JUNE EXAMINATION PAPER 200 marks 2 hours GRADE 10 ACCOUNTING

Transcription

1 JUNE EXAMINATION PAPER 200 marks 2 hours GRADE 10 ACCOUNTING INSTRUCTIONS AND INFORMATION: 1. Answer ALL the questions in the Answer Book provided. 2. Show all workings/calculations in order to achieve part-marks. 3. Read the instructions carefully and answer them precisely. 4. Non-programmable calculators may be used. Refrain from borrowing stationery whilst in the examination room. 5. You may use a dark pencil or black/blue ink to answer the questions. 6. Write neatly and legibly. Note that marks may be lost for important dates omitted, the use of nonstandardised abbreviations, and over-writing of figures. 7. Use the table below as a guide to manage your time. Try not to deviate from it. QUESTION TOPIC / DESCRIPTION MARKS TIME GUIDE 1 Concepts, Indigenous and Analysis Cash journals General Ledger and General Journal Debtors ledger and Creditors ledger Salaries calculations TOTAL minutes QUESTION CONCEPTS: Match the concepts in Column A with the explanations given in Column. Write the letters only, next to each number in your Answer Book. (5) COLUMN A COLUMN B Liabilities A This is a financial statement that shows the net worth of a business Fixed assets B This consists of the capital contribution and the profit made by the business Income Statement C This is the total of all long term and short term debts of a business Balance Sheet D This financial statement shows the profit or loss for a specific accounting period Owner s equity E Land and buildings and equipment are examples of this. 1.2 INDIGENOUS ACCOUNTING: Benson operates a fruit and vegetable stall as a street vendor To which sector of the economy does this type of business belong? (1) Provide TWO factors that makes this different from businesses in the other sectors of the economy. (4) Explain how this sector is beneficial to an economy. Provide TWO points. (4) Identify TWO shortcomings of such business ventures. (4)

2 1.3 ANALYSIS OF TRANSACTIONS: Analyse the following transactions according to the headings on the table provided. Follow the example provided. The bank balance is positive. TRANSACTIONS: The owner, P. Masanga, increased his capital contribution by contributing a motor vehicle valued at R Issued a cheque to Hilda Traders for the following: Trading goods R Cleaning detergents for the shop R Cash sales for the week amounted to R (profit mark-up on cost is 60%) Returned damaged stationery to Motre Suppliers (a creditor), R It was decided to write off the account of Will Notpay (a debtor), R QUESTION 2 The following information was extracted from the records of Cheryl Traders for April Complete the Cash Receipts Journal and Cash Payments Journal for April Do not total the journals. Insert your own document numbers. INFORMATION: Transactions for April 20.6: 3 Received an EFT payment from BOB Bank for R This was for a loan negotiated in January Invested R in a Fixed deposit at 10% p.a. interest at BOB Bank. Paid electronically. 6 Took delivery of trading goods purchased from Yello Stores. Issued cheque for R Issued cheque for R320 to U-Haul Transport for the delivery of the goods purchased above. 9 Made an EFT payment in favour of Brown Cash n Carry for the following: Trading goods R7 330 and a computer for office use R Received a cheque from K. Raman (a debtor) for R970 in settlement of his account of R Issued a cheque for R7 600 to BEEG Wholesalers being the monthly instalment for goods purchased on credit, after a discount of a 5% discount was deducted, when this payment was made. 29 Bank statement received from ST Bank, showed the following: Service fees R95; cash deposit fees R135; credit card levies R170; Interest on credit balance R120. Debit order payment to SW Insurers for the insurance on the owner s car, R365.

3 QUESTION GENERAL LEDGER: DEBTORS & CREDITORS CONTROL ACCOUNTS [28] The following journal totals were taken from the records of Naidoo Stores. Post to the Debtors control account and the Creditors control account in the General Ledger. Balance the accounts at the end of the month. INFORMATION: BALANCES AND TOTALS ON 1 APRIL : Debtors control R Creditors control R TOTALS FROM THE JOURNALS ON 30 APRIL : CASH RECEIPTS JOURNAL Debtors control Cost of Sundry Bank Sales Discount sales Receipts amounts allowed CASH PAYMENTS JOURNAL Creditors control Trading Debtors Sundry Bank Discount stock control Payments amounts received CREDITORS JOURNAL Creditors Packing Sundry Trading stock Equipment control material amounts CREDITORS ALLOWANCES JOURNAL Creditors Packing Sundry Trading stock Equipment control material amounts PETTY CASH JOURNAL Postage and Debtors Sundry Petty Cash Trading stock stationery control amounts DEBTORS JOURNAL Sales Cost of sales DEBTORS ALLOWANCES JOURNAL Debtors allowances Cost of sales TRADING STOCK ACCOUNT [19] INFORMATION: The following incomplete Trading stock account appeared in the General Ledger:

4 GENERAL LEDGER OF NAIDOO STORES BALANCE SHEETS ACCOUNTS SECTION Dr Trading stock B7 Cr Apr 1 Balance b/d Apr 30 Cost of sales CRJ (a) CPJ Cost of sales (d) Creditors control (b) (e) CAJ (c) DAJ Drawings (f) Provide relevant details or folio references for (a) (f). (6) The business applies a mark-up of 50% on cost for all sales transactions. Calculate the total cash sales for the month. (4) Identify the error in posting. Explain your choice. (4) Calculate the correct Trading stock balance on 30 April , after correcting the error. (5) 3.3 GENERAL JOURNAL [23] The following entries were extracted from the records of Glynis Stores during June Prepare General Journal entries to take into account the transactions below. Narrations are not necessary. Complete the Debtors and Creditors control columns. Do not total. (19) Besides charging interest, list TWO other ways that the business can use to encourage debtors to pay their accounts on time. (2) What can the business do to minimise the incidence of debtors accounts being written off as bad debts? Give TWO points. (2) INFORMATION: (a) (b) (c) (d) (e) Interest on the overdue account of M. Jara must be charged at 12% p.a. His balance of R2 800 is three months overdue. The owner used stationery valued at R320 from the office to complete his son s school assignment. A payment of R2 300 received from debtor P. de Kok was posted in error to the account of M. de Kok in the Debtors Ledger. Consumable stores purchased for R4 200 was posted in error to the Trading stock account in the General Ledger. Goods purchased on credit from Milton Suppliers, R8 800 was posted in error to the Creditors Ledger account of Malwande Suppliers. QUESTION 4 DEBTORS & CREDITORS LEDGER [25] 4.1 CREDITORS LEDGER You are presented with the Creditors Ledger account of Awethu Suppliers (CL8) in the books of Amandla

5 Traders. Taking into account the information provided below, complete the Creditors Ledger account by filling in all the missing details and amounts. Folio references must be inserted. (10) INFORMATION: CREDITORS LEDGER OF AMANDLA TRADERS Awethu Suppliers CL8 Date Details Fol Debit Credit Balance 20.7 May 1 Balance (account rendered) b/d Invoice No CPJ Discount received Additional information: An extra 5% discount, calculated on the amount paid, was received when the payment was made on the 17 th. Stationery not according to order, R1 180, received with the purchases on the 5 th was returned on the 20th. Trading goods purchased on the 25 th were subject to a 10% trade discount. The invoice total before the discount was R DEBTORS LEDGER Enter the following transactions directly to the Debtors Ledger account of S. Jacobs in the books of Phetela Traders. Folio references are required. (15) INFORMATION OF S. JACOBS FOR MAY 20.7 DATE DETAILS AMOUNT 1 Amount owing by S. Jacobs (balance) R Issued invoice No. 228 R S. Jacobs returned damaged goods. R Received a cheque from S. Jacobs for the amount due on the 1 May 20.7 after granting a 5% discount.? 16 S. Jacobs purchased goods for R She paid R500 cash. An invoice was issued for the difference.? 22 Received a notice from the bank informing us that the cheque received on 12 th was dishonoured due to insufficient funds.? QUESTION SALARY SCALE [10] Sheila Greyson was excited to receive a letter stating that she was successful in receiving a job at Wasp Traders. She was given the following salary scale: x x Calculate Sheila s monthly salary in her first year of employment. (2)

6 5.1.2 What will her annual salary be in her third year of employment? (2) What will her monthly increase be in her fifth year of employment? (3) In which year of employment would she receive R p.a.? (3) 5.2 ANALYSING A SALARY ADVICE [20] You are presented with the salary advice of Phumza Stone Calculate the net salary of Phumza Stone. (2) Phumza receives a percentage of her gross salary when income targets are met. Calculate the percentage of the bonus she received this month. (3) The business pays R1.50 for every R1 paid by the employee in respect of Medical Aid. Calculate the total amount paid to Disck Medical Aid based on this salary slip. (3) Determine the Pension Fund policy with regards to employee deductions and employers contribution. Show calculations. (6) Calculate the total cost to the business with regards to Phumza s salary for this month. (6) INFORMATION: OXFORD SALON SALARY ADVICE Date: 31 May 20.7 Employee: Phumsa Stone Job Title: Manicurist BASIC SALARY R Bonuses and allowances 525 GROSS SALARY TOTAL DEDUCTIONS : Libre Pension fund PAYE UIF 175 Disck Medical Aid 400 NET SALARY DUE TO EMPLOYEE? Employer s Contribution: Libre Pension Fund UIF 175 Disck Medical Aid? Skills Development Levy 175 TOTAL COST TO BUSINESS?

7 ANSWER BOOK QUESTION CONCEPTS: [5] INDIGENOUS ACCOUNTING: [13] To which sector of the economy does this type of business belong? (1) Provide TWO factors that makes this different from businesses in the other sectors of the economy. (4) Explain how this sector is beneficial to an economy. Provide TWO points. (4) Identify TWO shortcomings of such business ventures. (4) 1.3 ANALYSIS OF TRANSACTIONS: [32] Example: Bought stamps and paid from petty cash, R50. Journal Account debited Account credited General Ledger No. Asset Equity E.g. PCJ Postage Petty cash Liability

8 QUESTION 2 CASH RECEIPTS JOURNAL OF CHERYL TRADERS APRIL 20.6 Analysis Doc. D Details Fol of Bank No. receipts Sales Cost of sales Debtors control Discount Receipts allowed Sundry accounts Amount Fol Details CRJ8 (10) CASH PAYMENTS JOURNAL OF CHERYL TRADERS APRIL 20.6 Creditors control Doc. D Details Fol Bank Discount No. Payments received Wages & salaries Trading stock Sundry accounts Amount Fol Details CPJ8

9 20.6 Apr QUESTION GENERAL LEDGER: DEBTORS & CREDITORS CONTROL ACCOUNTS [28] GENERAL LEDGER OF NAIDOO STORES BALANCE SHEET ACCOUNTS SECTION Dr DEBTORS CONTROL B Cr 20.6 Apr 20.6 Apr CREDITORS CONTROL 20.6 Apr B (16) (12) 3.2 TRADING STOCK ACCOUNT [19] Provide relevant details or folio references for (a) (f). (6) (a) (b) (c) (d) (e) (f)

10 3.2.2 Calculate the total cash sales for the month. (4) Identify the error in posting. Explain your choice. (4) Calculate the correct Trading stock balance on 30 April 20.9, after correcting the error. (5) 3.3 GENERAL JOURNAL [23] GENERAL JOURNAL OF GLYNIS STORES JUNE 20.9 GJ J/V D Details F Debit Credit Debtors control Creditors control Debit Credit Debit Credit (a) (b) (c) (d) (e) Besides charging interest, list TWO other ways that the business can use to encourage debtors to pay their accounts on time. (2) (19)

11 3.3.3 What can the business do to minimise the incidence of debtors accounts being written off as bad debts? Give TWO points. (2) QUESTION DEBTORS & CREDITORS LEDGER [25] CREDITORS LEDGER OF AMANDLA TRADERS Awethu Suppliers CL8 Date Details Fol Debit Credit Balance 20.7 May 1 Balance (account rendered) b/d Invoice No CPJ Discount received (10) DEBTORS LEDGER OF PHETELA TRADERS S. Jacobs DL9 Date Details Fol Debit Credit Balance 20.7 May (15)

12 QUESTION SALARY SCALE [10] Calculate Sheila s monthly salary in her first year of employment. (2) What will her annual salary be in her third year of employment? (2) What will her monthly increase be in her fifth year of employment? (3) In which year of employment would she receive R p.a.? (3) 5.2 ANALYSING A SALARY ADVICE [20] Calculate the net salary of Phumza Stone. (2) Phumza receives a percentage of her gross salary when income targets are met. Calculate the percentage of the bonus she received this month. (3) The business pays R1.50 for every R1 paid by the employee in respect of Medical Aid. Calculate the total amount paid to Disck Medical Aid based on this salary slip. (3) Determine the Pension Fund policy with regards to employee deductions and employers contribution. Show calculations. (6) Calculate the total cost to the business with regards to Phumza s salary for this month. (6)

13 SOLUTION QUESTION CONCEPTS: (5) C E D A B 1.2 INDIGENOUS ACCOUNTING: To which sector of the economy does this type of business belong? (1) Informal / Unregistered sector Provide TWO factors that makes this different from businesses in the other sectors of the economy. (4) Any TWO relevant factors They can be easily set up. No set business address. May be a home, street. Do not pay taxes. No proper records. Depends on the interest or need of the owner Explain how this sector is beneficial to an economy. Provide TWO points. (4) Any TWO relevant factors The unemployed decide to be self-employed. Contribute to the economy provide a service where needed. Addresses socio-economic problems. Reduces crime Identify TWO shortcomings of such business ventures. (4) Any TWO relevant factors Usually lack the skills and knowledge of running a business. May not have sufficient capital to be more productive. May not be able to manage their finances and cash flows (business and personal). No continuity. 1.3 ANALYSIS OF TRANSACTIONS: (32) Example: Bought stamps and paid from petty cash, R50. No. Journal General Ledger Account debited Account credited Asset Equity1 Liability E.g. PCJ Postage Petty cash GJ Motor vehicle Capital Trading stock Bank ± CPJ Consumable stores / cleaning materials Bank CRJ Bank Sales Cost of sales Trading stock CAJ Creditors control Stationery GJ Bad debts Debtors control

14 The Owner s equity column is the same as the Owner s equity note in the Balance Sheet. All entries that affect the Owner s equity (the owner s investment in the business) will be entered in this column. Besides capital and drawings the net profit also is added to capital. All income therefore increases the profit the owner gets and expenses decrease the profit the owner receives. Cleaning materials is an expense; decreases the profit the owner receives. For every sale there must be a cost of sales entry. When the stationery was purchased it would have been treated as an expense (OE-). Now the expense must be cancelled. It will no longer have an effect on the profit (OE+).

15 QUESTION 2 CASH RECEIPTS JOURNAL OF CHERYL TRADERS APRIL 20.6 CRJ8 Analysis Debtors control Sundry accounts Doc. Cost of Day Details Fol of Bank Sales Discount No. sales Receipts Amount Fol Details receipts allowed B/S 3 BOB Bank Loan: BOB Bank K. Raman B/S 29 Bank Interest income1 (10) 1 The bank is paying interest to the business. This is an income. The bank will deposit the money directly in the bank account, therefore it does not appear in the Analysis column = R50 CASH PAYMENTS JOURNAL OF CHERYL TRADERS APRIL 20.6 CPJ8 Creditors control Sundry accounts Doc. Wages & Trading Day Details Fol Bank Discount No. Payments salaries stock Amount Fol Details received B/S 4 BOB Bank Fixed deposit Yello Stores U-Haul Transport B/S 9 Brown Cash n Carry Equipment BEEG Wholesalers B/S 29 ST Bank Bank charges2 (15) 1 R7 600 = 95% (the discount has already been deducted) 7600 x 5 /95 = R400 2 It is not necessary to split the charges made by the bank (concept of materiality). One entry is made for the total.

16 QUESTION GENERAL LEDGER: DEBTORS & CREDITORS CONTROL ACCOUNTS [28] GENERAL LEDGER OF NAIDOO STORES BALANCE SHEET ACCOUNTS SECTION Dr DEBTORS CONTROL B Cr Apr 1 Balance b/d Apr 30 Bank CRJ Bank CPJ Discount allowed CRJ Petty cash1 PCJ 600 Debtors allowance DAJ Sales DJ Balance c/d May 1 Balance b/d (16) CREDITORS CONTROL B Apr 30 Bank CPJ Apr 1 Balance b/d Discount received CPJ Total purchases2 CJ Total allowances2 CAJ Balance c/d May 1 Balance b/d (12) The business may have refunded the debtor. E.g. Hhe/she may have overpaid or he/she may have returned goods. Petty cash decreases and the debtor s account increases. This cancels the credit entry that was made in the debtor s account. Another possibility is that the business paid for transport (decreased petty cash) but they are charging this to the debtor (increasing the amount owed). OR Sundry accounts. 3.2 TRADING STOCK ACCOUNT [19] Provide relevant details or folio references for (a) (f). (6) (a) (b) (c) (d) (e) (f) Bank CJ Cost of sales DJ Creditors control GJ Calculate the total cash sales for the month. (4) x 150%= R [You can use either cost of sales entry (CRJ or DJ or the total of the two) and add the mark-up to the cost price.] Identify the error in posting. Explain your choice. (4) Drawings posted on the wrong side. Drawings would decrease the Trading Stock. It should be credited. Dr Drawings; Cr Trading stock

17 3.2.4 Calculate the correct Trading stock balance on 30 April , after correcting the error. (5) ( ) ( ] = R [Totals from the debit side - Totals from the credit side] 3.3 GENERAL JOURNAL [23] GENERAL JOURNAL OF GLYNIS STORES JUNE GJ Debtors control Creditors control J/V D Details F Debit Credit Debit Credit Debit Credit (a) M. Jara Interest income 84 (b) Drawings 320 Stationery 320 (c) M. de Kok P. de Kok (d) Consumable stores Trading stock (e) Malwande Suppliers Milton Suppliers *Details and amounts for 1 tick. (19) Note: The correct contra account names must be used in a General Journal. The debit entry must be recorded first. If the entry concerns a debtor or creditor then the amount is also recorded in the Debtors or Creditors control column Besides charging interest, list TWO other ways that the business can use to encourage debtors to pay their accounts on time. (2) Any TWO points Discounts, sms s, regular statements, reminders, gift vouchers, etc What can the business do to minimise the incidence of debtors accounts being written off as bad debts? Give TWO points. (2) Any TWO points Screen new debtors, set credit limits, regular follow-up on outstanding debts, payment plans, etc. QUESTION DEBTORS & CREDITORS LEDGER [25] CREDITORS LEDGER OF AMANDLA TRADERS Awethu Suppliers CL8 Date Details Fol Debit Credit Balance Balance (account rendered) b/d

18 May 5 Invoice No. 621 CJ Cheque XX CPJ Discount received CPJ Debit note XX CAJ Invoice No. XX CJ (10) DEBTORS LEDGER OF PHETELA TRADERS S. Jacobs DL9 Date Details Fol Debit Credit Balance 20.7 May 1 Balance (account rendered) Invoice 228 DJ Credit Note XX DAJ Receipt No. XX CRJ Discount allowed CRJ Invoice No. XX DJ Cheque R/D CPJ Discount cancelled GJ for incorrect/no details (15) Note: In the debtors and creditors individual accounts, there is no double entry. It is common practice to just state the document only or if there is no document to give details, e.g. discount cancelled. QUESTION SALARY SCALE [10] Calculate Sheila s monthly salary in her first year of employment. (2) = R What will her annual salary be in her third year of employment? (2) = R What will his monthly increase be in her 5 th year of employment? (3) = R In which year of employment would she receive R p.a.? (3) R (1 st ); R (2 nd ); R (3 rd ); R (4 th ); R (5 th ); R (6 th ); R (7 th ); *[Refer to the table below] Seventh year * Details of the salary scale: Year Increase Annual Monthly salary salary

19 5.2 ANALYSING A SALARY ADVICE [20] Calculate the net salary of Phumza Stone. (2) = R Phumza receives a percentage of her gross salary when income targets are met. Calculate the percentage of the bonus she received this month. (3) 525 x 100 = 3% The business pays R1.50 for every R1 paid by the employee in respect of Medical Aid. Calculate the total amount paid to Disck Medical Aid based on this salary slip. (3) 400 x 1.5 = R = R Determine the Pension Fund policy with regards to employee deductions and employers contribution. Show calculations. (6) / x 100 = 8% / x 100 = 11% Employee pays 8% and the business contributes 11%. 19% goes to the pension fund on behalf of each employee Calculate the total cost to the business with regards to Phumza s salary for this month. (6) = R [Cost to company = Gross salary + Contributions] 1..