FEEDBACK TUTORIAL LETTER

Transcription

1 FEEDBACK TUTORIAL LETTER 1 ST SEMESTER 2017 ASSIGNMENT 2 [FAC511S] MAY

2 COURSE: COURSE CODE: FAC511S ASSIGNMENT: 02/2017 DATE: 05/ 2017 Dear Student As we come to the end of the semester, you should have covered all the content necessary to enable you to successfully sit and pass the forthcoming upcoming exams. The overall performance in assignment two was poor, with an average of 45.96% in assignment two compared to an average of 71.06% in assignment one. One contributory factor to this low average was that many students left out complete questions. I would like to encourage you to contact me, as your marker tutor, for guidance in areas where you may have shortcomings. As many students had difficulties in question 2, the assignment was marked out of 71 instead of 75. See below under, the feedback for question two for further explanation. In addition to using your study guide and prescribed/recommend textbook during your exam preparations, I would urge you to use e-learning as an additional resource. Here we have provided quizzes, tests and class notes to support you in your studies. Take note of the following general issues below then utilise the memorandum to review your work. Where you have any queries, don t hesitate to contact me. Question 1 Part A This section was well answered. This is a good indicator of your understanding of the theoretical section of the course content. If you have performed poorly in this section it may be because you have note understood the theory of VAT. I would recommend that you go back to your study material and revise the theoretical aspects of VAT. Part B Again this section was well answered however; many of you lost marks as you did not provide journal narrations. 1

3 Question 2 This question was poorly answered. The key to this question was to take heed of the fact that Inventories are always carried at the lower of cost and net realisable value. In order to calculate the net relisable value of the raw materials, you needed to consider the effect of the price drop on the net relisable value of the finished product. With the exception of 3 or 4 students, none of you took this into consideration. I therefore decided to exclude the marks for the calculation of the cost of Raw Material DOL thus this section was marked out of 6 instead of 10. Question 3 PART A and B This performance in this section was satisfactory. Many of you lost marks for not showing WORKINGS. It was expressly stated in the required that all workings should be shown. 10 marks were allocated towards workings. Due to an error in the question, the Statement of Financial Position will not balance by N$1,480. The discount received in the list of balances should have been discount allowed. Take particular note of the format of the financial statements, including how the title should be presented. Also remember that Property, Plant and Equipment (PPE) should be shown as one line item in the Statement of Financial Position Where a figure is being subtracted in the Statement of Profit or Loss or Statement of Financial position, make sure it is indicated in brackets. e.g. Closing inventory in the Cost of Sales calculation. PART C This was another section that was poorly answered with many leaving it out completely. Where it was answered, many of you did not present the note in the appropriate format. Review your study materials for the proper presentation of the PPE reconciliation note. Feel free to contact me for any queries Regards Calistus Mahindi T: C: E: cmahindi@nust.na 2

4 Assignment 2 QUESTION 1 Part A 1. c 2. b 3. c 4. b 5. a (15 marks) (5 marks) Part B (10 marks) General Journal DR N$ CR N$ Marks 1 Bank 115, Output VAT 15, Sales 100, Cost of sales 80, Inventory 80, Recognising cash sales of goods 1 2 Inventory 90, Input VAT 13, Accounts Payable 103, Purchase of inventory on credit 1 Question 2 3 (6 marks) The key to this question was to take heed of the fact that inventory is measured at the lower of cost or net realisable value (NRV). Product No. of units Cost NRV Inventory valuation Commen t Marks N$ N$ N$ Telebunken radios 5, ,565,000 NRV 1 Product Blush 7,920,000 1 Contracted units 6,800 1,000 1,600 6,800,000 Cost 1 Non-contracted units 1,400 1, ,120,000 NRV 1 Product Jax 1,200 3,000 5,000 3,600,000 Cost 1 Raw material Dol 20, ,000,000 Cost Total Inventory cost 16,085,000 1P

5 Workings Raw material Dol Cost price N$120 Conversion costs Cost Price Kosp N$1000 Less NRV kosp N$940 N$60 Units of Dol per unit of Kosp 3 Conversion cost of Dol N$20 *Two bonus marks awarded to those that correctly calculated the value of Raw Material DOL* Question 3 a. (50 marks) (17 marks) Techno dealers Marks Statement of profit or loss For the year ended 30 June N$ N$ 1 Sales 330,540 1 Less: Cost of sales (254,450) Opening Inventory 62,490 1 Purchases ( ) 247,200 1 Carriage on purchases 3, ,350 Less: closing inventory (58,900) 1 Gross profit 76,090 1 Profit on disposal of vehicle 1,500 1 Discount received Less: expenses (39,155) Stationery ( ) Credit losses ( ) 1,450 1 Depreciation 16,855 1 Rent expense (1200*12) 14,400 1 Interest on long term loan (10000*15%) 1,500 1 Wages 4,560 1 Net profit 39,175 1P 17 4

6 b. (15 marks) Techno dealers Marks Statement of financial position as at 30 June N$ 1 Assets Non- Current Assets Property, Plant and equipment (c) 37,445 1 Current Assets 104,850 Inventory ( ) 58,960 1 Trade receivables ( ) (W2) 45,410 1 Prepaid expenses ( ) Cash and cash equivalents Total Assets 142,295 Equity and Liabilities Equity 90,165 Capital 90,270 1 add: net profit 37,695 1P less: drawings ( ) (37,800) 1 Non-current liabilities Long-term loan 5,000 1 Current liabilities 47,130 Current portion of long term loan 5,000 1 Trade and other payables 34,120 1 Accrued expenses Bank overdraft ( ) 7,360 1 Total equity and liabilities 142,

7 FAC511S c. (8Marks) Property, Plant and equipment reconciliation note Vehicles Equipment Total Marks N$ N$ N$ Carrying amount at beginning of year 31, , , Cost 61, , , Accumulated depreciation (29,500.00) (6,000.00) (35,500.00) 1 Additions 5, , Disposal (2,500.00) (2,500.00) 1 Cost (25,000.00) (25,000.00) Accumulated depreciation 22, , Depreciation (14,700.00) (2,155.00) (16,855.00) 1 Carrying amount at year end 14, , , Cost 36, , , Accumulated depreciation (21,700.00) (8,155.00) (29,855.00) 1 8 Alternate presentation Property, Plant and equipment reconciliation note Vehicles Equipment Total Marks N$ N$ N$ Cost at the beginning of the year 61, , , Additions 5, , Disposals (25,000.00) (25,000.00) 1 Cost at end year 36, , , DEPRECIATION Accumulated depreciation at beginning of year 29, , , Disposal (22,500.00) (22,500.00) 1 Charge of year 14, , , Accumulated depreciation at year 21, , ,

8 FAC511S Carrying amount at year beginning of year 31, , , Carrying amount at year end 14, , , Workings W1 Profit on disposal of vehicle Cost 25, Accumulated depreciation (20,000.00) Depreciation current year (25000*25%*6/12) (2,500.00) 1 Carrying amount , Profit on disposal (balancing figure) 1, Proceeds from disposal 4, W2 Accounts receivable Opening balance 48, Credit losses written off (420.00) Outstanding debtors 47, Allowance for credit losses Opening balance 1, Increase in allowance for credit losses Adjusted allowance (5% of debtors) 2, W3 Depreciation Old equipment Cost- Accumulated dep ( ) 20, Depreciation (10% DBM) 2, Depreciation Cash register (5000*0.1*3/12) Total depreciation equipment 2, Old vehicles (61000*20%) 12, Total depreciation (2500 (W1) ) 16,