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.
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$164 250 net of VAT; ii) Sales returns (all credit) for the month of March 2015 amounted to N$14 200 iii) net of VAT; Purchases on credit for the month of March 2015 amounted to N$105 980 net of VAT; iv) Purchases returns (all credit) for the month of March 2015 amounted to N$11 200 net of VAT; v) C. Dreyer pays N$10 000 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$13 700 and the standard VAT rate is 15%. The balance on the bank account on 01 March 2015 was a debit balance of N$ 12 500. 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
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 320 000 Motor vehicles 45 000 Accumulated depreciation on motor vehicles 17 580 Fixtures and fittings 23 750 Accumulated depreciation on fixtures and fittings 5 250 Inventory as at 1/1/2015 18 220 Receivables 82 750 Payables 92 540 Cash balances 800 Bank 2 140 Interest charged by supplier on overdue 340 balances Sales 595 710 Purchases 285 050 Purchase returns 8 220 Sales returns 19 110 Discounts 840 910 Carriage inwards 700 Advertising and media costs 2 770 Light and heat 2 410 Telephone and internet 6 140 Insurance 15 900 Rates, water charges and refuse 9 770 Wages and salaries 62 170 6% long term bank loan 71 750 Long term loan interest paid 30/06/15 2 150 Irrecoverable debts 3 120 Drawings 7 120 Accumulated losses 21 550 Capital 135 560 929 660 929 660 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
N$21 210. 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 2015. 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 2015. 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 2016. v. Included in motor vehicles is a delivery van which originally cost N$15 000. Accumulated depreciation on the delivery van as at 1 January 2015 was N$7 450. 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$6 545 in January 2016. The delivery van was not replaced. (See point vi. below for the depreciation policy of A. Makosa) vi. Allowance to be made for depreciation as follows: a. Land and buildings 2% straight line method b. Motor vehicles 10% straight line method c. Fixtures and fittings 10% reducing balance method (Depreciation should be calculated to the nearest whole number. A. Makosa charges full year depreciation in the year of purchase and none in the year of disposal.) vii. Unpaid interest at 31/12/2015 on the loan should be accrued.
You are required to prepare: (a) The statement of profit or loss for the year ended 31 December 2015. (19 (b) The statement of financial position as at 31 December 2015. (22 Show all your workings. Round off all amounts to the nearest dollar. QUESTION 3 (30 Marks) The register for property, plant & equipment of Fly-Africa (Pty) Ltd is presented to you. As the assistant accountant you are required to prepare all the entries and calculations, and satisfy all disclosure requirements regarding property, plant & equipment in the financial statements of the company for the financial year ended 30 June 2015. A summary of the register of property, plant and equipment at 1 July 2014 is as follows: N$ Furniture: Cost 22 000 Accumulated depreciation 8 000 Motor vehicles: Cost 60 000 Accumulated depreciation 31 000 Machinery: Cost: Machine X 15 000 Machine Y 63 000 Machine Z 18 000 Accumulated depreciation: Machine X 7 000 Machine Y - Machine Z 3 000 Land: Cost 150 000 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.
2. On 31 December 2014 a delivery vehicle with an original cost of N$18 000 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$11 000. 3. Machine B was obtained and put into operation on 30 June 2014. 4. Land consists of stand no.65 in the northern industrial area and was purchased in 2010. The board of directors estimated the current market value of the property to be N$200 000 at 30 June 2015. 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 2015. 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