Tutorial letter 101/3/2012 FINANCIAL ACCOUNTING REPORTING FAC1601 SEMESTER 1 and 2

Transcription

1 Tutorial letter 101/3/2012 FINANCIAL ACCOUNTING REPORTING FAC1601 SEMESTER 1 and 2 Department of Financial Accounting This tutorial letter contains important information about your module. Bar code

2 CONTENTS 1. INTRODUCTION AND WELCOME PURPOSE AND OUTCOMES OF THE MODULE COMMUNICATION WITH YOUR LECTURERS STUDY MATERIAL STUDENT SUPPORT SERVICES ASSESSMENT EXAMINATIONS PROPOSED STUDY PROGRAMME FOR APPENDIX A: FIRST SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 1) APPENDIX B: FIRST SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 2) APPENDIX C: SECOND SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 1) APPENDIX D: SECOND SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 2)

3 1. INTRODUCTION AND WELCOME We are pleased to welcome you to this module and hope that you will find it both interesting and rewarding. We will do our best to make your study of this module successful. You will be well on your way to success if you start studying early in the semester and resolve to do the assignments properly. You will receive a number of tutorial letters during the year. A tutorial letter is our way of communicating with you about teaching, learning and assessment. This tutorial letter contains important information about the scheme of work, resources and assignments for this module. We urge you to read it carefully and to keep it at hand when working through the study material, preparing the assignments, preparing for the examination and addressing questions to your lecturers. Please read Tutorial Letter 301 in combination with this tutorial letter as it gives you an idea of generally important information when studying at a distance and within a particular College. In this tutorial letter (101), you will find the assignments and assessment criteria as well as instructions on the preparation and submission of the assignments. It also provides all the information you need with regard to the prescribed study material and other resources and how to obtain them. Please study this information carefully and make sure that you obtain the prescribed material as soon as possible. Right from the start we would like to point out that you must read all the tutorial letters you receive during the semester immediately and carefully, as they always contain important and, sometimes, urgent information. You will also find useful information of a general nature in Tutorial Letter 301 and in the booklet My Unisa. Having read through these, you should be well prepared to begin. We hope that you will enjoy this module and wish you all the best! 2. PURPOSE AND OUTCOMES OF THE MODULE The purpose of this module is to introduce students to financial accounting and reporting referring to some of the International Accounting Standards issued by the International Accounting Standards Board. In this course the focus of financial reporting and the analysis of financial statements are on partnerships and close corporations. You must also be able to record the accounting entries for the formation of, admittance to, retirement or death of a partner and the liquidation of partnerships. Further, you must be able to record the accounting entries to the capital structure of companies, be able to record the transactions relating to businesses with branches. Lastly, you must be able to prepare calculations relating to the time value of money. 3. COMMUNICATION WITH YOUR LECTURERS The lecturers responsible for this module: Mr MT Hlongoane Mrs FM Osman Mr A Eysele Mr J van Staden Mr RN Ngcobo Mrs B Ceki Module Telephone Number: Module Address: fac1601@unisa.ac.za 3

4 All queries that are not of a purely administrative nature but are about the content of this module should be directed to us. Please have your study material with you when you contact us. and telephone numbers are included above but you might also want to write to us. Letters should be sent to: The module leader (FAC1601) Department of Financial Accounting PO Box 392 UNISA 0003 PLEASE NOTE: Letters to lecturers may not be enclosed with or inserted into assignments. Communication with the university If you need to contact the university about matters not related to the content of this module, please consult the publication My Unisa, which you received with your study material. This brochure contains information on how to contact the university (e.g. to whom you can write for different queries, important telephone and fax numbers, addresses and details of the times certain facilities are open). Always have your student number at hand when you contact the university. Please note that all administrative enquiries should be directed to the Unisa Contact Centre. Enquiries will then be channelled to the correct department. The details are as follows: Calls (RSA only) International calls Fax number (RSA) (012) Fax number (international) study-info@unisa.ac.za 4. STUDY MATERIAL 4.1 Inventory letter You should have received an inventory letter telling you what you have received in your study package and also showing items that are still outstanding. Also see the brochure entitled My Unisa. Check the study material that you have received against the inventory letter. You should have received all the items listed in the letter, unless there is a statement like out of stock or not available. If any item is missing, follow the instructions on the back of the inventory letter without delay. PLEASE NOTE Your lecturers cannot help you with missing study material. Please contact the Unisa Contact Centre at (RSA only), or (international calls) (also see paragraph 3 above). You can also send an to despatch@unisa.ac.za. 4

5 4.2 Study material The Department of Despatch should supply you with the following study material for this module: One study guide Tutorial Letters 101 and 301 at registration and others later Apart from Tutorial Letters 101 and 301, you will also receive other tutorial letters during the semester. These tutorial letters will not necessarily be available at the time of registration, but will be despatched to you as soon as they are available or needed (for instance, for feedback on assignments). If you have access to the internet, you can view the study guides and tutorial letters for the modules for which you are registered on the university s online campus, myunisa, at Prescribed textbook Your prescribed textbook for this module is: About Financial Accounting, Volume 2, 4 th Edition by Berry PR, et al. LexisNexis Butterworths. Durban Please consult the list of official booksellers and their addresses listed in My Unisa. If you have any difficulty obtaining books from these bookshops, please contact the Prescribed Books Section. 5. STUDENT SUPPORT SERVICES For information on the various student support systems and services available at Unisa (e.g. student counseling, tutorial classes, language support), please consult the publication My Unisa, which you received with your study material. 5.1 Contact with fellow students Study groups It is advisable to have contact with fellow students. One way to do this is to form study groups. The addresses of students in your area may be obtained from the following department: Directorate: Student Administration and Registration PO Box 392 UNISA 0003 Please contact the Unisa Contact Centre at myunisa If you have access to a computer that is linked to the internet, you can quickly access resources and information at the university. The myunisa learning management system is Unisa's online campus that will help you to communicate with your lecturers, with other students and with the administrative departments of Unisa all through the computer and the internet. To go to the myunisa website, start at the main Unisa website, and then click on the Login to myunisa link on the right-hand side of the screen. This should take you to the myunisa website. You can also go there directly by typing 5

6 Please consult the publication My Unisa, which you received with your study material, for more information on myunisa. 5.2 Discussion classes Group discussions, offered by the lecturers of module FAC1601, will be held at predetermined venues during each semester. You will be notified of the dates, times and venues of these classes. The abovementioned discussion classes are the only official lectures offered by the lecturers of module FAC1601. Lectures offered by private organisations or persons are not the responsibility of the Department of Financial Accounting at Unisa. Lecturers (or the Department of Financial Accounting) should not be consulted with enquiries in this regard. 6. ASSESSMENT 6.1 Assignments and learning Assignments are seen as part of the learning material for this module. As you do the assignment, study the reading texts, consult other resources, discuss the work with fellow students or tutors or do research, you are actively engaged in learning. Looking at the assessment criteria given for each assignment will help you to understand what is required of you more clearly. 6.2 General remarks PLEASE NOTE: Enquiries about assignments (e.g. whether or not the university has received your assignment or the date on which an assignment was returned to you) must be directed to the Unisa Contact Centre at (RSA only), or (international calls) (also see par 3 above). You might also find information on myunisa. To go to the myunisa website, start at the main Unisa website, and then click on the login to myunisa link under the myunisa heading on the screen. This should take you to the myunisa website. You can also go there directly by typing You can also send an to assign@unisa.ac.za. Assignments should be addressed to: The Registrar PO Box 392 UNISA 0003 You may submit written assignments and assignments done on mark-reading sheets either by post or electronically via myunisa. Assignments may not be submitted by fax or . For detailed information and requirements as far as assignments are concerned, see the brochure My Unisa, which you received with your study material. To submit an assignment via myunisa: Go to myunisa. Log in with your student number and password. Select the module. Click on assignments in the menu on the left. 6

7 Click on the assignment number you want to submit. Follow the instructions on the screen. 6.3 Feedback on assignments You will receive the correct answers automatically for multiple-choice questions. Feedback on compulsory assignments will be sent to all students registered for this module in a follow-up tutorial letter, and not only to those students who submitted the assignments. The tutorial letter number will be 201, 202, etc. As soon as you have received the feedback, please work through it. The assignments and the feedback on these assignments constitute an important part of your learning and should help you to be better prepared for the next assignment and the examination. 6.4 Study process You may encounter fewer problems when you work as follows: Paragraph 8 of this tutorial letter sets out the suggested study programme for semester 1 and 2. First semester students: refer to paragraph 8.1 and second semester students: refer to paragraph 8.2. Study the relevant study units of the Study Guide for assignment 01. Do all the exercises in the study guide and make sure that you understand the contents of the study material. Do assignment 01 and send it to UNISA for marking. Remember, the submission of assignment 01 is compulsory for examination admission and contributes to your year mark (refer to paragraph 6). Study the relevant study units of the Study Guide for assignment 02 and do the assignment. Remember, the submission of assignment 02 is compulsory and contributes to your year mark (refer to paragraph 6). After completing an assignment, carry on with the study programme. Do not wait for the suggested solution or for the return of the marked assignment. Students often fail to plan their studies properly in order to achieve specific study goals at predetermined dates. This leads to a haphazard approach to studying and the use of ineffective study techniques. The study programme for each semester is herein provided to assist you in this regard. The programme indicates the dates during which certain sections of the study material should be studied, as well as the dates by which the compulsory assignments should be completed. The study programme is based on the following assumptions: That study will commence on either 15 January 2012 for the first semester or 1 July 2012 for the second semester and that the course should be completed leaving sufficient time for revision. That you should study at least 6 hours per week. We are of the opinion that this is within your reach. We are convinced that, if you adhere to the suggested programme, you should be able to master the subject. It is very important that the subject matter covered in the study units should be mastered and not just be skimmed. If you happen to register late or fall behind with this programme, extra effort on your part will be necessary. Appendix A and B contains the compulsory assignment 01 and 02 for students who are registered for FAC1601 in the first semester. 7

8 Appendix C and D contains the compulsory assignment 01 and 02 for students who are registered for FAC1601 in the second semester. NB: Note that these assignments are not the same. You must ensure that you submit the assignments which pertain to the semester that you are registered in for FAC1601. IF YOU ARE REGISTERED FOR FAC1601 IN THE SECOND SEMESTER YOU CANNOT SUBMIT ANY ASSIGNMENTS DURING THE FIRST SEMESTER. ASSIGNMENTS INCORRECTLY SUBMITTED WILL NOT BE MARKED AND RETURNED TO STUDENTS. 6.5 Important aspects regarding assignments There are 4 assignments for this module: Assignment 01 is a multiple choice assignment that is compulsory and contributes 50% towards your year mark. If you do not submit this assignment you will not be admitted to the examination; Assignment 02 is a multiple choice assignment that is also compulsory, and contributes 50% towards your year mark; Assignments 03 and 04 are long question assignments. These assignments must NOT be submitted to UNISA for marking but forms an important part of your study material and exam questions will definitely be set on these sections. Please keep copies of your submitted assignments and if submitted through myunisa, proof that you submitted the assignment. Assignments constitute an integral part of the tutorial matter. Study material on which assignments are based is given in Annexure A (for students registered for the first semester) or Annexure B (for students registered for the second semester). Assignments and tutorial letters must also be studied for examination purposes. 6.6 Finality of the due dates The receipt of assignments after the due date disrupts our marking programme and as the uncontrolled submission of assignments creates administrative problems. No extension will be granted for the submission of assignments and regrettably requests for the extension of the due date will NOT be considered. 6.7 Assessment of assignments Although students may work together when preparing assignments, each student must submit his or her own individual assignment. It is unacceptable for students to discuss the answers on myunisa. That is copying (a form of plagiarism) and you may be penalised or subjected to disciplinary proceedings by the university. 7. EXAMINATIONS For general information and requirements as far as assignments are concerned, see the brochure My Unisa, which you received with your study material. 7.1 Examination admission For students to fully benefit from our formative tuition and assessment, the Management of the University has taken a decision to introduce two compulsory assignments in all modules to be submitted by set due dates. Submission of the first compulsory assignment by its due date will give a student admission to the examination in the particular module and the mark obtained for that assignment will contribute towards the 8

9 final mark for that module. The second assignment is also compulsory and contributes equally to the final mark. Please ensure that the compulsory assignments reaches the University before the due date as late submission of assignment 01 will result in you not being admitted to the examination. 7.2 How will this work in practice? The year mark contribution (that is part of the final mark) is calculated as follows: 50% of the mark obtained for assignment 01 Plus 50% of the mark obtained for assignment 02 If you only submit assignment 01, your year mark will be 50% of the mark obtained for this assignment. This will then be your year mark out of a possible 100%. If, for example, you obtain 80% for assignment 01 and 0% for assignment 02, your year mark will be 40%. A year mark often causes a student to pass or fail this module. According to University policy you require a sub-minimum of 40% in the examination before your year mark is taken into consideration. In other words, if you do not obtain at least 40% in the examination, you will automatically fail, and your final mark will be the mark you obtained in the examination. Students require a final mark of 50% to pass a module. This final mark is calculated as follows: Example: (10% x of the year mark) + (90% x mark obtained in the examination) A B C D Exam mark contribution Year mark contribution to final required to pass (50% minus mark at 10% year mark contribution) Average of marks for assignment 1 & 2 (Year mark) Minimum exam mark required to pass (C 0,9) Student 1 100% 10% 40% 45% Student 2 70% 7% 43% 48% Student 3 50% 5% 45% 50% Student 4 30% 3% 47% 52% Student 5 20% 2% 48% 53% Student 6 10% 1% 49% 54% Student 7 0% 0% 50% 56% If you obtain between 40% and 49% as a final mark, you will be allowed to write a supplementary examination. The supplementary examination will be written at the end of the next semester. This means that if you qualify for a supplementary examination in May/June, you will write the FAC1601 paper in October/November. Similarly, students who qualify for a supplementary examination in October/November will write this paper in May/June of the following year. A student may, however, write only one supplementary examination per enrolment. If, for any reason, you transfer your exam period for FAC1601 to a following semester, you need to submit Assignment 01 and 02 before the due date in the semester for which you originally registered for the course. The year mark you obtain will then be carried forward to the next semester because you will not be allowed to submit any assignments in the semester to which you have changed. By applying to have your semester changed to a following semester, in effect, you are applying for an aegrotat examination. However, you still 9

10 need a year mark that will be taken into account as explained above hence the need to submit the compulsory assignments in the semester for which you originally registered. 7.3 Examination period This module is offered in a semester period of 15 weeks. This means that if you are registered for the first semester, you will write the examination in May/June 2012 and the supplementary examination will be written in October/November If you are registered for the second semester, you will write the examination in October/November 2012 and the supplementary examination will be written in May/June During the semester, the Examination Section will provide you with information regarding the examination in general, examination venues, examination dates and examination times. This information can also be abtained from the myunisa site. Click on Examinations when you are logged into the site. 7.4 Examination paper At the end of the semester you will be required to write a two hour examination paper. No theoretical or multiple choice questions will be asked. You will only be required to apply the theoretical knowledge acquired in the questions asked. Exam questions are set on the content of the whole course not only on assignments 1 and 2. You are advised to consult the examination time-table timeously in order to plan your revision programme accordingly. Please start early to avoid cramming at the last moment. 7.5 Previous examination paper The May/June 2011 examination paper will be included in one of the tutorial letters that will be issued for this module. We advise you, however, not to focus only on this examination paper as your only source in your preparation for the examination as the content of examination paper changes from year to year. You may, however, accept that the type of questions that will be asked in the examination will be similar to those asked in the activities in your study guide and in the assignments. 7.6 Tutorial letter with information on the examination To help you in your preparation for the examination, you will receive a tutorial letter that will explain the format of the examination paper and set out what and how to study for examination purposes. 10

11 8. PROPOSED STUDY PROGRAMME FOR 2012 Please note that the "DUE DATE" is the date on which the assignment must reach the Unisa campus in Pretoria. Therefore, please provide sufficient time for any delays due to distance from Pretoria, if not submitted via myunisa. 8.1 First semester DATE STUDY MATERIAL AND ASSIGNMENTS ± 16/1 to 17/2 Study: Study units 1 to 4 ± 18/2 to 20/2 Do Assignment 01 (compulsory assignment): Due date 12/03/2012 ± 20/2 Submit Assignment 01 (NB: DO NOT WAIT UNTIL 12/03/2012) ± 20/2 to 12/3 Study: Study units 5 to 7 ± 13/3 to 19/3 Do and mark Assignment 03 (do not submit this assignment) ± 21/3 to 23/3 Do Assignment 02 (compulsory assignment): Due date 09/04/2012 ± 25/3 Submit Assignment 02 (NB: DO NOT WAIT UNTIL 09/04/2012) ± 25/3 to 15/4 Study: Study units 8 to 10 ± 16/4 to 19/4 Do and mark Assignment 04 (do not submit this assignment) The solutions to Assignments 03 and 04 are provided in the same tutorial letter 20/4 to examination Revision During May/June 2012: EXAMINATION 8.2 Second semester DATE STUDY MATERIAL AND ASSIGNMENTS ± 2/7 to 31/7 Study: Study units 1 to 4 ± 1/8 to 3/8 Do Assignment 01 (compulsory assignment): Due date 20/08/2012 ± 6/8± Submit Assignment 01 (NB: DO NOT WAIT UNTIL 20/08/2012) ± 6/8 to 20/8 Study: Study units 4 to 7 ± 21/8 to 27/8 Do and mark Assignment 03 (do not submit this assignment) ±28/8 to 30/8 Do Assignment 02 (compulsory assignment): Due date 10/09/2012 ± 31/8 Submit Assignment 02 (NB: DO NOT WAIT UNTIL 10/09/2012) ±1/9 to 21/9 Study: Study units 8 to 10 ±22/9 to 25/9 Do Assignment 04 (do not submit this assignment) The solutions to Assignments 03 and 04 are provided in the same tutorial letter 26/9 to examination Revision During October/November 2012: EXAMINATION We hope that you will enjoy this module and we wish you success with your studies. Kind regards Mr M Hlongoane Mrs FM Osman Mr A Eysele Mr J van Staden Mr RN Ngcobo Mrs B Ceki LECTURERS: FINANCIAL ACCOUNTING REPORTING 1 - MODULE 2 (FAC1601) 11

12 APPENDIX A: FIRST SEMESTER COMPULSORY ASSIGNMENT ASSIGNMENT 01: (FIRST SEMESTER 2012) UNIQUE NO: DUE DATE: 12 MARCH 2012 NB: 1. This assignment must be answered on a mark-reading sheet if submitted by post or can be submitted electronically via myunisa. 2. Before answering this assignment, please read paragraphs 6 and 7 of this tutorial letter. () 3. This assignment covers study units 1 4 of the study guide. 4. We cannot grant any extension for the late submission of this assignment since the due date was set by the management of the university. No correspondence or telephone conversations will be conducted in this regard. 5. Important aspects regarding multiple-choice assignments answered on a mark-reading sheet For detailed information and requirements as far as assignments are concerned, see My Unisa which you received with your study package. Work carefully through the relevant tutorial matter before you do the assignment. Calculate your answer on a separate piece of paper before completing the mark-reading sheet. REMEMBER: There is only one correct answer for each question. Do not make more than one mark per question. All questions are equal in value. Indicate your student number correctly. Indicate the assignment number correctly. Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 first semester. FOR HARD COPY SUBMISSION: Only the provided mark-reading sheets may be used. Colour in the correct block clearly with a HB pencil. Do not colour outside the block, or colour in the block with a pen. Do not make corrections with correction fluid. Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with sticky tape use another one. Do not staple the mark-reading sheet to another piece of paper. Do not submit answers on a written sheet of paper. Send only your mark-reading sheet to the Assignments Division in the appropriate envelope. 12

13 ASSIGNMENT 01 FIRST SEMESTER (continued) QUESTION 1 COB Retailer s trade is seasonal. The monthly sales of the business are 50% higher in November, December and January, than in the other nine months of the year. The business earns a gross profit of 25% on turnover in the mentioned three months and 20% during the remaining nine months. If the total sales for the year ended 28 February 2012 were R , the cost of sales for the same period was: 1. R R R R Given information for questions 2 to 4: Reid and Wright are in partnership trading as R&W Trading Centre. The following information relates to the partnership: Balances as at 28 February 2012 R Capital: Reid Capital: Wright Current account: Reid (Dr) Current account: Wright (Cr) Drawings: Reid Drawings: Wright Mortgage Inventory (1 March 2011) Debtors control Creditors control Purchases Purchases returns Settlement discount granted Freight on sales Interest on mortgage loan Sales returns Insurance expense Settlement discount received Allowance for credit losses Forfeited settlement discount received Gross profit Bank Additional information: Abstract from terms of the partnership agreement: 1. Interest on capital will be calculated at a rate of 5% per annum on the opening balances of the capital accounts and at a rate of 8% per annum on the opening balances of the current accounts. 2. Interest will be charged at a rate of 5% per annum on the balance of the drawings accounts at the end of each month. The interest must be capitalised against the current accounts of the partners. 13

14 ASSIGNMENT 01 FIRST SEMESTER (continued) Year-end adjustments: 1. On 28 February 2012 the inventory on hand amounted to R An outstanding debt of R3 000 is irrecoverable and must be written off. A debt of R1 800 written off during the year has been recovered and the payment is expected to be received on 1 March The allowance for credit losses must be adjusted to R R&W Trading Centre were offered a discount of 10% on an amount of R9 500 owing to a supplier provided the supplier is paid before 28 February R&W Trading Centre intends taking the advantage of the discount offered. 5. The terms of the mortgage loan provide for interest on the loan to be calculated at a rate of 9% per annum on the outstanding amount of the loan at the end of the financial year. QUESTION 2 Which one of the following alternatives represents the correct amount that must be disclosed as revenue in the statement of comprehensive income of R&W Trading Centre for the year ended 28 February 2012? 1. R R R R QUESTION 3 Which one of the following alternatives represents the correct amount that must be disclosed as credit losses in the statement of comprehensive income of R&W Trading Centre for the year ended 28 February 2012? 1. R R R R4 400 QUESTION 4 Which one of the following alternatives represents the correct amount that must be disclosed as total equity in the statement of financial position of R&W Trading Centre as at 28 February 2012? 1. R R R R

15 ASSIGNMENT 01 FIRST SEMESTER (continued) Given information for questions 5 to 6: Wright and Judge were in a partnership, trading as W&J Attorneys at Law, and they shared profits/losses in the ratio of 3:2 respectively. They agreed to admit Jury as a partner with effect from 1 February It was decided that Jury must contribute R in cash on 1 February 2012 for a 20% share in the fair value of the new partnership. Wright and Judge relinquished the 20% share to Jury according to the ratio of 1:2 respectively. The following trial balance relates to the partnership prior to any valuation adjustments: W&J ATTORNEYS AT LAW TRIAL BALANCE AT 31 JANUARY 2012 R Capital: Wright Capital: Judge Asset replacement reserve Furniture & Equipment Vehicles Fees receivable Creditors control In preparation of the change in the ownership structure of the existing partnership, the following fair values regarding the assets thereof were obtained: Furniture and equipment, R ; Vehicles, R ; Fees receivable, R77 250; Goodwill, R QUESTION 5 Which one of the following alternatives represents the correct amounts to be closed-off from the valuation account to the partners capital accounts? 1. Capital: Wright R40 050; Capital: Judge R Capital: Wright R46 050; Capital: Judge R Capital: Wright R28 050; Capital: Judge R Capital: Wright R34 050; Capital: Judge R QUESTION 6 Which one of the following alternatives represents the profit-sharing ratio of Wright, Judge and Jury? 1. 3 : 2 : 2, respectively 2. 8 : 4 : 3, respectively 3. 2 : 1 : 2, respectively 4. 9 : 6 : 3, respectively 15

16 ASSIGNMENT 01 FIRST SEMESTER (continued) QUESTION 7 Othello, Macbeth and Romeo were in a partnership trading as OMR Partners and sharing profits/losses in the ratio of 5:3:2 respectively. Macbeth decided to retire from the partnership on 31 December 2011, the end of the financial year. The partners agreed that the capital balance of Macbeth will be settled in cash on 31 December The following is a preliminary statement of financial position of the partnership: OMR PATRNERS STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011 R ASSETS Non-current assets Property, plant and equipment (Land and buildings) Current assets Inventories Trade receivables Cash and cash equivalents EQUITY AND LIABILITIES Total equity Capital (Othello R ; Macbeth R ; Romeo R73 800) Current accounts (Othello R68 000; Macbeth R59 500(Dr); Romeo R31 300) Other components of equity (Asset replacement reserve) Total liabilities Non-current liabilities Long-term borrowings Current liabilities Trade and other payables Additional information: In preparation of the retirement of Macbeth, the following valuations/decisions were made: 1. Inventory, R30 000; 2. An allowance for credit losses to the amount of R5 000 must be created. Which one of the following alternatives represents the correct amount that must be paid by OMR Partners to Macbeth on 31 December 2011? 1. R R R R

17 ASSIGNMENT 01 FIRST SEMESTER (continued) Given information for questions 8 and 9: Mudd, Waters and Soeurs are partners in a firm of medical practitioners, trading as Rea Medicals, and they share profits and losses in the ratio of 5:2:1 respectively. They have considered to liquidate the partnership for quite some time, and received various offers for the land and buildings as well as for the furniture and equipment. Since they have decided to accept the most favourable of these offers, they planned to liquidate the partnership simultaneously on 1 July Before the liquidation entries were made, the trial balance of the partnership was prepared as follows: REA MEDICALS TRIAL BALANCE AT 1 JULY 2011 Capital - Mudd... Capital Waters... Capital Soeurs... Current account - Mudd... Current account Waters... Current account Soeurs... Long-term loan at Kwasa-Kwasa Bank... Creditors control... Land and buildings at cost... Furniture and equipment at cost... Accumulated depreciation: Furniture and equipment... Bank... Debit Credit R R On 1 July 2011 the following transactions with regard to the liquidation took place: The land and buildings were sold for cash, R ; property registration and transfer costs amounting to R were paid by the Rea Medicals. Furniture and equipment with a carrying amount of R was taken over (not paid for immediately) by Waters at an agreed amount of R45 000, and the remaining furniture and equipment was sold at a profit of R25 000, cash. A discount of R5 000 was received on full settlement of the creditors accounts. The long-term loan at Kwasa-Kwasa Bank was settled in full and the bank levied an early settlement penalty of R The liquidation costs amounted to R22 500, and were paid. QUESTION 8 Which one of the following alternatives indicate the correct amount of profit/loss made on the liquidation of Rea Medicals. 1. R profit 2. R profit 3. R profit 4. The partnership broke even. 17

18 ASSIGNMENT 01 FIRST SEMESTER (continued) QUESTION 9 Which one of the following alternatives indicates the correct balances of the partners capital accounts after the liquidation entries were made, but prior to the settlement of the balances on the capital accounts? 1. Mudd, R (credit); Waters, R (credit); and Soeurs, R (credit) 2. Mudd, R (credit); Waters, R (credit); and Soeurs, R (credit) 3. Mudd, R (credit); Waters, R (credit); and Soeurs, R (credit) 4. Mudd, R (credit); Waters, R (credit); and Soeurs, R (credit) QUESTION 10 Annette, Chris and Rebecca are in a partnership, sharing in profits and losses in a ratio of 5:3:2, respectively. They decided to liquidate the partnership by disposing of the assets piecemeal. No discount will be received when liabilities are settled. At the starting date of the liquidation, the following list of balances was drawn up from the accounts in the general ledger of the partnership: Capital - Annette (credit)... Capital - Chris (credit)... Capital - Rebecca (credit)... Current account - Annette (debit)... Current account - Chris (credit)... Current account - Rebecca (debit)... Goodwill... Asset replacement reserve... Long-term loan, unsecured... Creditors control... Furniture and equipment at cost... Accumulated depreciation: Furniture and equipment... Inventories... Debtors control... Bank favorable... R The partners decided to distribute the cash amongst them as it becomes available in such a manner that it would not be necessary for the partners to repay any of the interim cash repayments at a later stage due to capital deficits that arose. At the first realisation of the assets, all of the inventories were sold for R45 000, cash. Indicate the option that correctly shows the amounts payable to the partners in respect of the first interim repayment. Apply the loss-absorption-capacity method in your calculation. 1. Annette, R6 875; Chris, R and Rebecca, R0 2. Annette, R8 500; Chris, R5 100 and Rebecca, R Annette, R9 150; Chris, R and Rebecca, R Annette, R16 875; Chris, R and Rebecca, R

19 APPENDIX B: FIRST SEMESTER COMPULSORY ASSIGNMENT ASSIGNMENT 02: (FIRST SEMESTER 2012) UNIQUE NO: DUE DATE: 9 APRIL 2012 NB: 1. This assignment must be answered on a mark-reading sheet if submitted by post or can be submitted electronically via myunisa. 2. Before answering this assignment, please read paragraphs 6 and 7 of this tutorial letter. () 3. This assignment covers study units 1 7 of the study guide. 4. We cannot grant any extension for the late submission of this assignment since the due date was set by the management of the university. No correspondence or telephone conversations will be conducted in this regard. 5. Important aspects regarding multiple-choice assignments answered on a mark-reading sheet REMEMBER: For detailed information and requirements as far as assignments are concerned, see My Unisa which you received with your study package. Work carefully through the relevant tutorial matter before you do the assignment. Calculate your answer on a separate piece of paper before completing the mark-reading sheet. There is only one correct answer for each question. Do not make more than one mark per question. All questions are equal in value. Indicate your student number correctly. Indicate the assignment number correctly. Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 first semester. FOR HARD COPY SUBMISSION: Only the provided mark-reading sheets may be used. Colour in the correct block clearly with a HB pencil. Do not colour outside the block, or colour in the block with a pen. Do not make corrections with correction fluid. Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with sticky tape use another one. Do not staple the mark-reading sheet to another piece of paper. Do not submit answers on a written sheet of paper. Send only your mark-reading sheet to the Assignments Division in the appropriate envelope. 19

20 ASSIGNMENT 02 FIRST SEMESTER (continued) QUESTION 1 Consider the following statements: (a) A member s interest usually represents a member s right to share in a certain percentage of the profit(s)/losses of the close corporation. (b) The interest of any member in a close corporation must be a single interest which is expressed as a percentage of the total membership of the close corporation. (c) Not every member of a close corporation stands in a fiduciary relationship to the close corporation. (d) The members of a close corporation, having more than one member, may at any time enter into a written association agreement. (e) A close corporation must specify the date on which its financial year will end in its founding statement. Which one of the following alternatives represents the incorrect statement(s)? 1. All of the above 2. (c) 3. (a) and (b) 4. (a), (b), (d) and (e) QUESTION 2 Claus and Fred are the only two members of Financebox CC. The following information is extracted from the accounting records of the CC on 31 December 2011, the financial year-end: Debit Credit R R Member s contribution: Claus Member s contribution: Fred Loan to member: Claus Loan from member: Fred Long-term loan: Virtual Bank The following must still be taken into account: 1. Interest must be calculated at 10% per annum on the loan to the member, and must be capitalised. The loan of R was granted to Claus on 1 July 2011 and is immediately callable. 2. The interest on the loan from Fred must be calculated at 9% per annum, and is payable annually on 31 December. On 1 January 2011, Fred advance a loan amounting to R to the corporation. An additional amount of R was borrowed from Fred on 1 November Fred agreed to receive the interest for the 2011 financial year in cash on 1 January The long-term loan from Virtual Bank was received on 1 July 2010 and bears an interest at a rate of 12% per annum. In terms of the loan agreement, the interest is payable in cash annually on 30 June. 20

21 ASSIGNMENT 02 FIRST SEMESTER (continued) QUESTION 2 Which one of the following amounts must be disclosed as finance costs in the statement of comprehensive income for the year ended 31 December 2011 of Financebox CC? 1. R R R R QUESTION 3 Joel, Jazz and John are the only three members of the close corporation, Jazz Studio s CC. They have an equal interest in the profit(s)/loss(es) of the close corporation. The financial year-end of the CC is 28 February. On 1 March 2011 the balances of the member s contribution accounts were R each. During the financial year ended 28 February 2012 the following transactions were, amongst others, recorded in the books of the CC: On December 2011, Joel made an additional member s contribution of two brand new computers, worth R each. An amount of R was transferred from the retained earnings to an asset replacement reserve. The members decided that for the 2012 financial year, a profit distribution of R be made to members according to their member s interest in the CC. The profit distribution was not paid out in cash, but recorded as loans to the CC. On 28 February 2012, John made an additional member s contribution to the CC of R in cash. Which one of the following alternatives reflects the correct balances on the member s contribution accounts of Jazz Studio s CC as at 28 February 2012? 1. Joel: R47 500; Jazz: R50 000; John: R Joel: R52 500; Jazz: R56 000; John: R Joel: R87 000; Jazz: R71 000; John: R Joel: R81 000; Jazz: R50 000; John: R QUESTION 4 The following information appeared in the accounting records of Ndaba CC on 28 February 2012, the end of the financial year: R Retained earnings: 28 February Retained earnings: 1 March 2011 Transfer to asset replacement reserve at the end of the financial year Profit distribution paid to members during the financial year Income tax paid for the current financial year

22 ASSIGNMENT 02 FIRST SEMESTER (continued) Additional information: 1. The final tax assessment was received on 5 March 2012 and a balance of R was still outstanding for the year ended 28 February On 28 February 2012 the members agreed that an additional profit distribution of R will be paid to members on 15 March Which one of the following alternatives shows the correct amount of the profit before tax to be disclosed in the statement of comprehensive income for the year ended 28 February 2012 of Ndaba CC? 1. R R R R Given information for questions 5 and 6: Bob and Marley are the only members of BobMarley CC and have an interest in the corporation of 70% and 30% respectively. The following information was taken from the records of the close corporation on 30 June 2012, the end of the financial year: R Profit before tax Interim profit distribution Member s contribution: Bob Member s contribution: Marley Loan from member: Bob (1 July 2011) Loan from member: Marley (1 July 2011) Retained earnings: (1 July 2011) Additional information: 1. The actual normal income tax in respect of the financial year amounted to R and must still be recorded. 2. The members decided that an additional R of the total comprehensive income for the year ended 30 June 2012 would be distributed to them according to their interest in the corporation. This additional amount was not to be paid out in cash, but was to be left in the close corporation as loans from the members. 3. Half of the closing balances on the loans from the members at 30 June 2012 must be repaid on 30 November Interest is payable at 9% per annum on the opening balances of the loans from the members on 1 July each year and is not capitalised. The interest was paid on the due date. 5. The members had made further capital contributions of R each during the year. 22

23 ASSIGNMENT 02 FIRST SEMESTER (continued) QUESTION 5 Which one of the following alternatives represents the correct retained earnings for BobMarley CC at 30 June 2012? 1. R R R R QUESTION 6 Which one of the following alternatives represents the correct amount in respect of the loans from members to be included under the non-current liabilities in the statement of financial position as at 30 June 2012 of BobMarley CC? 1. R R R R Given information for questions 7 and 8: Swallows Ltd was registered on 1 March 2007 with an authorised share capital of ordinary shares and % preference shares. On 15 March 2007 the company issued ordinary shares, at R10 per share and % preference shares at R5 to the founders of the company. On 1 July 2007, Swallows Ltd issued ordinary shares at R12 per share and % preference shares at R8 per share to the public. In order to expand the business, the board of directors decided on 15 December 2010 to offer the total of the unissued ordinary shares to the public at the current trading price of R15 per share. The full offering was taken by the public and shares allotted on 31 January On 28 February 2012 declared a dividend of R0,50 per share on ordinary shares. QUESTION 7 Which one of the following alternatives represents the balance of the ordinary share capital in the general ledger of Swallows Ltd on 28 February 2012? 1. R R R R

24 ASSIGNMENT 02 FIRST SEMESTER (continued) QUESTION 8 Which one of the following alternatives represents the correct amount of dividends payable on 28 February 2012? 1. R R R R Given information for questions 9 and 10: The following information pertains to Guluva CC: GULUVA CC STAMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY ASSETS R R Non-current assets Property, plant and equipment Current assets Inventories Trade receivables Prepayments (Insurance) Other financial assets Cash and cash equivalents Total assets EQUITY AND LIABILITIES Total equity Members contributions Retained earnings Total liabilities Non-current liabilities Long-term borrowings Current liabilities Trade payables Current tax payable Total equity and liabilities

25 ASSIGNMENT 02 FIRST SEMESTER (continued) GULUVA CC STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2012 R Revenue Cost of sales ( ) Gross profit Other income Distribution, administrative and other expenses (30 800) Depreciation Credit losses Insurance expenses Water and electricity Salaries and wages Finance costs (400) Interest on long-term loan 400 Profit before tax Income tax expense (2 146) Profit for the year Other comprehensive income for the year Total comprehensive income for the year Additional information: 1. All sales and purchases are on credit. 2. The balance of the allowance for credit losses amounted to R2 000 and R1 800 for the financial year ending 2010 and 2011 respectively. 3. An interim profit distribution of R2 800 was paid during the year. 4. Guluva CC uses the direct method to prepare their statement of cash flows. QUESTION 9 Which one of the following alternatives represents the amount that must be disclosed as cash paid to suppliers and employees in the statement of cash flows of Guluva CC at 28 February 2012? 1. R R R R QUESTION 10 Which one of the following alternatives represents the amount that must be disclosed as cash generated from operations in the statement of cash flows of Guluva CC at 28 February 2012? 1. R R R R

26 APPENDIX C: SECOND SEMESTER COMPULSORY ASSIGNMENT ASSIGNMENT 01: (SECOND SEMESTER 2012) UNIQUE NO: DUE DATE: 20 AUGUST 2012 NB: 1. This assignment must be answered on a mark-reading sheet if submitted by post or can be submitted electronically via myunisa. 2. Before answering this assignment, please read paragraphs 6 and 7 of this tutorial letter. () 3. This assignment covers study units 1 4 of the study guide. 4. We cannot grant any extension for the late submission of this assignment since the due date was set by the management of the university. No correspondence or telephone conversations will be conducted in this regard. 5. Important aspects regarding multiple-choice assignments answered on a mark-reading sheet For detailed information and requirements as far as assignments are concerned, see My Unisa which you received with your study package. Work carefully through the relevant tutorial matter before you do the assignment. Calculate your answer on a separate piece of paper before completing the mark-reading sheet. REMEMBER: There is only one correct answer for each question. Do not make more than one mark per question. All questions are equal in value. Indicate your student number correctly. Indicate the assignment number correctly. Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 first semester. FOR HARD COPY SUBMISSION: Only the provided mark-reading sheets may be used. Colour in the correct block clearly with a HB pencil. Do not colour outside the block, or colour in the block with a pen. Do not make corrections with correction fluid. Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with sticky tape use another one. Do not staple the mark-reading sheet to another piece of paper. Do not submit answers on a written sheet of paper. Send only your mark-reading sheet to the Assignments Division in the appropriate envelope. 26