FACULTY OF MANAGEMENT SCIENCES

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FACULTY OF MANAGEMENT SCIENCES DEPARTMENT: ACCOUNTING ECONOMICS AND FINANCE QUALIFICATION: DIPLOMA IN ACCOUNTING AND FINANCE QUALIFICATION CODE: 06BDAF LEVEL: 5 COURSE: FINANCIAL ACCOUNTING 101 DATE:

1 FACULTY OF MANAGEMENT SCIENCES DEPARTMENT: ACCOUNTING ECONOMICS AND FINANCE QUALIFICATION: DIPLOMA IN ACCOUNTING AND FINANCE QUALIFICATION CODE: 06BDAF LEVEL: 5 COURSE: FINANCIAL ACCOUNTING 101 DATE: NOVEMBER 2015 COURSE CODE: FAC511S SESSION: FIRST DURATION: 3 HOURS MARKS: 100 EXAMINER(S) MODERATOR: FIRST OTPPORTUNITY EXAMINATION QUESTION PAPER G JANSEN, C MAHINDI, A KETJINGANDA, Z STELLMACHER, Z MARITZ, M DIKUUA E MUSHONGA THIS QUESTION PAPER CONSISTS OF 5 PAGES (Excluding this front page) INSTRUCTIONS 1. Answer ALL the questions. 2. Write clearly and neatly. 3. Number the answers clearly.

2 QUESTION 1 (21 Marks) The following information is available for C. Dreyer a sole trader registered for VAT for the month of March 2015: i) Sales on credit for the month of March 2015 amounted to N$ net of VAT; ii) Sales returns (all credit) for the month of March 2015 amounted to N$ iii) net of VAT; Purchases on credit for the month of March 2015 amounted to N$ net of VAT; iv) Purchases returns (all credit) for the month of March 2015 amounted to N$ net of VAT; v) C. Dreyer pays N$ in VAT to the Receiver of Revenue for VAT monthly by direct debit on the 15th of every month. The VAT liability of C. Dreyer as at 01 March 2015 was N$ and the standard VAT rate is 15%. The balance on the bank account on 01 March 2015 was a debit balance of N$ C. Dreyer deals with standard goods falling under the standard VAT rate. Required: a) Prepare the relevant journal entries to account for VAT. (14 b) Prepare the VAT Control Account as it should appear in your general ledger and indicate if VAT is due or receivable. (7

3 QUESTION 2 (41 The following trial balance was extracted from the books of A. Makosa, a sole trader, on 31 December 2015: Debit Credit N$ N$ Land and buildings Motor vehicles Accumulated depreciation on motor vehicles Fixtures and fittings Accumulated depreciation on fixtures and fittings Inventory as at 1/1/ Receivables Payables Cash balances 800 Bank Interest charged by supplier on overdue 340 balances Sales Purchases Purchase returns Sales returns Discounts Carriage inwards 700 Advertising and media costs Light and heat Telephone and internet Insurance Rates, water charges and refuse Wages and salaries % long term bank loan Long term loan interest paid 30/06/ Irrecoverable debts Drawings Accumulated losses Capital The following information, which has not been accounted for above, is also available: i. The inventory count as at 31 December 2015 showed closing inventory valued at

4 N$ ii. During 2015, A. Makosa took the following for personal use: a. N$1 750 in inventory items; b. N$2 220 from the bank. In addition, one quarter of the insurance costs above relate to A. Makosa s personal insurance. iii. A delivery of Product X costing N$1 200 was dispatched to a customer on 30 December These goods were correctly treated during the inventory count on 31 December 2015; however the sales invoice associated with the sale was not posted to the books and records of A, Makosa as at 31 December A. Makosa has a standard mark-up of 15% on Product X. iv. N$750 of advertising and media costs included in the trial balance above are prepaid for v. Included in motor vehicles is a delivery van which originally cost N$ Accumulated depreciation on the delivery van as at 1 January 2015 was N$ On 29 December 2015 the delivery van crashed and was written off. The insurance company has indicated that N$6 545 will be paid out on the insurance policy. A. Makosa received the cheque from the insurance company for N$6 545 in January The delivery van was not replaced. (See point vi. below for the depreciation policy of A. Makosa) vi. Allowance to be made for depreciation as follows: a. Land and buildings 2% straight line method b. Motor vehicles 10% straight line method c. Fixtures and fittings 10% reducing balance method (Depreciation should be calculated to the nearest whole number. A. Makosa charges full year depreciation in the year of purchase and none in the year of disposal.) vii. Unpaid interest at 31/12/2015 on the loan should be accrued.

5 You are required to prepare: (a) The statement of profit or loss for the year ended 31 December (19 (b) The statement of financial position as at 31 December (22 Show all your workings. Round off all amounts to the nearest dollar. QUESTION 3 (30 Marks) The register for property, plant & equipment of Fly-Africa (Pty) Ltd is presented to you. As the assistant accountant you are required to prepare all the entries and calculations, and satisfy all disclosure requirements regarding property, plant & equipment in the financial statements of the company for the financial year ended 30 June A summary of the register of property, plant and equipment at 1 July 2014 is as follows: N$ Furniture: Cost Accumulated depreciation Motor vehicles: Cost Accumulated depreciation Machinery: Cost: Machine X Machine Y Machine Z Accumulated depreciation: Machine X Machine Y - Machine Z Land: Cost Additional information: 1. The following rates and methods of depreciation are applicable: Property, plant and equipment are accounted for on the cost model. Land no depreciation Furniture 10% straight line Motor vehicles 20% straight line Machinery 20% reducing balance method The assets have no residual values.

6 2. On 31 December 2014 a delivery vehicle with an original cost of N$ was sold for N$7 500 and this amount was credited to the motor vehicle account. On 1 July 2014 the accumulated depreciation of the vehicle amounted to N$ Machine B was obtained and put into operation on 30 June Land consists of stand no.65 in the northern industrial area and was purchased in The board of directors estimated the current market value of the property to be N$ at 30 June The land is not classified as an investment property. 5. The current market value of the other assets does not differ materially from their carrying amounts. 6. No other transactions relating to property, plant & equipment took place during the year. REQUIRED: a) Provide the Property, Plant and Equipment (PPE) note to the financial statements of Fly-Africa (Pty) Ltd for the reporting period ended 30 June Note: A ccounting policy notes are not required. C omparative figures are not required. C alculations must be shown clearly. W here applicable, round calculated amounts to the nearest dollar. QUESTION 4 (8 According to the Conceptual Framework, there are various qualitative characteristics of financial statements. These characteristics are usually classified into two main groups. List the qualitative characteristics and also indicate the respective group in which it is classified. (8 END OF EXAMINATION PAPER

nam I 8 la UnIVERSITY

nam I 8 la UnIVERSITY OF SCIEnCE AnD TECHnOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE QUALIFICATION: BACHELOR OF MARKETING and BACHELOR OF ACCOUNTING QUALIFICATION