SECTION A: REVISION VIDEO QUESTIONS. Accounting equation: VAT ignored. ICB Bookkeeping to Trial Balance Playlist Handbook

Transcription

1 ICB Bookkeeping to Trial Balance Playlist Handbook SECTION A: REVISION VIDEO QUESTIONS Accounting equation: VAT ignored The following are miscellaneous transactions for Zestra Stores for September Ignore VAT. The business uses the perpetual inventory method with a mark-up of 33 1 / 3 % on cost. Date Transaction Details 1 The owner took a product from stock for personal use, selling price = R Paid the monthly rental by debit order, R Purchased an office computer on credit from Simplex Computers (Pty) Ltd, R Cash sales of trading inventory, selling price = R Credit sales of trading inventory, selling price = R A debtor returned some of the goods purchased from Zestra Stores on 26 September The cost price of the goods in question was R You are required to: Show how the above transactions will affect the accounting equation and enter how the accounts in the general ledger will be affected. Example: Received a capital contribution of R in the form of cash: Date Assets (R) = Owner s equity (R) + Liabilities (R) e.g Debit Bank Credit Capital 1

2 Section A: Revision Video Questions Answer template: Date Assets (R) = Owner's equity (R) + Liabilities (R)

3 ICB Bookkeeping to Trial Balance Playlist Handbook General ledger account types Question and Answer template: Complete the following table, by marking the appropriate column with an X. Type of account Name of account Non-current Current Non-current Current Proprietary Income Expense E.g. Motor vehicles X Bank overdraft Visa Credit Card (unfavourable) Rent expense Drawings Capital Equipment VAT input Bank loan (matures in 16 months time) Interest on overdue debtors Interest on overdue creditors Cost of sales Settlement discount granted Fixed deposit (matures in 18 months time) Wages & salaries Savings account Settlement discount received Interest income VAT output Debtors control Petty cash 3

4 Section A: Revision Video Questions VAT categories Question and Answer template: Complete the following table, by marking the correct block at each supply listed. Assume that a business acquires the considerations listed and that the business itself was invoiced in all instances (unless otherwise specified). Where applicable, assume that all parties dealt with are registered VAT vendors (unless otherwise specified) and assume that the VAT Act has been adhered to in all instances. Consideration Standard rated supply Zero-rated supply Exempt supply Non-allowable item E.g. Business rent expense X Short term insurance on delivery vehicle Diesel Bona-fide exports to foreign countries Owner s contribution of allowable furniture within six months after starting his business Trading inventory purchased Rent paid to a non-vat vendor Double cab bakkie (used for deliveries) The purchase of another business as a going concern Purchases of processed vegetables (as inputs) by a restaurant Single cab bakkie Employee 2-night hotel bill whilst on a business trip Interest received on a fixed deposit A donation to the Red Cross Society Payment to the municipality for electricity Brown bread and milk for staff A staff function at a restaurant Professional Body fees for trading Rent for the owner s son (owner s son was invoiced, but business paid the amount due) Public transport by rail within South Africa Transport by air (aeroplane tickets excluding taxes) 4

5 ICB Bookkeeping to Trial Balance Playlist Handbook Basic VAT calculations and mark-ups Complete the following table. The scenarios listed should be interpreted from the point of view of The Shoe Shop, a Footware business. Assume a standard VAT rate of 14 %. Question and Answer template: VAT exclusive cost of SA Shoe Shop R VAT on the cost of SA Shoe Shop VAT inclusive cost of SA Shoe Shop Mark-up % on cost price 50% VAT exclusive selling price of SA Shoe Shop VAT on the selling price of SA Shoe Shop VAT inclusive selling price of SA Shoe Shop Gross profit earned per SA Shoe Shop sold (amount in Rands) Gross margin attained (as a percentage; answer to two decimal places) 5

6 Section A: Revision Video Questions Subsidiary journals and general ledger: Perpetual (debtors) You are the bookkeeper of Norkem s Footwear. The business is a registered VAT vendor and trades only with registered VAT Vendors. The business charges 14 % VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable. As the bookkeeper you have been provided with ONLY the source documents for the month of June necessary for the preparation of the journals specified below. The business uses the perpetual inventory system and trading inventory is marked up by 40 % on selling price (before any given trade discounts) unless otherwise specified; (i.e. the gross margin before trade discounts is 40 %) DINV, DCR, DS, DR, JV and PCV are the source document codes for duplicate invoices, duplicate credit notes, duplicate cash slips, duplicate receipts, journal vouchers and petty cash vouchers respectively. Source documents of Norkem s Footwear for the month of June 20.10: Date Details Source document no. Description Amount (R) 1 J. Norkem DR519 Additional capital contribution in cash P. Grace DINV441 Sale of trading inventory. The mark up on this trading inventory was 55 % on cost price T. Trotter DS334 Sale of trading inventory V. Musa DINV442 Sale of trading inventory: R less a 15 % trade discount.? 12 J. Norkem JV319 J. Norkem contributed a delivery vehicle to the business. (All legislative requirements have been met for the full VAT amount to be claimed) V. Musa DCR239 Trading inventory returned Lancaster Ltd DS335 Received a dividend from Lancaster Ltd Layman s Superette PCV143 Petty cash payment for floor polish C.T. Mpulo DINV443 Sale of trading inventory K. Trump DS336 Sale of trading inventory: R less a 7 % trade discount.? 21 J. Norkem JV320 Drawings of trading inventory with a selling price including VAT of R Layman s Superette PCV144 Petty cash payment for coffee SA Rentals DS337 Received rent income from SA Rentals with respect to a commercial tenant.? B. Bellingham DINV444 Sale of trading inventory Hometown Stationers PCV145 Petty cash payment for pens and pencils B. Bellingham DCR240 Trading inventory returned V. Musa DR G. Bertram DS338 Received a cheque from V. Musa (No discount) payment on account. (Balance owing at the beginning of the month: R ). Sale of trading inventory. The inventory was marked up by 60 % on cost price J. Norkem PCV146 Drawings from petty cash by the owner C.T. Mpulo DCR241 Trading inventory returned C.T. Mpulo DR P. Grace JV321 Received from C.T. Mpulo less 8 % settlement discount. (Balance owing at the beginning of the month: R ). Credit loss Amount owing by P. Grace written off as irrecoverable (Balance owing at the beginning of the month: R ).?? 6

7 ICB Bookkeeping to Trial Balance Playlist Handbook Date Details Source document no. 30 B. Bellingham JV C.T. Mpulo JV N/A JV324 Description Interest charged by Norkem s Footwear on the overdue account of B. Bellingham. 8 % settlement discount allowed to C.T. Mpulo for settlement of the account. (Refer to duplicate receipt no. DR521). It was realised that technology equipment purchased for R during May was erroneously debited to the office consumables account. Correct the error. Amount (R) ?? Required: Use the relevant transactions from those given above to complete (a) to (f) for the month of June (a) (b) (c) (d) (e) (f) Debtors journal (DJ6) with analysis columns for debtors control, VAT, sales and cost of sales. Mark clearly how the different amounts or totals will be posted to the general ledger at monthend. Debtors allowances journal (DAJ6) with analysis columns for debtors control, VAT and sales returns and cost of sales. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Cashbook receipts (CBR6) with analysis columns for analysis of receipts, bank, debtors control, VAT, sales, sundries and cost of sales. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Settlement discounts are recorded in the general journal. Cash is banked on a daily basis. Petty cash journal (PCJ6) with analysis columns for petty cash, postage and stationery, staff refreshments, VAT and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at the month-end. General journal (GJ6). Open, post to and balance the following accounts in the general ledger: Sales account (N1): Opening balance on 1 June R Sales returns account (N2): Opening balance on 1 June R Note: Mark clearly on the debtors journal, debtors allowances journal, cashbook receipts and the petty cash journal how the different amounts or totals will be posted to the general ledger at the monthend. Clearly specify whether the VAT column is VAT input or VAT output. All amounts are INCLUSIVE of VAT, unless VAT is not applicable. 7

8 Section A: Revision Video Questions 8 Answer template: Debtors journal of

9 ICB Bookkeeping to Trial Balance Playlist Handbook 9 Debtors allowances journal of

10 Section A: Revision Video Questions 10 Cashbook receipts of

11 ICB Bookkeeping to Trial Balance Playlist Handbook 11 Petty cash journal of

12 Section A: Revision Video Questions General journal of 12

13 ICB Bookkeeping to Trial Balance Playlist Handbook 13 General ledger of

14 Section A: Revision Video Questions Subsidiary journals and general ledger: Perpetual (creditors) You are the bookkeeper of Stuttaford Wine Suppliers. The business is a registered VAT vendor and trades only with registered VAT vendors. The business charges 14 % VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable. As the bookkeeper you have been provided with ONLY the source documents for the month of November necessary for the preparation of the journals specified below. The business uses the perpetual inventory system and trading inventory is marked up by 50 % on cost price (before any given trade discounts) unless otherwise specified. INV, CRN, CC and JV are the source document codes for re-numbered original invoices, re-numbered original credit notes, cheque counterfoils and journal vouchers respectively. Source documents of Stuttaford Wine Suppliers for the month of November 20.10: Date Details Source document no. Description Amount (R) 1 Ceres Farm INV309 Trading inventory purchased Sam's Supply Store CC564 Payment for business Office consumables (Print cartridges) Ceres Farm CRN212 Trading inventory returned to the supplier Cash CC565 Drew a cash cheque for petty cash Ceres Farm CC566 Payment on account to Ceres Farm. No settlement discount was received because the account was not paid in full. (Balance owing at the beginning of the month: R ) Wellington Farms CC567 Trading inventory purchased Paarl Farm INV310 Trading inventory purchased K. House (the owner) JV319 K. House contributed a delivery vehicle to the business. (All legislative requirements have been met for the full VAT amount to be claimed) Robertson Farms CC568 Trading inventory purchased: R less a 14 % trade discount.? 13 Franschoek Farm INV311 Purchase of office consumables Boland Stationers CC569 Cash purchase of fax paper (postage and stationery) Paarl Farm CRN213 Trading inventory returned to the supplier Farmland suppliers INV312 Purchased a Staff microwave oven Farmland suppliers INV313 Purchased a Juice press Mat Toyota CC Paarl Farm CC Paarl Farm JV320 Purchased a company vehicle (conforms to the definition of a passenger vehicle) for the sales representative. Settlement of account with Paarl Farm, less 10 % settlement discount. (Balance owing at the beginning of the month: R ). 10 % settlement discount received from Paarl Farm for settlement of the account. (Refer to cheque no. CC571) Cash CC572 Drawings by the owner K. House JV321 Drawings of trading inventory with a selling price including VAT of R ? 21 Farmland suppliers CRN214 A rebate was granted on the staff microwave oven purchased on 16 November Stellenbosch Farm INV314 Trading inventory: R less a 15 % trade discount.? 24 Boland Municipality INV315 Electricity charged on account ??

15 ICB Bookkeeping to Trial Balance Playlist Handbook Date Details Source document no. Description Amount (R) 25 Swartland Furniture CC573 Cash purchase of an office desk (furniture and fittings) Kiele Industries CC574 Trading inventory purchased Franschoek Farm CRN215 Defective office consumables returned to the supplier Stellenbosch Farm CRN216 Received for trading inventory returned to the supplier Boland Municipality INV316 Property rates charged on account (no services) The Caterer CC575 Payment for staff refreshments Cash CC576 Drew a cash cheque to pay the monthly salaries Stellenbosch Farm JV N/A JV323 Interest charged by Stellenbosch Farm on the overdue account of Stuttaford Wine Suppliers. It was realised that equipment purchased for R during October was erroneously debited to the office consumables account. Correct the error ? You are required to: Use the relevant transactions from those given above to complete (a) to (e) for the month of November (a) (b) (c) (d) (e) Creditors journal (CJ11) with analysis columns for creditors control, VAT, trading inventory and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Creditors allowances journal (CAJ11) with analysis columns for creditors, VAT, trading inventory and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at the month-end Cashbook payments (CBP11) with analysis columns for bank, creditors control, VAT, trading inventory and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger month-end. Settlement discounts are recorded in the general journal. General journal (GJ11). Open, post to and balance the following account/s in the general ledger: Trading inventory account (B6): Opening balance on 1 November R Note: Mark clearly on the creditors journal, creditors allowances journal and cashbook payments how the different amounts or totals will be posted to the general ledger at the end of the month. Clearly specify whether the VAT column is VAT input or output. Original invoices and original credit notes have been renumbered. All amounts are INCLUSIVE of VAT, unless VAT is not applicable. 15

16 Section A: Revision Video Questions 16 Answer template: Creditors journal of

17 ICB Bookkeeping to Trial Balance Playlist Handbook 17 Creditors allowances journal of

18 Section A: Revision Video Questions 18 Cashbook payments of

19 ICB Bookkeeping to Trial Balance Playlist Handbook 19 General journal of

20 Section A: Revision Video Questions 20 General ledger of

21 ICB Bookkeeping to Trial Balance Playlist Handbook Subsidiary journals and general ledger: Periodic (debtors) You are the bookkeeper of Dexter Traders. The business is a registered VAT vendor and trades only with registered VAT Vendors. The business charges 14 % VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable. As the bookkeeper you have been provided with ONLY the source documents for the month of September necessary for the preparation of the journals specified below. The business uses the periodic inventory system. CINV, DCR, DS, DR, JV and PCV are the source document codes below for duplicate invoices, duplicate credit notes, duplicate cash slips, duplicate receipts, journal vouchers and petty cash vouchers respectively. B/S refers to a direct debit or credit on the bank statement. Source documents of Dexter Traders for the month of September 20.12: Date Details Source document no. Description Amount (R) 1 R. Slabbart (the owner) DR298 Additional capital contribution in cash P. Piet CINV220 Sale of trading inventory. The mark up on this trading inventory was 55 % on cost price B. Hennie DS113 Sale of trading inventory O. Olivier CINV221 Sale of trading inventory: R less a 20 % trade discount.? 12 R. Slabbart JV98 R. Slabbart contributed a delivery vehicle to the business. (All legislative requirements have been met for the full VAT amount to be claimed) O. Olivier DCR18 Trading inventory returned FNB Ltd B/S Received Interest on the fixed deposit from FNB Ltd (interest credited to the current account). 18 Sam's Supply Store PCV74 Petty cash payment for packing boxes C. Carelse CINV222 Sale of trading inventory M. Paulse DS114 Sale of trading inventory: R less a 15 % trade discount.? 21 R. Slabbart JV99 Drawings of trading inventory with a selling price including VAT of R The inventory was marked up by 50 % on the selling price (i.e. the gross margin was 50 %) 22 Berge Cafe PCV75 Petty cash payment for coffee SA Property Group Ltd DS115 Received the rent income from SA Property Group Ltd. The tenant uses the premises for business purposes ? G. Govender CINV223 Sale of trading inventory Boland Stationers PCV76 Petty cash payment for pens and pencils for office use G. Govender DCR19 Trading inventory returned O. Olivier DR299 Received a cheque from O. Olivier (No discount) - Payment on account. (Balance owing at the beginning of the month: R ) J. Jock DS116 Sale of trading inventory. The inventory was marked up by 50 % on cost price R. Slabbart PCV77 Drawings from petty cash by the owner C. Carelse DCR20 Trading inventory returned

22 Section A: Revision Video Questions Date Details Source document no. 30 C. Carelse DR P. Piet JV100 Amount Description (R) Received from C. Carelse less 10 % settlement discount. (Balance owing at the? beginning of the month: R ). Credit loss - Amount owing by P. Piet written off as irrecoverable (Balance owing? at the beginning of the month: R ). 30 G. Govender JV101 Interest charged by Dexter Traders on the overdue account of G. Govender C. Carelse JV N/A JV % settlement discount allowed to C. Carelse for settlement of the account.? (Refer to duplicate receipt no. DR300). It was realised that equipment purchased for R during August 20.12? was erroneously debited to the office consumables account. Correct the error. Required: Use the relevant transactions from those given above to complete (a) to (f) for the month of September (a) (b) (c) (d) (e) (f) Debtors journal (DJ9) with analysis columns for debtors control, VAT and sales. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Debtors allowances journal (DAJ9) with analysis columns for debtors control, VAT and sales returns. Mark clearly how the different amounts or totals will be posted to the general ledger at monthend. Cashbook receipts (CBR9) with analysis columns for bank, debtors control, VAT, sales and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Settlement discounts are recorded in the general journal. Cash is banked on a daily basis. Petty cash journal (PCJ9) with analysis columns for petty cash, postage and stationery, staff refreshments VAT and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end General journal (GJ9). Open, post to and balance the following accounts in the general ledger: Sales account (N1): Opening balance on 1 September R Sales returns account (N2): Opening balance on 1 September R Note: Mark clearly on the debtors journal, debtors allowances journal, cashbook receipts and the petty cash journal how the different amounts or totals will be posted to the general ledger at the monthend. Clearly specify whether the VAT column is VAT input or VAT output. All amounts are INCLUSIVE of VAT, unless VAT is not applicable. 22

23 ICB Bookkeeping to Trial Balance Playlist Handbook 23 Answer template: Debtors journal of

24 Section A: Revision Video Questions 24 Debtors allowances journal of

25 ICB Bookkeeping to Trial Balance Playlist Handbook 25 Cashbook receipts of

26 Section A: Revision Video Questions 26 Petty cash journal of

27 ICB Bookkeeping to Trial Balance Playlist Handbook 27 General journal of

28 Section A: Revision Video Questions 28 General ledger of

29 ICB Bookkeeping to Trial Balance Playlist Handbook Subsidiary journals and general ledger: Periodic (creditors) You are the bookkeeper of Inter-City Traders. The business is a registered VAT vendor and trades only with registered VAT vendors. The business charges 14 % VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable. As the bookkeeper you have been provided with the source documents for the month of May necessary for the preparation of the journals specified below. The business uses the Periodic inventory system and trading inventory is marked up by 50 % on cost price, if applicable, (before any given trade discounts) unless otherwise specified. INV, CRN, CC and JV are the source document codes for re-numbered original invoices, re-numbered original credit notes, cheque counterfoils and journal vouchers respectively. Source documents of Inter-City Traders for the month of May 20.11: Date Details Source document no. Description Amount (R) 1 Revtown Traders INV279 Trading inventory purchased Plumb Right CC534 Payment for business plumbing services (repairs and maintenance) Revtown Traders CRN182 Trading inventory returned to the supplier Cash CC535 Drew a cash cheque for petty cash Revtown Traders CC536 Payment on account to Revtown Traders. No settlement discount was received because the account was not paid in full. (Balance owing at the beginning of the month: R ) Upton (Pty) Ltd CC537 Trading inventory purchased Kirsten Suppliers INV280 Trading inventory purchased H. Jobe JV289 H. Jobe contributed a vehicle to the business. (All legislative requirements have been met for the full VAT amount to be claimed) Wagtown CC CC538 Trading inventory purchased: R less a 6 % trade discount.? 13 Cartridge Land INV281 Purchase of printer consumables RGH Stationers CC539 Cash purchase of pens and highlighters (postage and stationery) Kirsten Suppliers CRN183 Trading inventory returned to the supplier Jelly Suppliers INV282 Purchased a staff coffee table (Furniture and fittings) Jelly Suppliers INV283 Purchased a board room table (Furniture and fittings) Party Land CC540 Purchased a staff pool table (equipment) Kirsten Suppliers CC Kirsten Suppliers JV290 Settlement of account with Kirsten Suppliers, less 5 % settlement discount. (Balance owing at the beginning of the month: R ). 5 % settlement discount received from Kirsten Suppliers for settlement of the account. (Refer to cheque no. CC541). 21 Cash CC542 Drawings by the owner H. Jobe (the owner) JV291 Drawings of trading inventory with a selling price including VAT of R ? 21 Jelly Suppliers CRN184 A rebate was granted on the staff coffee table purchased on 16 May Holsten Traders INV284 Trading inventory: R less a 7 % trade discount.? 24 Game INV285 Cleaning materials charged on account Computer World CC543 Cash purchase of a desktop computer (Computer equipment) Bennie Suppliers CC544 Trading inventory purchased ?? 29

30 Section A: Revision Video Questions Date Details Source document no. Description Amount (R) 27 Cartridge Land CRN185 Defective printer consumables returned to the supplier Holsten Traders CRN186 Received for trading inventory returned to the supplier L. Jack (non VAT vendor) INV286 Delivery expenses charged on account The Café CC545 Payment for business office refreshments Cash CC546 Drew a cash cheque to pay the monthly salaries Holsten Traders JV292 Interest charged by Holsten Traders on the overdue account of Inter-City Traders N/A JV293 It was realised that furniture and fittings purchased for R during April was erroneously debited to the Printer consumables account. Correct the error.? You are required to: Use the relevant transactions from those given above to complete (a) to (e) for Inter-City Traders for the month of May (a) (b) (c) (d) (e) Creditors journal (CJ5) with analysis columns for creditors control, VAT, purchases and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at monthend. Creditors allowances journal (CAJ5) with analysis columns for creditors control, VAT, purchases returns and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Cashbook payments (CBP5) with analysis columns for bank, creditors control, VAT, purchases and sundries. Mark clearly how the different amounts or totals will be posted to the general ledger at month-end. Settlement discounts are recorded in the general journal. General journal (GJ5). Open, post to and balance the following account/s in the general ledger: Purchases account (N3): Opening balance on 1 May R Purchases returns account (N4): Opening balance on 1 May R Note: Mark clearly on the creditors journal, creditors allowances journal and cashbook payments how the different amounts or totals will be posted to the general ledger at the end of the month. Clearly specify whether the VAT column is VAT input or output. Original invoices and original credit notes have been renumbered. All amounts are INCLUSIVE of VAT, unless VAT is not applicable. 30

31 ICB Bookkeeping to Trial Balance Playlist Handbook 31 Answer template: Creditors journal of

32 Section A: Revision Video Questions 32 Creditors allowances journal of

33 ICB Bookkeeping to Trial Balance Playlist Handbook 33 Cashbook payments of

34 Section A: Revision Video Questions 34 General journal of

35 ICB Bookkeeping to Trial Balance Playlist Handbook 35 General ledger of

36 Section A: Revision Video Questions Accounting equation: Including VAT The following are miscellaneous transactions for LARJ Traders for May The business is a registered VAT vendor and trades only with registered VAT vendors who can provide tax invoices. The business charges 14 % VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable. The business uses the perpetual inventory method. The business makes use of separate VAT input and VAT output accounts. Date Details of transaction Amount (R) 1 The owner, M. Allem, contributed cash to the business Purchased trading inventory from ASA Technologies and paid by cheque Paid Telkom by cheque for the business ADSL rental (Telephone and Internet) Purchased trading inventory on credit from Sharp Hardware CC Returned trading inventory previously purchased on credit to Sharp Hardware CC Settled our account in full with Lester Traders less a 12 % settlement discount. The creditors statement showed a balance of R prior to this settlement taking place. Cash sale of trading inventory with a selling price (marked price) of R The mark-up on the inventory was 65 % of the selling price (i.e. the gross margin was 65 %). 11 Bought office desks (Office furniture) and paid by cheque Drew a cash cheque for petty cash Received the delivery income for the month in cash The owner, M. Allem, contributed his personal motor vehicle (single cab bakkie) to the business. All legislative requirements have been met for the full VAT amount to be deducted. Sold trading inventory with a selling price (marked price) of R on credit to K. Lewis. The mark-up on the inventory was 50 % on cost.?? Trading inventory with a selling price (marked price) of R returned by K. Lewis (refer to day 17).? 20 K. Lewis settled her account in full less a 15 % settlement discount. The debtors list showed a balance of R at the end of April (refer to transactions on day 17 and day 18, and assume these were the only transactions that took place with respect to this debtor between 1 May and 19 May 20.10). 21 The owner, M. Allem, took cash from the cash drawer Purchased an office printer on credit from Incredible Computers Sold trading inventory with a selling price (marked price) of R on credit to L. Viljoen. The mark-up on the inventory was 60 % on cost. 25 L. Viljoen has been declared insolvent and his debt of R is to be written off as irrecoverable.? 26 Paid for petrol out of the petty cash The owner, M. Allem, took inventory with a selling price of R (mark-up = 25 % on cost) for his own use Received the Interest on fixed deposit income for the month. The bank credits all interest on fixed deposit to the current bank account.???

37 ICB Bookkeeping to Trial Balance Playlist Handbook Required: Show how the above transactions will affect the accounting equation and enter how the accounts in the general ledger will be affected. See the example below. Example: Received a mortgage loan of R in the form of cash: No. Assets (R) = Owner s equity (R) + Liabilities (R) e.g Debit Bank Credit Mortgage loan Answer template: Date Assets (R) = Owner's equity (R) + Liabilities (R)

38 Section A: Revision Video Questions Date Assets (R) = Owner's equity (R) + Liabilities (R)

39 ICB Bookkeeping to Trial Balance Playlist Handbook Date Assets (R) = Owner's equity (R) + Liabilities (R)

40 Section A: Revision Video Questions Date Assets (R) = Owner's equity (R) + Liabilities (R)

41 ICB Bookkeeping to Trial Balance Playlist Handbook Subsidiary ledgers: Debtors Tantor Traders uses a periodic inventory system. The business is a registered VAT vendor, and it is the policy of the business to buy only from other vendors who are able to provide tax invoices. November is the business s third month of trading and the following list of balances appeared on their books on 31 October 20.10: Additional information: List of balances in the debtors ledger of Tantor Traders on 31 October Debtors Fol. Amount Q. Quebec D H. Henry D K. Kurt D K. Legget D The following transaction codes are used by Tantor Traders: Codes used in the debtors ledger: Code no. 01: Code no. 02: Code no. 03: Code no. 04: Code no. 05: Code no. 06: Code no. 07: Code no. 08: Code no. 09: Code no. 010: Code no. 011: Code no. 012: Credit sales according to duplicate credit invoices. Returns/rebates according to duplicate credit notes. Cash receipts from debtors. Discounts allowed on prompt settlements. R/D cheques (when cheques received from debtors are dishonoured by the bank). Discounts cancelled on R/D cheques. Interest charge on overdue accounts. Bad debts/credit losses. Set off of accounts to and from the creditors ledger. Discount vouchers. Petty cash vouchers. Reversal of interest on overdue accounts. 41

42 Section A: Revision Video Questions Debtors journal of Tantor Traders November DJ11 Doc. no. Date Details Fol. Debtors control VAT output Sales INV455 1 Q. Quebec D INV456 7 H. Henry D INV K. Kurt D INV K. Legget D INV L. Red D Debtors allowances journal of Tantor Traders November DAJ11 Doc. no. Date Details Fol. Debtors control VAT input Sales returns CN199 5 Q. Quebec D CN H. Henry D CN K. Kurt D CN K. Legget D CN L. Red D

43 ICB Bookkeeping to Trial Balance Playlist Handbook 43 Cashbook receipts of Tantor Traders November CBR11 Doc. no. Date Details Fol. Analysis of receipts Bank Debtors control VAT output Sales Sundries Amount Fol. Details CV480 1 GrowthSure Bank Interest on current a/c CV481 5 Nampak Traders Rent received REC Q. Quebec D CV Label CC Commission received REC H. Henry D CV CASH B/S 30 K. Legget D

44 Section A: Revision Video Questions General journal of Tantor Traders November GJ11 Doc. no. Date Details Fol. Debit Credit VCH Settlement discount granted VAT input Debtors control (Q. Quebec) D (Settlement discount of 10 %) VCH Creditors control (H. Henry) C Debtors control (H. Henry) D (Balance transferred) VCH Credit losses VAT input Debtors control (K. Kurt) D (Amount written off as irrecoverable) VCH Debtors control (K. Legget) D Interest received (Interest on overdue account at 12 % per annum) VCH Interest received Debtors control (K. Legget) D (Reversal of interest received) The bank statement at the month-end revealed the following: The cheque received from Q. Quebec was returned by the bank marked R/D on 30 November This transaction was not recorded. K. Legget had deposited the amount owing directly into the bank account on 30 November Required: (a) Open, post to and balance the debtors control account (B5) in the general ledger of Tantor Traders for November The balance brought down on 1 November was R (b) Draft the debtors ledger of Tantor Traders. (c) Draft the debtors list of Tantor Traders as at 30 November

45 ICB Bookkeeping to Trial Balance Playlist Handbook Answer template: General ledger of

46 Section A: Revision Video Questions 46 Debtors ledger of

47 ICB Bookkeeping to Trial Balance Playlist Handbook 47

48 Section A: Revision Video Questions 48

49 ICB Bookkeeping to Trial Balance Playlist Handbook 49 Debtors list of

50 Section A: Revision Video Questions Subsidiary ledgers: Creditors Lamby Suppliers uses a perpetual inventory system. The business is a registered VAT vendor, and it is the policy of the business to buy only from other vendors who are able to provide tax invoices. September is the business s third month of trading and the following list of balances appeared on their books on 31 August 20.11: List of balances in the creditors ledger of Lamby Suppliers on 31 August Creditor Fol. Amount SA Steel Ltd C Reveret Suppliers C Game C Horner Traders C Additional information: The following transaction codes are used in the creditors ledger by Lamby Suppliers: Code no. 01: Code no. 02: Code no. 03: Code no. 04: Code no. 05: Code no. 06: Code no. 07: Code no. 08: Credit purchases according to original credit invoices Increases in a previously received credit invoice by means of an original debit note. Returns/rebates according to original credit notes. Cash payments to creditors (cheque counterfoils). Electronic funds transfers Interest charged by creditors on our overdue account. Discount received on prompt settlements. Creditors balance transferred to the debtors ledger 50

51 ICB Bookkeeping to Trial Balance Playlist Handbook 51 Creditors journal of Lamby Suppliers September CJ9 Doc. no. Date Details Fol. Creditors control VAT input Trading inventory Sundries Amount Fol. Details Iv234 1 SA Steel Ltd C Iv235 5 Reveret Suppliers C Iv236 9 Game C Cleaning materials Iv Horner Traders C Iv Supply Land C Computer equipment Creditors allowances journal of Lamby Suppliers September CAJ9 Doc. no. Date Details Fol. Creditors control VAT output Trading inventory Sundries Amount Fol. Details Cnt SA Steel Ltd C Cnt Reveret Suppliers C Cnt Game C Cleaning materials Cnt Horner Traders C Cnt Supply Land C Computer equipment

52 Section A: Revision Video Questions 52 Cashbook payments of Lamby Suppliers September CBP9 Doc. no. Date Name of payee Fol. Bank Creditors control VAT input Trading inventory Sundries Amount Fol. Details Cq225 1 A. Henry Salary Cq226 5 Jobe Café Rent expense Cq SA Steel Ltd C Cq Yellow Municipality Electricity Cq Reveret Suppliers C Cq Jock Suppliers

53 ICB Bookkeeping to Trial Balance Playlist Handbook General journal of Lamby Suppliers for September GJ9 Doc. no. Date Details Fol. Debit Credit Jv Creditors control (SA Steel Ltd) C VAT output Settlement discount received (Settlement discount of 15 %) Jv Creditors control (Reveret Suppliers) C Debtors control (Reveret Suppliers) D (Balance transferred) Jv Interest paid Creditors control (Horner Traders) C (Interest on overdue account at 14 % per annum) Required: (a) Open, post to and balance the creditors control account (B6) in the general ledger of Lamby Suppliers for September The balance brought down on 1 September is R (b) Draft the creditors ledger of Lamby Suppliers. (c) Draft the creditors list of Lamby Suppliers as at 30 September

54 Section A: Revision Video Questions 54 Answer template: General ledger of

55 ICB Bookkeeping to Trial Balance Playlist Handbook 55 Creditors ledger of

56 Section A: Revision Video Questions 56

57 ICB Bookkeeping to Trial Balance Playlist Handbook 57 Creditors list of

58 Section A: Revision Video Questions Bank reconciliation The following information was taken from the books of Decorex Distributors for August and September 20.11: Table of items appearing on the bank reconciliation statement of Decorex Distributors as at 31 August Details Amount (R) Balance as per bank statement (unfavourable) Outstanding cheque: CC Outstanding cheque: CC Outstanding cheque: CC Outstanding deposit: DS Correction of bank error on cheque CC655 where Africa Bank understated the amount of the cheque on the bank statement Balance as per bank account (unfavourable) Cheque counterfoils of Decorex Distributors September Date Cheque counterfoil no. Amount (R) 1 CC CC CC CC CC CC CC CC CC CC Deposit slips of Decorex Distributors September Date Deposit slip no. Amount (R) 1 DS DS DS DS DS DS

59 ICB Bookkeeping to Trial Balance Playlist Handbook Bank statement from Zanzibar Bank for Decorex Distributors September Date Description Debit (R) Credit (R) Balance (R) 1 Balance Dr 1 CC Dr 1 Deposit Dr 1 Correction of error on: CC Dr 1 Deposit Dr 2 CC Dr 4 CC Dr 6 Deposit Dr 7 CC Dr 7 Bank statement fees Dr 7 Direct deposit H. Cook Dr 11 CC Dr 12 Deposit Dr 12 Transaction fees Dr 14 CC Dr 14 CC Dr 15 R/D T. Telly Dr 19 CC Dr 19 Deposit Dr 21 Direct deposit O. Pienaar Dr 23 CC Dr 23 Government levy Dr 26 ZAZ Dr 27 CC Dr 28 Interest on overdraft Dr 30 Debit order Recall Dr 30 Debit order All Cover Dr 59

60 Section A: Revision Video Questions Additional information: 1. Cheque no. CC574 is now stale and must be cancelled. 2. The bank has recorded cheque no. CC864 at the incorrect amount. 3. The deposit corresponding with DS662 was credited on the bank statement at the correct amount of R The deposit corresponding with DS661 was for a cheque received from a debtor, T. Telly. The cheque was returned by the bank marked Return to drawer. 5. The direct deposit on 7 September was from a debtor, H. Cook, in settlement of his account. 6. The direct deposit on 21 September was for Rent income from O. Pienaar. 7. The debit order in favour of Recall is for the business cell phone. 8. The debit order in favour of All Cover is for the business insurance. 9. Cheque no. ZAZ250 was incorrectly debited to the business s account. 10. Cheque no. CC866 was erroneously debited twice on the bank statement. Required: Use the information taken from the books of Decorex Distributors to complete the following for September 20.11: (a) Record any differences identified in the bank reconciliation process in a supplementary cashbook receipts and payments with columns for details and amount. Begin with the totals before any amendments. (b) Open, post to and balance the bank account (B10) in the general ledger. (c) Compile the bank reconciliation statement as at 30 September Answer template: 60

61 ICB Bookkeeping to Trial Balance Playlist Handbook General ledger of Decorex Distributors 61

62 Section A: Revision Video Questions Bank reconciliation statement of 62