ Ledger Account
as a debit entry. The general ledger is incorrect.
Thembisa Traders claimed payment of R13 200 last month,this is not reflected
on their statement. Investigators revealed that Thembisa Traders’ payment was
incorrectly posted to the account of another debtor, Sunnyside Traders.
Thembisa Traders had issued a dishonoured cheque of R2 750 in settlement of
an amount of R3 100. The CRJ and CPJ entries were correctly recorded. The
cancellation of the discount was not reflected in the Debtors’ Ledger Account.
The control account is correct.
5. Additional errors reflected on the Debtors’ Reconciliation Statement:
Mondo Stores’, a debtor, a debt of R660 has been written off as irrecoverable.
The amount was posted to the Debtors’ Control account but not to the Debtors’
personal account.
Tildai Suppliers are reflected in the Debtors’ Ledger and the Creditors’ Ledger.
Their credit balance of R2 124 in the Creditors’ Ledger is to be offset against
their account in the Debtors’ Ledger.
Required:
2.1 SA Traders requires their new customers to provide personal details, including
proof of residence, before opening accounts. Briefly explain why this is necessary.
List 2 points. (4)
2.2 Prepare the correct Debtors’ List on 31 August 2013 and show how you would
adjust the Debtors’ Control Account. (21)
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QUESTION 3 [25]
Crystal Traders sells glassware for cash and on credit. Although their credit terms are 60 days,
they budget on the expectation that 80% of debtors will meet these terms.
1. Balance of Debtors’ Control Account on 31 March 2013, R200 000.
2. Balances as per Debtors’ Ledger on 31 March 2013:
M Carey R 64 500
R Jansen R 41 200
S Wonder R 23 000
C Dion R 51 500
P Collins R 7 900
TOTAL R188 100
3. The following errors and omissions were discovered and must be corrected:
a) The Debtors’ Journal has been overcast by R2 600.
b) An invoice issued to S Wonder for R1 800 had not yet been recorded in the books of
Crystal Traders.
c) Stock sold on credit to P. Collins was incorrectly charged to the account of
R. Jansen, R8 300.
d) An invoice issued to P Collins for R6 000 had been posted to the wrong side of his
account.
e) A cheque of R13 500, originally received from R. Jansen in settlement of an invoice
of R15 000, was returned by the bank due to insufficient funds. No entries have yet
been made.
f) Goods sold on credit to S Wonder for R5 800 were correctly recorded in the Debtors’
Journal but incorrectly posted as R8 500 to S Wonder’s account in the Debtors’
Ledger.
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Required:
3.1 Explain why the Debtors’ Control Account should correspond with the Debtors’ List. (2)
3.2 Explain TWO processes the bookkeeper should follow if he/she discovers a difference
between the Debtors Control Account and the Debtors’ List from the Debtors’ Ledger. (2)
3.3 Calculate the following:
3.3.1 The correct closing balance of the Debtors Control Account on 31 March 2013. (9)
3.3.2 The correct amounts owing by the following debtors of Crystal Traders: (12)
a) R Jansen
b) S Wonder
c) P Collins
QUESTION 4 [20]
Mr Swart, the owner of Swart Traders, receives a statement from one of his suppliers by the
name of Gerald and Co. for the month ended 28 February 2013. Mr Swart discovers the
following errors while comparing Gerald and Co.’s statement with their account in his payables
ledger:
1. Invoice 1410 for R300 has been recognised twice in Swart’s records.
2. Invoice 1416 for R24 has been entered as purchases returns on Gerald and Co.’s
statement.
3. Invoice 1419 for R140 has been entered twice on Gerald and Co.’s statement.
4. Invoice 1516 is correctly reflected on Gerald and Co.’s statement as R120 (after a trade
discount of 20%) while the amount is shown in Swart’s records before trade discount
(Swart is entitled to the trade discount.)
5. Invoice 1546 for R60 has been recognised in Swart’s records as purchases returns.
6. The “amount due” on their statement of 31 January 2013 was R400. It was paid after the
deduction of 5% cash discount. The amount was received by Gerald and Co. Only on 04
March 2013 and, therefore, they do not allow the discount. The payment and discount
were recognised in Swart’s statement in February 2013.
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7. The balance of Gerald and Co.’s account in Swart’s payables ledger on 28 February
2013, before the correction of the above errors, amounts to R860.
8. Swart wishes to pay their account by 15 March 2013 in order to enjoy the benefit of the
30 das, 5% cash discount offered by them.
Required:
4.1 Calculate the amount that will be payable by Swart before 15 March 2013.
Hint: Prepare the creditors account of Gerald and CO. (15)
4.2 Calculate the balance on Gerald and Co.’s statement as at 28 February 2013. (5)
QUESTION 5 [25]
The accountant of Ms Blombos, owner of Blombos Nurseries, prepared the following payable
account on 30 April 2013.
Payable: Impalalelie
2013
April 10 Bank 3 630
11 Sales 1 870
Purchase Returns 342
24 Bank 2 420
30 Bank 4 050
Balance c/d 4 236
16 548
2013
April 01 Balance 2 000
06 Purchases 3 850
10 Discount received 330
15 Purchases 5 200
24 Discount received 363
26 Purchases 4 400
30 Discount received 405
16 548
2013
May 01 Balance b/d 4 236
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On 30 April 2013 Ms Blombos received the following statement from Impalalelie:
BLOMBOS NURSERIES
Statement
2013
April
Debit
R
Credit
R
Balance
R
01 Balance 2 300
06 Sales 3 850
10 Bank 3 630
Discount 363
11 Sales returns 300
15 Sales 5 720
19 Sales 2 310
24 Bank 2 420
Discount 121
29 Sales 1 001
The opinion of Ms Blombos is that her entity owes only R14 236 to Impalalelie and she is
therefore upset that, according to the statement, she owes R13 187. She requests that you do
the necessary reconciliation.
The following information is available:
1. During March 2013 there was a debit error of R300 on the statement prepared by
Impalalelie. This error is still not rectified.
2. Ms Blombos has an agreement with Impalalelie that a 10% discount will be received on
each cheque payment.
3. The sales of R1 870 on 11 April in the account of Impalalelie is in respect of another
customer.
4. On 11 April an entry purchase returns of R342 was made in the account of Impalalelie.
5. The sales of R2 310 on 19 April is in respect of another customer.
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6. The purchase of R4 400 on 26 April in the account of Impalalelie is an erroneous entry.
7. The sales on 29 April for R1 001 were definitely for Blombos Nurseries.
8. The balance of entries in the account of Impalalelie (except discount received) and the
statement of Blombos are correct.
Required:
5.1 Prepare the correct account for Impalalelie in the ledger of Blombos Nurseries.
Hint: Start with the credit balance of R2 000. (15)
5.2 Reconcile the balance of R13 187 on the statement to Blombos Nurseries so that
it corresponds with the balance of the ledger account. (10)
QUESTION 6 [30]
The following information was obtained from the accounting records of Naidoo Traders on
31 March 2013:
Balances 01 March 2013
R
Debtors Control 17 379
Creditors Control 14 350
Totals on 01 March 2013
R
Debtors List 19 793
Creditors List 16 562
Cash Receipts Journal:
R
Sales column 51 590
Debtors control column 63 462
Sundry column 10 318
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Cash Payments Journal:
R
Purchases column 57 820
Creditors control column 56 602
Sundry column 19 275
Totals of subsidiary journals for March 2013
R
Sales journal 66 080
Purchases journal 60 900
Sales returns journal 1 344
Purchases returns journal 1 080
Sundry: Debits in respect of debtors
Credits in respect of debtors
Debits in respect of creditors
Credits in respect of creditors
778
419
34
250
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Additional Information:
1. An entry in the sales returns journal of R224 in respect of a receivable, Mr Double
Delight, was posted to the debit side of his account.
2. An amount of R163 in the creditor’s column of the cash payments journal is in respect of
a dishonoured cheque which was received from Mr Oyster Pearl. The amount was
indeed correctly posted to Mr Oyster Pearl’s account.
3. Interest of R85 still has to be charged on the overdue account of Mr Oklahoma.
4. Sundry creditor’s credit includes R50 in respect of interest charged by Mr Satchmo,
which has to be cancelled.
5. The debtor’s column in the cash receipts journal includes R125 received from Mr
Burning Sky, whose account was previously written off as uncollectible. It was not
posted to Mr Burning Sky’s account.
6. The purchases journal was overstated by R400.
7. An amount of R166 in the purchases returns journal was posted as R766 to the
creditors, Mr Potch Pearl’s account.
Required:
6.1 Prepare the debtors and creditors control accounts for March 2013. (20)
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CHAPTER 4
INVENTORY
QUESTION 1 [10]
Dow Jones The owner of Jones Cycles took goods with the selling price of R3 000 for his own
personal use. Selling prices are determined by a markup of 25% on cost price. The perpetual
inventory system is used.
Required:
1.1 Prepare the adjusting journal and present the accounting equation for the
above transaction. (6)
1.2 Differentiate between the perpetual inventory system and the periodic
inventory system. (4)
QUESTION 2 [10]
On 31 January 2012 Mr Gold purchased goods on credit from Tulip Traders for R 2 228. The
amount is subject to a discount of R 228 if it is settled within 30 days.
On the 08 February 2012 the account was settled. On the 01 March 2012 the goods were sold
on credit for R 3 500.
Required:
Record the above transaction using:
a) The Perpetual Inventory System. (5)
b) The Periodic Inventory System. (5)
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QUESTION 3 [10]
The following transactions pertaining to Inventory of SID TRADERS took place during the year.
Sid Traders uses the PERIODIC inventory system; the year end is the 28 February 2013.
1. Sid purchased goods on credit from the following wholesalers:
AA Wholesalers R 15 000
AD Wholesalers R 10 000
XX Wholesalers R 12 000
2. Railage on purchases amounted to R3 000.
3. Returned R4 500 worth of goods to AA Wholesalers.
4. Issued invoices to the following customers for goods sold:
J Joy R25 000
T Tan R14 500
B Brown R 5 000
B Blue R 2 000
5. Carriage on sales was R3 500.
6. Inventory at 01 March 2012 was R10 000 and at 28 February 2013 was R4 000.
Required:
3.1 Prepare the Trading Account for the 28 February 2013. (8)
3.2 Calculate Gross Profit Percentage for the year using information above. (2)
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QUESTION 4 [15]
The following information was obtained from the accounting records of Wood Traders for year
ended 31 December 2013:
2013
R
2012
R
Sales 250 000 200 000
Purchases 210 000 125 000
Opening stock 30 000 5 000
Purchase returns 5 000 3 500
Carriage on sales 4 000 5 000
Import duty 10 000 9 000
Required:
If the same gross profit percentage on sales applies to 2013 as that which was applicable to
2012, calculate the inventories on hand as at 31 December 2013.
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QUESTION 5 [20]
The following balances were obtained from the records of Very Easy Bazaar on 31 December
2013:
2013
R
Cash Sales 9 000
Credit Sales 20 000
Purchase returns 1 300
Sales returns 1 800
Carriage on sales 1 200
Carriage on purchases 500
Credit purchases 15 000
Cash purchases 6 200
Inventory 01/01/2013 3 500
Inventory 31/12/2013 4 000
Required:
5.1 Close the relevant accounts with journal entries and set off the relevant accounts
against the cost of sales account. (16)
5.2 Calculate the Gross Profit in the trading account. (4)
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QUESTION 6 [20]
The following balances of Taz traders are given to you:
2013
R
2012
R
Sales 400 000 500 000
Purchases 260 000 360 000
Opening stock 120 000
Closing stock 130 000
Sales returns 40 000
Purchase returns 10 000
Required:
Calculate the closing inventories on 31 December 2013, assume gross profit is stays the same
for both years.
Hint: to be able to do this, you should first do the trading statement for the year ended
31 December 2012 and calculate the gross profit.
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QUESTION 7 [20]
During the night of 11 May 2013, a fire broke out in the buildings of Sithole Retailers. Inventories
with a selling price of R570 were stored on other premises and, therefore, not destroyed. All
other inventories were destroyed.
The investigation shows the following:
R
Inventories 01 January 2013 33 000
Transactions for the period 01 January 2013 to 11 May 2013:
Sales journal 501 600
Sales column in cash receipts journal 239 400
Purchases journal 285 342
Purchases column in cash payments journal 98 040
Purchase returns journal 18 240
Additional Information:
1. Merchandise invoiced at R399 to Sithole Retailers was recognised in the purchases
journal on 11 May. Sithole Retailers received this merchandise only on 13 May.
2. Sithole Retailers sold merchandise amounting to R1 140 on 11 May 2013 and
recognised it in the sales journals on the same date. This merchandise should, however,
be delivered on 13 May 2013.
3. The policy of Sithole Retailers is to maintain a profit of 50% on sales.
Required:
Determine the cost of the inventories destroyed by the fire.
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CHAPTER 5
DISPOSAL OF PROPERTY PLANT AND EQUIPMENT
QUESTION 1 [20]
An item of machinery was purchased on 1 April 2010 for R100 000. The same item of
machinery was traded in on a new model on 30 June 2013 and R60 000 was received as a
trade in. The depreciation policy on machinery is 20% per annum, based on the diminishing
balance method. The financial year-end is 31 December.
1.1 Calculate the depreciation for years 2011, 2012 and 2013 respectively. (18)
1.2 Determine whether upon disposal of the asset, if a profit or loss exist. (2)
QUESTION 2 [20]
The following balances were extracted from the books of DCC Manufacturers at 30 June 2013
Machine A at cost R500 000
Machine B at cost R450 000
Accumulated depreciation: Machine A ?
Accumulated depreciation: Machine B R100 000
Additional Information:
1) Machine A and Machine B were acquired on 1 November 2011.
2) Depreciation on machinery is provided for at 20% p.a. according to the diminishing
balance method.
3) On 30 November 2012 DCC Manufacturers traded in Machine A at R200 000 for a
new improved machine with a cost price of R600 000. The balance is interest free and
will be paid in three equal instalments. Installation costs of R200 000 was paid in cash
and production with the new machine started on 1 December 2012.
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Required:
Prepare the following accounts in the General Ledger of DCC Manufacturers:
a) Machinery (5)
b) Accumulated Depreciation (5)
c) Depreciation (5)
d) Asset Disposal (5)
NB: All workings must be shown
QUESTION 3 [10]
Beta Foil Manufacturers is a firm specializing in the manufacturing of foil chocolate wrappers
and chip packets. The accounting department personnel of Beta Foil Manufacturers provided
the following financial information on 31 December 2013:
Type of
asset
Cost Date of
purchase
Residual
value
Depreciation
method
Rate of
depreciation
Machine A R1 200 000 01 January
2010
R50 000 Straight line 20% p.a.
On 01 January 2013, without disrupting operations, Machine A was improved. After the
improvements had been made the firm decided to re-estimate the depreciation rate for Machine
A as follows:
Type of
asset
Improvement
Cost
New useful
life from 01
Jan 2013
Residual
value
Depreciation
method
Rate of
depreciation
Machine A R490 000 5 years R80 000 Straight line 20% p.a.
On 01 October 2013, Machine A broke down and was damaged beyond repair. The insurance
company was prepared to pay only R55 000.
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Required:
Prepare the Asset Disposal Account as it would appear in the general ledger after necessary
general journal entries have been recorded and posted. (Show all workings).
QUESTION 4 [15]
Lumber Ltd commenced with the manufacturing of furniture products in 2013 at a new plant.
The plant was purchased on the 1 January 2013 for R700 000. During January 2013, some
equipment was installed and other equipment was modified. Installation and modification costs
incurred amounted to R130 000. For security reasons a fence was erected at the plant at a cost
of R20 000. The plant was ready for use on 1 February 2013. An opening function was held in
the plant on 15 February 2013 at a cost of R50 000 in order to entertain customers and to
introduce the new products to be manufactured at this plant. Production only started on
1 March 2013.
The plant has a useful life of 10 years and the residual value was estimated at R200 000.
Expected dismantling costs amount to R140 000 (discounted present value of dismantling costs
equals R100 000).
At the end of August 2013 heavy rain caused severe damage to the plant, the plant stood idle till
December 2013. On 28 December it was decided by management to sell the plant
for R500 000.
The company’s year-end is 31 December.
Required:
4.1 Calculate the cost of the plant. (3)
4.2 Calculate depreciation for the year ended 31 December 2013. (8)
4.3 Determine whether upon disposal of the asset, if a profit or loss exist. (4)
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CHAPTER 6
PARTNERSHIPS
QUESTION 1 [20]
The following balances appeared, amongst others, in the accounting records of ND Partners on
30 June 2013:
DEBIT CREDIT
Profit 53 175
Capital
Nicola 40 000
Devina 50 000
Current Accounts
Nicola 20 000
Devina 10 000
Drawings
Nicola 15 000
Devina 5 000
Additional Information
1. Partners are entitled to 8% interest per annum on their capital and 6% interest per
annum on the balance of their current accounts, as at the beginning of the year.
2. The partnership agreement stipulates that partner Devina will receive annual
commission of 15% on profit
3. Nicola and Devina share profits or losses in ratio to their capital after all adjustments
4. No salaries are paid to partners
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Required:
1.1 Journalise the profit sharing between the partners. (4)
1.2 Prepare the following ledger accounts:
1.2.1 Current Account for Nicola. (4)
1.2.2 Current Account for Devina. (4)
1.3 Prepare the Statement of Changes in Equity for the year ended 30 June 2013. (8)
QUESTION 2 [30]
Jan and Piet trade in partnership as JP Traders. The following is their trial balance for the year
ended 31 December 2013:
DEBIT CREDIT
R R
Capital
Jan 18 000
Piet 14 000
Current Accounts
Jan 2 600
Piet 8 000
Drawings
Jan 1 892
Piet 2 000
Vehicles 30 000
Furniture 20 000
Accumulated depreciation: Vehicles
01/01/2013
15 000
Accumulated depreciation: Furniture
01/01/2013
6 000
Vat payable 3 610
Inventories 10 000
Debtors 20 008
Creditors 30 000
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Bank 13 610
Purchases 80 000
Freight 1 600
Salaries 30 000
Printing 300
Sales 120 000
Rates 600
Repairs 2 000
214 610 214 610
Additional Information
1. The value of inventory on 31 December 2013 was R 15 000
2. Depreciation must still be provided for as follows:
Vehicles at 10% per annum on cost
Furniture at 15% per annum on diminishing balance method
3. R 228 must be written off as irrecoverable and a provision of R89 for bad debts must be
created
4. Salaries of R 3 000 were outstanding which was paid on the 31 December 2013, this
was however credited to creditors
5. Stationery on hand as at 31 December 2013 was R100
6. The partnership agreement stipulates the following:
6.1 Partners will receive 10% interest on capital annually and 8% interest allowed on
current accounts
6.2 Jan will receive a salary of R 3 000 per annum and Piet a salary of R 5 000
6.3 Jan and Piet divide profits or losses in the ratio of 1:2
Required:
2.1 Prepare the Statement of Comprehensive Income for the year ended
31 December 2013. (12)
2.2 Prepare the Statement of Changes in Equity for the year ended 31 December 2013. (12)
2.3 List the essential elements of a partnership agreement. (6)
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QUESTION 3 [45]
The following information was extracted from the books of BRADSPIT STORES, a partnership
business with partners B. Brad and S. Spit, on 28 February 2014, the last day of the financial
year-end.
PRE ADJUSTED TRIAL BALANCE OF BRADSPIT STORES AT 28 FEBRAURY 2014.
DEBIT CREDIT
R R
Capital: B Brad 90 000
Capital: S Spit 60 000
Current Account: B Brad (01.03.2013) 15 400
Current Account: S Spit (01.03.2013) 4 800
Drawings: B Brad 28 600
Drawings: S Spit 32 100
Loan: ABSA (18% p.a.) 25 000
Land and Buildings at cost 160 000
Equipment at cost 73 000
Vehicles at cost 85 000
Accumulated Depreciation-Equipment
(01.03.2013)
21 900
Accumulated Depreciation-Vehicles
(01.03.2013)
30 600
Inventory 56 240
Trade Debtors 43 975
Provision for Bad Debts 2 750
Trade Creditors 31 000
Bank 570
Petty Cash 250
Cash Float 1 000
Sales 683 605
Sales Returns 18 230
Cost of Sales 276 420
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Salaries 123 000
Rates 8 000
Municipal Services 1 570
Advertising 12 700
Discount Received 1 230
Bad Debts 585
Packing Material 4 130
Insurance 7 300
Rent Income 7 700
Bank Charges 1 050
Interest on Overdraft 2 670
Interest on Loan 4 125
Stationery 3 120
Other Expenses 21 890
969 755 969 755
Additional Information:
1) Goods to the value of R4 200 were delivered to the premises of a customer on
28 February 2014. The cost price of the goods was R2 900. No entry has been made
for this transaction.
2) The physical inventory taken on 28 February 2014 reflected the following items on hand:
Trading inventory R52 670
Packing materials R 940
3) Provide for outstanding interest on loan.
4) Insurance included a premium of R3 600 for the period 1 November 2013 to
31 October 2014.
5) On 25 February 2014, B. Brad took stationery with a value of R90, for personal use. No
entry had been made for this transaction.
6) The monthly rent for February 2014 had not yet been received.
7) The account of a debtor, D. Daniel, who owed R270, must be written off.
8) The provision for bad debts must be adjusted to 5% of debtors.
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9) Provide for depreciation as follows:
Equipment – R10 950
Vehicles - R10 880
10) The partnership agreement stipulated the following:
a. Each partner is entitled to a monthly salary of R2 500
b. The partners are to receive interest at the rate of 10% p.a. on the capital
invested. NOTE: B. Brad had increased his capital by depositing an additional
amount of R30 000 into the business bank account on 31 August 2013.
c. The remaining profit/loss is to be shared in proportion of the capital balances of
the partners at the end of the financial year.
Required:
3.1 The Statement of Comprehensive Income for year ended 28 February 2014. (15)
3.2 Prepare the following accounts:
a) Current Account: B. Brad (7)
b) Current Account: S. Spit (7)
3.3 The Statement of Changes in Equity for 28 February 2014 (16)
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QUESTION 4 [35]
Kit and Kat trade in partnership as KitKat Traders. The following is their trial balance for the year
ended 31 December 2012:
DEBIT CREDIT
R R
Capital
Kit 30 000
Kat 50 000
Current Accounts
Kit (01 January 2012) 7 500
Kat (01 January 2012) 5 400
Drawings
Kit 2 500
Kat 5 700
Motor vehicle at cost 145 000
Furniture and Fittings at cost 75 000
Accumulated depreciation: Motor
vehicles (31 December 2011)
25 000
Accumulated depreciation: Furniture and
Fittings (31 December 2011)
15 000
Mortgage Loan at 15% 75 000
Fixed deposit at 12% 60 000
UIF payable 4 500
Inventory (01 January 2012) 20 000
Debtors 23 350
Creditors 15 550
Bank 14 000
Purchases 155 000
Import duty 2 300
Purchase returns 6 300
Salaries 40 000
Settlement discount 1 200
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Stationery 900
Sales 370 600
Rent expense 11 000
Repairs 4 300
Sales Returns 5 600
Insurance 24 000
597 350 597 350
Additional Information:
Year-end adjustments
1. The value of inventory at 31 December 2012 was R 15 000.
2. Goods to the value of R3 200 were delivered to a customer on the 31 December 2012.
3. Depreciation must still be provided for as follows:
Motor vehicles at 20% per annum on cost method.
Furniture and Fittings at 15% per annum on diminishing balance method, Note new
furniture was purchased on 31 June 2012 for R5 000.
4. R 250 must be written off as irrecoverable and a provision of R159 for bad debts must
be created.
5. Salaries of R 3 000 were outstanding which was paid on the 31 December 2012; this
was however debited to creditors and credited to bank.
6. Stationery on hand as at 31 December 2012 was R100.
7. Interest on mortgage loan is still outstanding for the year.
8. Interest on fixed deposit is still receivable for the year.
9. Rent expense paid above is for 11 months.
10. Insurance is paid for the period 30 June 2012 to 01 July 2013.
11. Land & Buildings consist of shop 1a purchased on 20 January 2013 for R90 000. The
policy for KitKat Traders is not to depreciate Land & Buildings.
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Terms of partnership agreement
12. Partners will receive 10% interest on capital annually and 8% interest allowed on current
accounts.
13. Interest is to be charged at 5% on partner’s drawings accounts.
14. Kit will receive a salary of R 3 000 per annum.
15. Kat will receive 10% annual commission on the profit after all adjustments.
16. Kit and Kat divide profits or losses in the ratio of 3:5.
Required:
4.1 Prepare the Statement of Changes in Equity for 31 December 2012. (20)
4.2 Prepare the Property, plant and equipment note for 31 December 2012. (15)
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QUESTION 5 [40]
Mr House and Ms Flat started a property investment partnership in 2007 in a profit sharing
ratio 3:2. At the end of the financial year on 01 January 2013, the balances in the capital
accounts were as follows:
Mr House Mr Flat
Capital account 1 260 000 850 000
In December 2013 Mr House passed away and the partnership had to be dissolved. The
following information pertains to the dissolution:
a) The assets of the partnership realised R7 400 000, the carrying value of the assets were
R6 200 000.
b) Long term liabilities of R4 000 000 and current liabilities of R30 000 were settled.
c) Costs of R100 000 were incurred to realise the assets.
d) The net profit for the year was R185 500.
e) A loan from Mr House, treated as an external loan, of R60 000 was settled.
f) The partners drew the following amounts from the partnership over the year, House
R1 500 per month and Flat R1 000 per month.
g) The bank balance before the dissolution was R110 000.
All transactions with partners are recorded in their capital accounts.
Required:
Prepare the Appropriation, Capital and Bank accounts for the dissolution of the partnership.
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CHAPTER 7
CLOSE CORPORATIONS
QUESTION 1 [20]
Answer the following questions:
1. What are the benefits of a close corporation over a private company? (6)
2. Mark and Ajith started a water delivery business together in the form of a CC.
Mark contributed cash at incorporation of R5 000 and Ajith a scooter to the value
of R3 000. The profit sharing ratio was agreed to be 1:1, and salaries were paid
to Mark and Ajith of R61 000 and R55 000 respectively. Profits for the year
amounted to R50 000 and a distribution of R30 000 was agreed upon and paid
on the last day of the year. Mark is an avid theatre-goer and therefore withdraws
all his amounts immediately, while Ajith has another job and leaves his share in
the CC as a short term loan.
2.1 Process the journal entry to record the receipt of capital at incorporation of the
Close Corporation. (4)
2.2 Process the journal entry to record the salaries paid by the Close Corporation
to each member. (4)
3. Briefly discuss whether a distribution of a CC is different from a dividend paid by a
company. (3)
4. Briefly explain why a member would choose to contribute at the incorporation of a
CC through a member’s loan account rather than a member’s contribution account. (3)
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QUESTION 2 [20]
The member’s interest of Goldilox CC as at 28 February 2014 was as follows:
Taj 50%
Ally 25%
Tari 25%
Members Contribution 54 000
Retained Earnings 10 000
Net assets value 64 000
On 28 February 2014 Taj resigns and sells his interest to the CC for R 30 000
Required:
3.2 Journalise the above transaction. (2)
3.3 Prepare the Statement of Financial Position as at 28 February 2014. (10)
3.4 Prepare the Statement of Changes in Net Investment for 28 February 2014. (8)
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QUESTION 3 [30]
You are the accountant and member of Riviera CC. On 30 September 2013, the following
information was available.
RIVIERA CC
2013
R
2012
R
Land and buildings 700 000 600 000
Machinery at carrying amount 250 000 200 000
Vehicles at carrying amount 400 000 600 000
Retained earnings at beginning of the year ? 30 000
Profit for the year 130 000 150 000
Surplus on revaluation of land and buildings 90 000 50 000
Member’s contribution 240 000 210 000
Additional Information
1. The members of Riviera CC are Mr Fitz, Mrs Fitz and Mr Gerald with interests of 45%,
30% and 25% respectively.
2. On 01 February 2013, Mrs Fitz donated a vehicle with a value of R30 000 to the CC.
This donation serves as an additional members’ contribution.
3. Salaries of R40 000, R30 000 and R35 000 were paid to Mr Fitz, Mrs Fitz and Mr Gerald
respectively.
4. On 30 September 2013 and 30 September 2012 profits of R120 000 and R100 000
respectively were distributed to members in the ratio of their interests.
Required:
3.1 Prepare the Statement of Changes in Net Investment for September 2013. (24)
3.2 List 3 professional bodies whose members qualify for appointment as an
accounting officer of close corporation. (6)
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QUESTION 4 [30]
The following information was extracted from the books of TASCO CC, on 31 December 2013,
the last day of the financial year.
TASCO CC
TRIAL BALANCE AS AT 31 DECEMBER 2013
DEBIT CREDIT
Member’s Contribution: TAU 160 000
Member’s Contribution: OLI 40 000
Land and Buildings at cost 520 000
Equipment at cost 55 000
Vehicles at cost 125 000
Accumulated depreciation on equipment
(01/01/2013)
10 000
Accumulated depreciation on vehicles (01/01/2013) 65 000
Debtors Control 23 000
Creditors Control 42 000
Bank 17 500
Fixed Deposit 70 000
Mortgage Loan 250 000
Provision for bad debts 1 650
Retained Earnings (01/01/2013) 30 500
SARS Income tax 49 000
Loan to OLI 50 000
Loan from TAU 60 000
Sales 602 000
Purchases 225 000
Inventory (01/01/2012) 25 000
Salary : TAU 50 000
Salary: OLI 20 000
Settlement discount granted 1 550
Stationery 2 500
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Carriage on purchases 6 500
Telephone and faxes 10 200
Subscription fee 1 200
Insurance 5 500
Repairs 4 200
1 261 150 1 261 150
Additional Information
1. The inventory at 31 December 2013 amounted to R 43 000
2. Included in sales is an amount of R 7 000 received on 31 December 2013 for a deposit
on an order to be completed during the next financial year.
3. Provision for bad debts must be adjusted to R1 500
4. Bad debts written off must be R 1 500
5. Land & Buildings consist of shop 1a purchased on 20 January 2013 for R90 000. The
policy for Tasco CC is not to depreciate Land & Buildings
6. Deprecation must still be provided as follows:
Vehicles 20% pa on diminishing balance method
Equipment 10% pa on cost
7. All settlement discounts were claimed
8. Water and electricity is still outstanding at year end, R4 000
9. Insurance above is only recorded for 11 months
10. Provision still has to be made for interest on the fixed deposit at 15% p.a. receivable on
the 01 January 2014.
11. Interest on mortgage loan must still be provided at 10% pa, 40% of the loan will be
repaid on 01 August 2014.
12. The loan to member OLI was granted on the 01 June 2013 and interest of 12% p.a. must
be calculated.
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13. The members decided to distribute 30% of the profit of the close corporation, after
taxation, in proportion to their contribution. These amounts will not be paid out in cash
but will be left in the close corporation as loans to the corporation. These loans are
unsecured and an interest rate of 20% p.a. is applicable. It was further decided that 50%
of these loans must be repaid on 31 March 2013. The balances on these accounts are
repayable on 31 December 2020.
14. Actual Income Tax for the year is R 89 850.
Required:
4.1 Prepare the Statement of Comprehensive Income for 31 December 2013. (20)
4.2 Prepare the Statement of Changes in Net Investment for 31 December 2013. (10)
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CHAPTER 8
COMPANIES
QUESTION 1 [20]
Scenario 1
Stress Management Ltd was registered on the 01 June 2013 with an authorised share capital
consisting of 100 000 ordinary shares of R3 each. The company offered 20 000 ordinary shares
at par value to the founders of the company, all of which were taken up and paid for on the
01 August 2013. The company offered 40 000 ordinary shares at par value to the public.
Applications closed on the 30 September 2013, all shares were taken up by the public.
Scenario 2
Dogs Breakfast Ltd decided to raise further capital and therefore invited the public to subscribe
to 25 000 shares at R3.50 (par value R2.00). Subscriptions and applications for R20 000 shares
were received. The directors decided to allot the shares. The directors of the company declared
a dividend of R1.50 per share. The company paid R12 000 towards share issue expense.
Required:
Prepare the journal entries in the general ledger for each of the above scenarios. Narrations are
not required.
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QUESTION 2 [25]
Eland Limited was founded ten years ago with an authorized share capital of 1 400 000 shares.
The following balances were obtained from the records of the company as at 30 June 2013:
Ordinary share capital (700 000) R350 000
Retained Earnings R 22 000
During the reporting period until 30 June 2013 the following occurred:
1. On 01 October 2012 600 000 unissued ordinary shares were presented to the
public at R420 000. Until the closing date R427 000 were received. The shares
were proportionally allotted to the applications and surplus application money was
refunded.
2. On 01 January 2013 Sayed Entity (consisting of a motor vehicle at R190 000,
receivables R40 000 and payables of R50 000) was acquired by Eland Limited at
a price equal to the net asset value of the entity. The purchase price was settled
with R260 000 cash and 50 000 ordinary shares.
3. Profit for the year amounted to R10 800.
Required:
2.1 Journal entries in the records of Eland Limited for 1 and 2 above. (4)
2.2 Prepare the Statement of Changes in Equity for the year ended 30 June 2013. (15)
2.3 Show the Equity section of the Statement of Financial Position with applicable
notes as at 30 June 2013. (6)
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QUESTION 3 [30]
You are provided with information relating to Prime Limited for the year ended 28 February 2013
Figures extracted from the Pre-Adjusted Trial Balance on 28 February 2013
R
Ordinary share capital (R10 per share) 3 200 000
Fixed deposit 280 000
Vehicles 780 000
Equipment 350 000
Accumulated depreciation on vehicles 468 000
Accumulated depreciation on equipment 105 000
Inventory 325 000
Debtors control 65 000
Provision for bad debts 3 700
Mortgage loan from Quick Bank (12 % p.a.) 440 000
Sales 2 900 000
Sales Returns 18 500
Cost of sales 1 650 000
Rent income 200 700
Interest on mortgage loan 126 000
Directors fees 315 000
Auditors fees 30 000
Salaries and wages 372 000
Consumable stores 62 500
Bank charges 7 200
Sundry expenses 30 000
Bad debts 1 500
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Additional Information:
1. Inventory on hand according to a physical stock take on 28 February 2013 amounted to
R318 500.
2. The stock take revealed that the value of consumable stores used was R60 000.
3. The following entries appeared on the February bank statement but had not yet been
recorded in the books of the company:
a) Bank charges, R3 600.
b) A direct deposit by a debtor which had been written off as a bad debt in the previous
financial year, R1 900.
4. The account of H Howard, a debtor, must be written off as irrecoverable, R1 000.
5. Provision for bad debts must be adjusted to R3 200.
6. The interest on the loan for February 2013 has not yet been entered and no payment for
February has been made. Interest is capitalised.
7. Provide for depreciation as follows:
Vehicles at 20% p.a. on cost
Equipment at 15% p.a. on the diminishing balance method
8. The book keeper has made an error on 01 March 2012, a new issue of 20 000 ordinary
shares at R10.60 were recorded, but the share premium was not recorded. Authorised
share capital is 400 000 ordinary shares.
9. An interim dividend of 32 cents per share was paid, while final dividends declared was
24 cents per share.
10. Income tax is calculated at 30% of the net profit.
Required:
3.1 Prepare the Statement of Comprehensive Income for 28 February 2013. (20)
3.2 Prepare the Equity and Liabilities section for the Statement of Financial Position. (10)
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QUESTION 4 [30]
You are provided with the pre-adjustment trial balance of Dunhill Enterprises Ltd. on
28 February 2014 together with a list of adjustments. All the authorized share capital has been
issued.
DUNHILL ENTERPRISES LTD
PRE ADJUSTED TRIAL BALANCE FOR 28 FEBRUARY 2014
DEBIT
R
CREDIT
R
Ordinary share capital (R2 par value each) 850 000
Share premium 40 000
Retained income 173 000
Loan from Umgeni Lenders 84 500
Equipment 190 000
Vehicles 580 000
Accumulated depreciation on equipment 182 000
Accumulated depreciation on vehicles 136 000
Shares in Uptown Ltd. 240 000
Fixed Deposit 220 000
Inventory 429 000
Debtors Control 68 000
Provision for bad debts 3 000
Bank 51 200
Cash float 1 000
Petty cash 400
Creditors Control 51 800
Creditors for salaries 11 680
Pension fund 4 420
Medical aid fund 1 750
SARS (PAYE) 4 650
SARS (Income tax) 52 600
Sales 1 934 000
Sales returns 11 000
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Cost of sales 1 126 000
Advertising 7 300
Audit fees 25 000
Bad debts 5 300
Commission income 88 000
Interest on current account 900
Directors fees 155 000
Income from investments (dividends
received)
38 400
Insurance 17 400
Interest on fixed deposit 16 400
Packing materials 14 400
Rent expense 77 650
Salaries and wages 255 000
Vehicle expenses 34 800
Sundry expenses 16 950
Dividends on ordinary shares 42 500
Additional Information:
1. The bookkeeper has made an error on 1 March 2013 A new issue of 50 000 ordinary
shares at R2, 60 each has been recorded, but the share premium has been incorrectly
credited to the retained income account. The par value was correctly recorded. The
authorized share capital comprises 600 000 ordinary shares of R2 par value.
2. An old delivery vehicle was sold for R9 000 on 31 January 2014 but no entries have
been put through. The cost price of the vehicle was R51 000 and the accumulated
depreciation up to 1 March 2013 amounted to R36 400. Vehicles are depreciated at 20%
p.a. on cost. The purchaser has posted a cheque but it has not yet been received.
3. Depreciate equipment by 10% p.a. on cost (N.B. Inspect the cost and
Accumulated depreciation before you arrive at your answer.)
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4. A debtor returned defective stock with a selling price of R4 300 and a cost price of
R2 600. The stock was then returned to the suppliers, but no entries have been made.
5. During a burglary at the shop, stock costing of R14 000 was stolen. The insurance
company has agreed to pay out an amount of R11 000, but this has not yet been
received.
6. An employee was inadvertently omitted from the salaries journal. His details are as
follows:
Gross salary R6 800
PAYE deduction 18%
Pension deduction 7, 5%
Medical aid deduction R320
The business contributes on a rand-for-rand basis to the pension and medical funds.
The employer’s contributions are also debited to the Salaries and Wages account.
7. All the insurance premiums have been paid up to 31 May 2014. Appropriate reversal
were put through at the beginning of the year for prepayments last year.
8. The loan statements from Umgeni Lenders reflect the following:
Balance at the beginning of the year R130 000
Repayments during the year, including interest 45 500
Balance at the end of the year 103 500
Repayments of the loan over the next year excluding
interest 26 000
No entries have been made for interest during the year. Interest is capitalized to the
loan.
9. Further dividends of R20 400 are receivable from Uptown Traders Ltd at year-end.
10. The physical count at year end revealed the following on hand:
Trading stock R411 600
Packing materials 1 800
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11. The provision for bad debts is to be decreased by R600.
12. The rent has been paid one month in advance. N.B. the monthly rent increased by R450
on 1 November 2013.
13. A supplier has overpaid commission to Dunhill Enterprises, R2 200. This will be off-set
against future commission.
14. One of the fixed deposits, R75 000, matures within six months. The other fixed deposit
matures in 18 months’ time.
15 Further amounts are owed to the auditors, R3 000, and the two directors, R8 000 each.
16 A final dividend of 15 cents per share has been recommended by the directors.
17 Provide for income tax at 30% of the net income.
Required:
4.1 Prepare the Statement of Comprehensive Income for 28 February 2014. (18)
4.2 Prepare the Statement of Financial Position with the relevant notes
as at 28 February 2014. (12)
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CHAPTER 9
CASH FLOW STATEMENTS
QUESTION 1 [25]
The bookkeeper of Mobile Telephone Sales Ltd has provided you with the following balances
that have been extracted from the annual financial statements for the year ended 28 February
2013. The bookkeeper is interested to know whether the normal trading activities of the
business have generated sufficient cash to pay all its non-discretionary expenses during the
year.
2013 2012
Sales 1 204 000 1 139 600
Cost of sales 586 250 553 700
Noncurrent assets (carrying value) 240 000 180 000
Rent income 48 000 36 000
Operating expenses 564 200 532 350
Accrued interest expense 0 2 400
Profit on sale of asset 10 500 0
Long term loan (liability) 52 500 42 000
Trade receivables 14 000 26 250
Trade payables 24 500 31 500
South African Revenue Services (Income tax) 8 750 (Dr) 17 500 (Cr)
Shareholders for dividend 30 000 3 500
Share capital at 50c par value 300 000 175 000
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Additional Information:
The following additional information had been made available for the 2013 financial year:
a) Non-current assets with a carrying value R35 000 were sold for cash.
b) The company declared a final dividend of R30 000 on the last day of the current financial
year. An interim dividend of R22 000 had been declared on the 31 August 2012 and paid
in cash on 23 September 2012.
c) The bookkeeper estimated that the company would be liable for income tax to the
amount of R34 000.
d) Rent income earned during the year has been received and no amounts were
outstanding or prepaid as at 28 February 2013.
e) The following amounts are included in operating expenses:
Depreciation 89 500
Employee cost 189 900
Interest expense 7 350
Required:
Prepare ONLY the Cash Flow from operating activities section of the statement of cash flows
UNDER THE INDIRECT METHOD for the year ended 28 February 2013. (25)
Notes are required. Comparatives are not required.
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QUESTION 2 [30]
The following information relates to Jozini Ltd for the year ended 30 June 2012:
EXTRACTS FROM THE STATEMENT OF FINANCIAL POSTION AND NOTES
2012 2011
Ordinary Share Capital (par value R4 each) 3 000 000 2 750 000
Share Premium 50 000 20 000
Retained Income 860 000 700 000
Mortgage Loan from Umtata Bank 410 000 450 000
Land and Buildings 3 148 000 3 120 000
Equipment at Cost 789 000 640 000
Accumulated Depreciation - Equipment 209 000 140 000
Investment in Fixed Deposit 260 000 190 000
Trading Stock 355 000 450 000
Trade and Other Receivables (excluding items listed
separately)
150 000
115 000
SARS (Income Tax) (Dr) 15000 (Cr) 60 000
Cash at Bank 240 000 0
Petty Cash 10 000 5 000
Trade and Other Payables (excluding items listed
separately)
248 000
89 500
Deferred Income 10 000 8 000
Shareholders for Dividends 180 000 192 500
Bank Overdraft 0 110 000
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EXTRACTS FROM THE STATEMENT OF COMPREHENSIVE INCOME
2012 2011
Net Profit Before Tax 1 100 000 1 500 000
Income Tax 520 000 700 000
Interest on Loans ? 43 000
Depreciation 80 000 70 000
Additional Information:
1. The loan statements received from Umtata Bank reflect the following:
Balance of loan on 1 July 2011 R450 000
Interest capitalized R ?
Payments by Jozini Ltd during the year to cover interest and loan R 91 000
Balance of loan at the end of 30 June 2012 R410 000
2. Equipment was sold at book value, R18 000.
(The cost price was R29 000, and the accumulated depreciation
was R11 000 at the date of sale).
3. Improvements were done to the office reception area.
4. The new shares were issued at the beginning of the year.
5. An interim dividend of 32 cents per share was paid while, final dividends declared were
24 cents per share.
Required:
2.1 Prepare the Cash Flow Statement with the notes for the year ended 30 June 2012. (25)
2.2 During the year, Jozini Ltd was able to improve their cash situation and pay
dividends. Explain how they were able to do this when the net income decreased. (5)
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QUESTION 3 [30]
The following balances of Inspired Ltd as at 30 June 2013 are submitted to you.
INSPIRED LIMITED
EXTRACT OF STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013
2013
R
2012
R
Share Capital 520 000 400 000
Bank account (debit balance) 0 80 000
Investment in Rea Limited at fair value 180 000 100 000
Receivables 100 000 140 000
Payables 180 000 220 000
Machinery at cost 420 000 600 000
Retained earnings 240 000 340 000
Bank overdraft 60 000 0
Fixed property 200 000 40 000
Inventories 360 000 120 000
Accumulated depreciation on machinery 280 000 320 000
The following transactions amongst others, took place during the year:
a) Machinery with a cost of R200 000 and a carrying amount of R60 000 was scrapped
during the year. Machinery with a carrying amount of R160 000 was sold for R240 000.
The company bought machinery with a cost of R300 000.
b) During the current year an amount of R220 000 was written off as depreciation.
c) The company declared dividends of R140 000 of which R120 000 was paid. The balance
is included in payables.
d) Income tax expense amounted to R18 000 for the year and has been paid.
e) On 30 June 2012 there were no amounts owing for dividend or tax.
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f) An investment of 10 000 ordinary shares was held in Rea Limited on 01 July 2012.
During the year another 40 000 ordinary shares was obtained for R70 000 in Rea
Limited. Dividends received amounted to R10 000.
g) Interest of R5 000 was paid during the year.
h) Sales amounted to R750 000 for the year.
Required:
3.1 Calculate the profit before tax. (10)
3.2 Prepare the Cash flow Statement with notes for the year ended 30 June 2013. (20)
QUESTION 4 [20]
Outdoor Stores is an adventure group that offers personalized adventure vacations, both to the
domestic and international market.
The owner has been given the option of buying up a small competitor that has been extremely
successful in attracting the Japanese market. The competitor is asking a cash price of R350
000. Outdoor Stores is able to raise a loan of R150 000 and requires a positive cash balance of
R50 000 at the start of next year. The business had R24 000 in the bank account at 01 January
2013. There were no capital expenditure during the year, however the owner withdrew R10 000
for personal use.
Extracts of the Statement of Comprehensive Income and Statement of Financial Position is
presented below:
Statement of Comprehensive Income for the year ended
31 December 2013
R
Revenue 464 400
Less Expenses: 253 300
Net Income 211 100
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Extract of Statement of Financial Position as at
31 December 2013
2013
R
2012
R
Prepaid Expenses 0 12 150
Accrued Expenses 31 200 0
Deferred Income 0 51 400
Accrued Income 337 500 0
Assume that the 2012 prepaid expense and deferred income items became expenses and were
earned in the 2013 year and the accrued items were either received in cash or were paid in the
2013 year.
Required:
Determine whether Outdoor Stores had sufficient cash on hand to purchase the new business
venture.
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CHAPTER 10
BANK RECONCILIATION
QUESTION 1 [25]
You are provided with information relating to Ace Traders for September 2013:
Information on 30 September 2013:
Balance prior to doing the Bank Reconciliation
Balance of the Bank Account in the Ledger on 30 September 2013 60 000
Balance as per Bank Statement on 30 September 2013 17 600
Difference 42 400
Individual differences noticed between the books of Ace Traders and the Bank Statement
for September 2013:
No Details Amount
R
1. Cheque No. 657, dated 2 March 2013, still not reflected in Bank
Statement
2 000
2. Deposit, dated 11 September 2013, not reflected in Bank Statement 43 000
3. Dishonoured cheque, originally received from a debtor on 15
September 2013, reflected in Bank Statement but not in the journals
9 500
4. Cheque No. 931, dated 18 September 2013, not reflected in Bank
Statement
4 800
5. Cheque No. 936, dated 30 October 2013, not reflected in Bank
Statement
10 200
6. Deposit, dated 28 September 2013, not reflected in Bank Statement 5 700
7. Bank charges in Bank Statement, but not in the journals 1 200
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Required
1.1 Calculate the correct bank balance of Ace Traders on 30 September 2013. (15)
1.2 Use the information above to prepare the Bank Reconciliation Statement
of Ace Traders. (8)
1.3 Refer to the outstanding deposit of R43 000, dated 11 September 2013.
Why should the internal auditor be concerned? (2)
QUESTION 2 [25]
The following information relates to SMASHDOWN PRINTERS,
Bank Reconciliation as at 31 January 2013
DR CR
Bank account balance 1 658
Outstanding cheques
Cheque 314 1 376
Cheque 319 786
Cheque 333 538
Outstanding deposits 1 540
Balance as per bank statement 498
3 198 3 198
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TOTALS OF COLUMNS IN CASH JOURNALS ON 28 FEBRUARY 2013:
CASH RECEIPTS JOURNAL R
Bank 21 705
Debtors control 5 378
Sales 18 769
CASH PAYMENTS JOURNAL R
Bank 17 555
Creditors control 4 200
On comparing the February bank statement with the cash journals and the January bank
reconciliation the following were noted:
1. Cheque no 314 which was still outstanding was issued to the Blind Charity Club as a
donation. The organization was disbanded and therefore must be cancelled. A cheque
(no. 355) for the same amount must be issued in favour of Community Charity Club on
the 28 February 2013.
2. The deposit that was outstanding was noted on the 07 February 2013.
3. Interest on overdraft amounted to R 215, service fees of R 560 was not recorded on the
cash journals.
4. Cheque no 340 to a creditor was entered incorrectly as R2 500 instead of R1 500 in the
journals.
5. A deposit of R 3 905 only appears in the cash journal.
6. A client (debtor) settled his debt by handing over a cheque of R 855; this was
dishonoured on the due date due to insufficient funds.
7. The following cheques were issued but did not appear on the bank statement:
Cheque no 348 R 260 (dated 30 March 2013)
Cheque no 351 R 170 (dated 28 February 2013)
Cheque no 319 R 786 (dated 27 December 2012)
8. A cheque received from a debtor for R 1 300 dated 31 March 2013 appears neither in
the cash journal nor in the bank statement.
9. Cheque no 319 above was misplaced in transit.
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10. A deposit for rent paid by a tenant had not been recorded in the journals, the amount of
R 500.
11. The following debit orders are not recorded in the journals:
Monthly insurance of R 150
Monthly subscription of R 250
12. The bank statement has a favourable balance of R 649 on the 28 February 2013
Required
2.1 Prepare the Bank Account of Smashdown Printers as at 28 February 2013. (15)
2.2 Prepare the Bank Reconciliation statement as at 28 February 2013. (10)
QUESTION 3 [25]
Baseline Traders employs Joe Crook to write up the books, do the bank deposits and issue
cheques. You are required to assist as an internal auditor.
The following information is made available:
At the end of the previous month, 30 September 2013, the following items appeared in the Bank
Reconciliation Statement:
R
Balance per Bank Statement 17 000
Outstanding deposits for cash sales:
- Dated 28 September 2013
- Dated 30 September 2013
30 000
12 400
Outstanding cheques:
- 502 (dated 19 April 2013)
- 613 (dated 24 September 2013)
- 614 (dated 27 September 2013)
6 200
13 400
9 100
Balance per bank account 30 700
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1. The balance on the bank statement is R42 092 (favorable) on 31 October 2013.
2. The provisional totals in the journals for October 2013 before reconciling to the bank
statement are:
Cash Receipts Journal R510 000
Cash Payments Journal R463 600
3. From the bank reconciliation for September 2013 only the outstanding deposit of R12 400
and cheque No. 614 appeared on the October bank statement.
The R30 000 reflected on the deposit slip, dated 28 September, was never deposited into
the bank account by Joe Crook. He cannot account for the whereabouts of the cash.
4. The October bank statement reflected bank charges of R1 310 and interest of R102 on the
favorable bank balance.
5. A dishonored cheque was reflected on the bank statement, R1 700. This was originally
received from a debtor in payment of his account.
6. A direct deposit of R5 500 from a tenant was reflected on the bank statement.
7. As an internal auditor you also detected that cheque No. 642 for R18 000 appeared on the
bank statement, but not in the CPJ. The bookkeeper, Joe Crook, forged the signatures and
used the funds for personal benefit.
8. Cheque No. 633 was reflected in the CPJ as R2 630, but on the bank statement it was
reflected as R6 230. The amount on the bank statement is correct.
9. The following items appeared in the October CRJ and CPJ, but not in the bank statement:
No. 652 – R3 800 (dated 15 November 2013)
No. 655 – R1 300
Deposit of R12 700 for cash sales.
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Required:
3.1 Why does a business prepare a Bank Reconciliation Statement each month? (2)
3.2 Calculate the correct totals in the Cash Receipts Journal (CRJ) and Cash
Payments Journal (CPJ) for October 2013. (6)
3.3 Prepare the Bank Reconciliation Statement on 31 October 2013. (7)
3.4 Refer to Information numbered 4 and 8 above
3.4.1 It appears that Baseline Traders will not be able to recover all amounts,
or part of the amounts, lost due to the fraudulent activities of Joe Crook.
If you were the owner of this business, what steps would you take against
Joe Crook? Provide four steps. (4)
3.4.2 Explain why the rule of prudence will be used in accounting for the fraudulent
activities in the books and the financial statements. (3)
3.4.3 Explain what was wrong with the procedures in the accounting department
which led to this type of fraudulent activity. (3)
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QUESTION 4 [25]
Furniture Frenzy is a furniture business based in George that purchases and sells both wooden
and bamboo furniture and offers a service that restores old wooden furniture. The business
uses the cost model to measure vehicles, the FIFO cost allocation method to measure the cost
of inventory and the perpetual method for recording inventory. The business has a year-end of
31 March 2013.
Extract: Pre-Adjustment Trial Balance of Furniture Frenzy as
at 31 March 2013
Debit Credit
Bank 45 200
The bank reconciliation process identified the following differences between the bank account in
the general ledger and the bank statement for March 2013:
1. Outstanding deposits in the February and March bank account amounted to R3 900 and
R8 400 respectively.
2. On 29 March 2013 Furniture Frenzy incorrectly entered the rent expense EFT payment
for April 2013 of R15 000 as R1 500 in the cash payments journal.
3. The bank statement for March 2013 included, amongst others, the following
transactions:
Bank charges amounting to R478
Direct deposit by a client for restoration income amounting to R3 663 for work completed
on 15 March 2013
Dishonoured cheque for R3 520 that had been received from a debtor and had
been deposited by Furniture Frenzy on 10 March 2012.
Required:
4.1 Prepare the Bank account as it should appear in the general ledger of Furniture
Frenzy on 31 March 2013. (15)
4.2 Identify any amounts that have not been used to update the bank account in
point above and explain how these amounts will be treated in the bank
reconciliation process as at 31 March 2013. (10)
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BIBLIOGRAPHY
Dempsey, A. and Pieters, H.N. (2009), Introduction to Financial Accounting, 7th Edition,
LexisNexis.
Dempsey, A. and Pieters, H.N. (2009), Introduction to Financial Accounting – Questions and
Answers, 7th Edition, LexisNexis.
Kew, J.; Watson, A.; and Carpenter, R. (2012), Financial Accounting The Question Book, 4th
Edition, Oxford University Press.
Sowden-Service, CL. and Kolitz, DL. (2010), GAAP: Graded Questions, 10th edition, LexisNexis.