FAC1502 May/Jun 2015 exam paper — questions

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  1. Question 1.1 · Adjustments & year-end entries · 3.5 marks

    Lady Gizela Clothing Manufacturers' statement of financial position at 28 February 2014 showed: long-term loan R62 000; current portion of long-term loan R5 000; accrued expenses (interest on long-term loan) R6 281,25; prepaid expenses (insurance) R500; inventory R25 000; fixed deposit R21 000 with accrued interest R250. For the year to 28 February 2015: R5 000 of the loan is repayable every 1 June until settled; the loan was taken on 1 June 2013 with interest at 12,5% p.a. payable annually in arrears on 1 June; inventory on hand at 28 February 2015 is R20 500 (periodic system); insurance is paid annually in advance on 30 June for the year 1 July to 30 June, and the premium paid on 30 June 2014 was R4 500. Prepare the long-term loan account, properly closed off, for the year ended 28 February 2015, showing calculations.Show the full question

  2. Question 1.2 · Adjustments & year-end entries · 4 marks

    Using the Lady Gizela information, prepare the accrued expenses account, properly closed off, for the year ended 28 February 2015, showing calculations.Show the full question

  3. Question 1.3 · Adjustments & year-end entries · 4 marks

    Using the Lady Gizela information, prepare the prepaid expenses account, properly closed off, for the year ended 28 February 2015, showing calculations.Show the full question

  4. Question 1.4 · Adjustments & year-end entries · 3 marks

    Using the Lady Gizela information, prepare the inventory account, properly closed off, for the year ended 28 February 2015.Show the full question

  5. Question 1.5 · Adjustments & year-end entries · 5.5 marks

    Using the Lady Gizela information, prepare the interest on long-term loan account, properly closed off, for the year ended 28 February 2015, showing calculations.Show the full question

  6. Question 1.6 · Adjustments & year-end entries · 5 marks

    Using the Lady Gizela information, prepare the insurance account, properly closed off, for the year ended 28 February 2015, showing calculations.Show the full question

  7. Question 2.1 · Property, plant & equipment and depreciation · 17 marks

    Tiger Stores, extract from the pre-adjustment trial balance at 31 March 2015: land and buildings at cost R750 000; vehicles (1 April 2014) R275 000; equipment (31 March 2015) R600 000; accumulated depreciation at 1 April 2014 — vehicles R110 000, equipment R40 000; fixed deposit R60 000; trading inventory (1 April 2014) R25 300; debtors control R42 500; bank R72 600. Two vehicles were owned at 31 March 2015: the original bought 1 April 2012 and a second bought 31 August 2014 for R125 000; vehicles are depreciated at 20% p.a. straight-line and the year's charge is R69 583. Equipment is depreciated at 10% p.a. diminishing balance; all of it was bought on 30 September 2013; equipment costing R200 000 was sold for R170 000 on 30 September 2014. Closing inventory is R26 000. Interest at 10% p.a. on the fixed deposit (invested 1 April 2014) must still be provided. Credit losses for the year are R600. Prepare the property, plant and equipment note for the year ended 31 March 2015 (total column may be omitted), rounding to the nearest rand.Show the full question

  8. Question 2.2 · Property, plant & equipment and depreciation · 7 marks

    Using the Tiger Stores information, prepare the asset section of the statement of financial position as at 31 March 2015, in line with IFRS.Show the full question

  9. Question 3.1 · Bank reconciliation · 12 marks

    Basson Traders' bank reconciliation at 31 March 2015: credit balance per bank statement R2 732; outstanding deposit R6 480; cheques not yet presented — 090 (17 Oct 2014, donation) R1 200, 168 (28 Mar 2015, P Mboko) R860, 170 (29 Mar 2015) R4 502; debit balance per bank account R2 650. April 2015: cash receipts journal bank column R30 090; cash payments journal R20 054; the bank statement shows a favourable balance of R12 900 at 30 April. Only on the April statement: cheque book R96; cash handling fees R30; interest on the favourable balance R50; a R2 000 stop order for the MY Bank mortgage; a R1 700 stop order to US Bank for a vehicle instalment. The March outstanding deposit was credited on 1 April. Cheques not on the statement: 211 (20 Apr, Swift Suppliers) R3 532, 216 (28 Apr, water and electricity) R3 668, 221 (30 Apr, Red Cross) R1 200. Cheque 090 to the Red Cross was cancelled on 30 April and replaced by cheque 221 — the cancellation is not yet recorded. Of the March outstanding cheques only 170 was presented. Cheque 195 to creditor Handy Wholesalers was correctly issued for R1 578 but recorded on the counterfoil and in the cash payments journal as R1 758. An R/D cheque of R500 from S Steward, received in settlement of his R530 account, appears only on the statement. A R4 500 deposit from Y York, whose account was previously written off, appears on the statement. A post-dated (24 May) cheque for R780 from debtor Escourt Traders, recorded in April, was returned by the bank marked post-dated. A R9 870 deposit made on 30 April has not yet been credited. Complete only the bank columns of the cash receipts and cash payments journals at 30 April 2015.Show the full question

  10. Question 3.2 · Bank reconciliation · 6 marks

    Using the Basson Traders information, prepare the properly balanced bank account in the general ledger at 30 April 2015.Show the full question

  11. Question 3.3 · Bank reconciliation · 7 marks

    Using the Basson Traders information, prepare the bank reconciliation statement as at 30 April 2015.Show the full question

  12. Question 4.1 · Non-profit entities: membership fees and income & expenditure · 6 marks

    Green Golf Club's balances at 31 December 2014 include: dining room purchases R14 500, dining room wages R10 000, dining room sales R30 000, dining room inventory (31 December 2013) R1 000. The dining room inventory was not counted at 31 December 2014, but the usual gross margin of 50% on turnover was achieved. Prepare the dining room trading statement for the year ended 31 December 2014.Show the full question

  13. Question 4.2 · Non-profit entities: membership fees and income & expenditure · 20 marks

    Green Golf Club, balances at 31 December 2014: green and caddy fees received R16 000; crockery and linen at cost (31 Dec 2013) R7 000; telephone expenses R6 600; implements and tools at cost R21 000 with accumulated depreciation R11 000; maintenance R10 900; entrance fees received R10 500; bar gross profit R49 500; bar wages R12 000; membership fees R84 000; furniture at cost R25 000 with accumulated depreciation R6 000; accumulated fund R150 000; interest on the mortgage paid to 30 June 2014 R37 500; salaries and wages R35 000; stationery R2 000; mortgage R500 000; insurance prepaid at 31 Dec 2013 R400; dining room profit per 4.1. Adjustments: crockery and linen valued at R5 000 at year end; implements and tools depreciated at 20% diminishing balance; furniture depreciated by R1 000; insurance premiums of R1 600 paid in the year were debited to telephone expenses, and half is prepaid; the R84 000 membership fees is R1 800 prepaid at 31 Dec 2013 plus R82 200 cash received, still to be adjusted for R1 000 in arrears and R2 100 prepaid at 31 Dec 2014; a members' register printed at a quoted R100 is unrecorded; the secretary's January 2015 salary of R1 200 was paid in advance and sits in the R35 000; a R500 donation deposited on 29 December is unrecorded; the mortgage bears interest at 15% p.a.; entrance fees are not capitalised. Prepare the income and expenditure statement for the year ended 31 December 2014.Show the full question

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