JULY 2013 SUPPLEMENTARY/AEGROTAT EXAMINATION MODULE: ACCOUNTING 1 PROGRAMME: BACHELOR OF COMMERCE DATE: 31 July 2013 TIME: 09h00 12h00 DURATION: 3 hours MARKS: 100 EXAMINER: P. Salikram MODERATOR: N. Naidoo INSTRUCTIONS TO CANDIDATES: 1. Candidates are required to answer ALL FOUR questions. 2. This is a closed book examination. 3. No written material may be brought into the examination room. 4. Write legibly and neatly. 5. Do not turn over this page until permitted by the Invigilator. This question paper consists of six (6) typed pages excluding the cover page
QUESTION ONE [25] 1.1 The Times Limited sold equipment for R3 000 on credit. At the date of the sale the carrying value of the equipment was R2 200. Which of the following alternative is correct? (2) A/C.DEBIT A/C.CREDIT A = E + L a) Bank Equipment, Profit on sale of + 3 000 asset -2 200 +800 0 b) Creditors Equipment -3 000 0-3 000 c) Debtors Equipment, Profit on sale of asset +3 000-2 200 +800 0 d) Debtors Equipment +3 000-3 000 0 1.2 Net Asset Value is: (2) a) Assets minus Liabilities b) Non Current Assets c) Equity d) Both a and c 1.3 The following information relates to AB Trading: Debtors R 2 000 Equipment R10 000 Bank Overdraft R 7 000 Inventory R 5 000 Vehicles R20 000 Creditors R 1 000 Long term Loan R25 000 1
The owner did not make any capital contributions or cash withdrawals for the year. Which of the following represents the NET PROFIT? (2) a) R12 000 b) R 4 000 c) R17 000 d) R 2 000 1.4 The following transactions were incurred by AC Traders, operating with a positive bank balance: (i) Cheque received in payment of services rendered on credit R5 000 (ii) Cheque issued for payment of Electricity bill R2 500 (iii)cheque issued to a creditor in payment of an outstanding account R3 000 (iv) Cheque for R6 000 issued for payment of non-current assets purchased for cash. Which one of the following alternatives represents the effect of the above transactions on the equity of the business? (2) a) +R2 500 b) R 2 500 c) R6 500 d) +R5 000 1.5 J Spears purchased a motor vehicle on 1/7/2012 for R50 000. The motor vehicle is depreciated at 15% per annum on the straight line method. Which alternative represents the depreciation at 31/12/2012? (2) a) R7 500 b) R3 333 c) R3 750 d) R3 125 1.6 List 3 requirements of the Founding Statement. (6) 1.7 Explain the difference between Authorised Share Capital and Issued Share Capital. (4) 1.8 Name the three activity-based sections found in the Cash Flow Statement. (3) 1.9 List an advantage of the Cash Flow Statement. (2) 2
QUESTION TWO [35] S Peterson opened a consulting agency on the 01 March 2012. The following transactions took place for the year ended 28 February 2013. Date Transactions Amount 2012/13 R Mar 02 S Peterson deposited capital into the business bank account 100 000 Mar 05 Paid rent by cheque 2 000 Mar 06 S Peterson transferred her personal vehicle into the business 35 000 as capital Apr 01 S Peterson purchased the following for cash: Photocopier 2 000 Furniture 7 000 Scanner 3 000 Apr 05 Rendered services for cash 20 000 May 01 Bought stationery on credit from XY Stationers 200 May 02 Paid telephone bill by cheque 500 May 05 Equipment purchased on credit from AB Dealers 50 000 Jun 06 Services were rendered to J Joy on credit 35 000 Aug 01 Equipment was sold for cash 18 000 The carrying value of the equipment on date of the sale 20 000 Sep 03 J Joy paid towards her account 10 000 Nov 30 Cheque issued to AB Dealers 15 000 Dec 01 S Peterson employed an assistant and paid wages by cheque 3 000 Jan 25 S Peterson drew money for personal use 2 000 Feb 28 Paid electricity bill by cheque 12 000 Required: 2.1 Post the above transactions/accounts to the General Ledger. (25) 2.2 Prepare the Trial Balance at 28 February 2013. (10) 3
QUESTION THREE [30] The following information was extracted from the books of HONEYBEE STORES, a partnership business with partners H. Honey and B. Bee, on 28 February 2013, the last day of the financial year. PRE ADJUSTED TRAIL BALANCE OF HONEY BEE STORES AT 28 FEBRAURY 2013. DR Capital: H Honey (01/03/2012) 90 000 Capital: B Bee (01/03/2012) 60 000 Current Account: H Honey (01/03/2012) 15 400 Current Account: B Bee (01/03/2012) 4 800 Drawings: H Honey 28 600 Drawings: B Bee 32 100 Loan: ABSA (18% p.a.) 25 000 Land and Buildings at cost 160 000 Equipment at cost 73 000 Vehicles at cost 85 000 Accumulated Depreciation-Equipment (01/03/2012) 21 900 Accumulated Depreciation-Vehicles (01/03/2012) 30 600 Inventory 56 240 Trade Debtors 43 975 Provision for bad debts 2 750 Trade Creditors 31 000 Bank 570 Petty cash 250 Cash Float 1 000 Sales 683 605 Sales Returns 18 230 Cost of Sales 276 420 Salaries 123 000 Rates 8 000 Municipal Services 1 570 R CR R 4
Advertising 12 700 Discount received 1 230 Bad debts 585 Packing material 4 130 Insurance 7 300 Rent Income 7 700 Bank charges 1 050 Interest on overdraft 2 670 Interest on loan 4 125 Stationery 3 120 Other expenses 21 890 Additional Information: 1) Goods to the value of R4 200 were delivered to the premises of a customer on 28 February 2013. The cost price of the goods was R2 900. No entry has been for this transaction. 2) The physical inventory taken on 28 February 2013 reflected the following items on hand: Trading inventory R52 670 Packing materials R 940 3) Provide for outstanding interest on loan. 4) Insurance included a premium of R3 600 for the period 1 November 2012 to 31 October 2013. 5) On 25 February 2013, H. Honey took stationery with a value of R90, for personal use. No entry had been made for this transaction. 6) The monthly rent for February 2013 had not yet been received. 7) The account of a debtor, D. Daniel, who owed R270, must be written off. 8) The provision for bad debts must be adjusted to 5% of debtors. 9) Provide for depreciation as follows: Equipment R10 950 Vehicles - R10 880 10) The partnership agreement stipulated the following: a. Each partner is entitled to a monthly salary of R2 500 5
b. The partners are to receive interest at the rate of 10% p.a. on the capital invested. NOTE: H. Honey had increased his capital by depositing an additional amount of R30 000 into the business bank account on 31 August 2012. c. The remaining profit/loss is to be shared in proportion of the capital balances of the partners at the end of the financial year. Required: Prepare the Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2013. (30) QUESTION FOUR [10] The following information represents the fixed asset register of AB Trading for the year ended 31 December 2012. All assets are depreciated using the straight line method. ITEM DATE PURCHASED DATE SOLD COST R DEPRECIATION Furniture 01 February 2011-10 000 10% Photocopier 01 January 2012-3 000 20% Scanner 01 January 2012-2 000 20% Required: Prepare the Property, Plant and Equipment Note to be presented on the Financial Statements for the year ended 31 December 2012. (10) END OF QUESTION PAPER 6