Example: from my lms

The following transactions refer to Easy Clean for February 2018:

1 P Palmer decided to start a maintenance firm called Easy Clean. He withdrew

R130 000 from his personal savings account and deposited it in Easy Clean’s
bank account.
2 Easy Clean obtained a loan of R25 000 (with a payback period of more than a
year) from a financial institution, ABC Bank. The amount was paid into its bank
account.
13 Easy Clean provided services to a client, S Silver, and received R1 000, via
EFT.
28 C Canon settled his account in part, R2 000.

CASH RECEIPTS JOURNAL OF EASY CLEAN for February 2018

Sundries
Doc Day Details Bank Sales (exclusive) VAT control Receivables Discount Amount Details
no: (inclusive) allowed.
(Debtor)
(exclusive)
1 P Palmer 130 000 R130 000 Capital
2 ABC Bank 25 000 R25 000 Loan
13 S Silver 1 000 1 000
28 C Canon 2 000 R2 000
158 000 1 000 157 000

CASH PAYMENT JOURNAL

The following transactions refer to Easy Clean for February 2018:

6 Easy Clean bought equipment from XY Furnishers for R100 000 and paid via EFT.
11 Easy Clean paid Jock Limited’s account of R2 000 cash
12 The owner, P Palmer, withdrew R1 000 cash for his own use.
16 Easy Clean paid wages via EFT, R800.

CASH PAYMENT JOURNAL FOR EASY CLEAN FOR FEBRUARY 2018

Sundries account
Doc Day Details Bank Payments Purchases VAT Payable Discounts Amount Details
no. control Received s
6 XY 100 000 100 000
Furniture
11 Jock 2000 2000
Limited
12 P 1 000 1000 Withdrawal
Palmer
16 Easy 800 R800 Wages
Clean
103800 2000 100000 1800
 Bank
Date Folio no. Details Amount Date Folio no. Details Amount
16 Feb Total R103 800
receipts
Study the scenario and answer the questions that follow:

DIY Hardware

Donald owns a hardware store and is a registered VAT vendor. The following transactions relate to August 2023
and are inclusive of VAT wherever *applicable. The Periodic Inventory system is in use.

1 The owner brought in a vehicle costing R60 000 for business operations.

2 Sold merchandise for cash and received R120 000

5 Bought stock for resale costing R140 000 and paid via EFT.

5 Bought fuel for R1 000 to transport the merchandise purchased to the store.

8 Debra, a customer who owed R60 000 to the business was declared insolvent. The entity received 80 cents in

the Rand.

12 Issued a receipt for R45 000 to Ronald for merchandise sold.

13 Paid R800 to the Municipality for the water and electricity account of Donald and R1 200 for the account of the
business.

16 Settled R90 000 that was owed to a creditor J Martins, for stock.

25 Paid salaries of the shop assistants R30 000 in total.

31 Received R80 000 from a fixed deposit at ACSA Bank that had matured.

Required

Record the above transactions of DIY Hardware for August 2023 in their respective Books of Prime Entry. Note:
Round off all amounts to the nearest Rand.

2.1 Cash Receipts Journal

2.2 Cash Payments Journal

2.3 General Journal

2.1. CASH RECEIPTS JOURNAL

Cash Receipts journal for DIY Hardware for August 2023

SUNDRIES
ACCOUNTS

Doc Day Details Bank Sales Vat Receivables Discounts Amounts Details
no. control received

2 merchandise 120 120000

000

12 Ronalds 45 000 45 000 reciept

receipts
 31 ACSA Bank 80 000 80000

245000 120 000 80000

2.2. CASH PAYEMENTS JOURNAL

Cash Payments Journals for DIY Hardware for August 2023

SUNDRIES
ACCOUNTS

Doc Day Details Bank Sales Vat Receivables Discount Amounts Details
no. control s
received

5 resale 140 00 140 000 stock

0

5 Transport 1 000 1000 fuel

13 Donald 2 000 800 Water

and
electricity

16 Cash 90 000 90 000 creditor

25 Shop 30 000 30000 Wages

assistants

263000 263000

2.3. GENERAL LEGDER

BANK

Date Details Folio no. Amount Date Details Folio no. amount

1 Vehicles GJ 60 000

5 Fuel for GJ R1 000

transport

8 Debra GJ 60 000

25 Total of CPJ 263000

Receipts
 31 Total GJ 245 000
receipts
Practice

The following information relates to Vaal Dealers, a registered VAT vendor, who uses
the periodic inventory system:

An extract from the list of balances in the general ledger at 28 February 2018 shows the
following:

Dr Cr
R R
Capital 257 400
Land and buildings at cost 145 200
Equipment at cost 29 700
Bank 4 467
W Wolf 583
L Lion 770
T Tiger 2 310
VAT control 210

Transactions for March 2018:

1 Cash sales, R14 949.

5 Paid the account of T Tiger via EFT after deducting R110 discount.
6 Received cash from W Wolf for R561 in full settlement of his account.

Received an EFT payment from L Lion for R737 and allowed R33 discount.
12 Received an account from Stationers Ltd for the printing of documents R759.

Credit sales:

L Lion R2 178

W Wolf R1 584
14 Sold an old typewriter to O Old for R297 and received an EFT payment for the
amount due.

Cash sales, R6 600.

15 Received a credit invoice from T Tiger for goods purchased, R14 025.
21 Issued a credit note to L Lion for an overcharge on the invoice of the 12th,
R55.
23 Paid cash for carriage on goods purchased, R1 133.
29 Paid via EFT salaries and wages, R5 746, and for purchases, R7 700.

Required
 Prepare the following subsidiary journals of Vaal Dealers, properly totalled for March
2018:

1.1Cash receipts journal (analysis columns for sundries, sales, Accounts receivable,
VAT control, settlement discount allowed and Bank)

1.2.Cash payments journal (analysis columns for sundries, purchases, Accounts

payable, VAT control, settlement discount received and bank.

1.3. Post the cash journals to the following accounts in the general ledger of Vaal
Dealers:

a. Bank

b. T Tiger

c. Discount Allowed

Close off the accounts at the end of the month

CASH RECIEPTS JOURNAL OFVAAL DEALERS FOR MARCH 2018 SUNDRY ACCONT

Doc day Details Bank Sales Vat control Receivables Discounts Amount details
no. received

1 Cash 14 949 12999 1950

6 W Wolf 561 2.87 583 19.13

L Lion 737 4,30 770 28.70

14 O OLD 297 39 258 equipment

Cash 6600 5739 861

23144 18738 2857,17 1353 47,83 258

1.1.

1.2.

CASH PAYEMENTS JOURNAL OF VAAL DEALERS FOR MARCH 2018 SUNDRY ACCONT

Doc day Details Bank Purchases Vat Payable Discounts Amount details
no. control received

5 T Tiger 2200 14,34 2310 95,65

23 Cash 1 133 147,78 985,21 Carriage
on goods
purchased
29 Bank 5746 5746 wages
Purchases 7700 6695,65 1004,35
16779 6695,65 1166,47 2310 95,65 6731,21
1.3.

T Tiger
Date Folio no. Details Amount Date Folio no. Detail Amount
1 March b/d Balance 4467
14 CRJ Total of 23 144
receipts
29 CPJ Total 16 779
payments
31 c/d balance 10832
27611 27611
1 apr b/d balance 10832
a.
Study the scenario and complete the questions that follow:

Mokala Traders

The following information appeared in the accounting records of Mokala Traders for the financial year
ended 30 September 2023.

Balances/Totals as at 30 September 2023

Rand

Purchases 795 150

Purchases returns 15 900

Settlement discount received 11 100

Water and electricity 34 800

Salaries and wages

135. 450

Sales 1 350 600

Sales returns 13 050

Telephone expenses 23 850

Stationery 10 200

Settlement discount granted 13 800

Fixed deposit

105 000
Furniture at cost 75.000

Plant and equipment at cost 1 125 000

Accumulated depreciation: Furniture 22 500

Accumulated depreciation: Plant and equipment 225.000

Repairs and maintenance

2 850

Insurance 19 800

Credit losses 17 250

Accounts receivable 435 150

Allowance for credit losses 19 200

Drawings
37 500

Inventory (1 October 2022) 217 950

Interest received on fixed deposit 60000

Capital (1 October 2022) 525 000

Bank overdraft 158 550

Mortgage loan 720 000

Additional information

1. The physical inventory count at 30 September 2023 indicated that inventory amounted to R128.100 and
stationery R3 750.

2. A debtor that owes R1 800 must be written off as irrecoverable

3. Depreciation on plant and equipment is at 10% per annum on cost. An old plant initially acquired for R100 000
was sold on 30 September2023. The carrying amount of the disposed plant on date of disposal was R60 000.
Mokala received R80 000 on the sale.

4. Furniture is depreciated at 15% diminishing balance method.

5. It was determined that the allowance for credit losses account should amount to R21 450 at 30 September
2023.

6. Wages amounting to R3 000 must still be paid

7. The fixed deposit was made on 1 October 2022 at Investment Bank at an interest rate of 8% per annum.

8. The mortgage agreement was entered into on 1 August 2023 and bears interest at a rate of 10% per annum.
The interest for the current financial year must still be accounted for.

Required

3.1 Prepare the Statement of Profit and Loss and other Comprehensive Income of Mokala Traders for the year
ended 30 September 2023.

3.2 Prepare the "Asset - section" of the Statement of Financial Position for Mokala Traders as at 30 September
2023.

3.1. calculations

1.Inventory:128100+3750=R131 850

2.1Depreciation:1125 000x10%=112 500

100 000-60 000=40 000

80 000-40 00=40 000

2.2Furniture: 75000-22 500=52500

52500x15%=7375

3. Creditors loss: 17 250+1 800=19050

19 200-21450=2 250

4. interest:60000x8%x1=4 800
5.morgage: 720 000x10%x5/12=30000

STATEMENT OF PROFIT/LOSS FOR MOKALA TRADERS FOR THE YEAR ENDING 30 SEPTEMBER 2023

Revenue (1350600-13050) 1337550

Cost of sales (869 100)

(217 950+ {795 150-15900}-128100)

Opening inventory 217 950

Purchases 795 150

Purchase returns 15 900

Closing inventory (131 850)

Gross profit (1 337 550-869100) 457 350

Expenses 324 375

-Water and electricity 34 800

-Wages (135 450-3000) 132450

-Telephone 23 850

-Stationery (10 200+3750) 13 950

-depreciation (112 500-40 000) 72 500

-Furniture 7375

-Credit loss(19050-2250) 16 800

Repairs and maintenance 2850

insurance 19 800

Net profit before interest 132 975

Interest received(mortgage:720 000x10%x11/12) (66000)

Net profit for the year 66975

3.2

STATEMENT OF FINANCIAL POSITION OF Mokala as on 30 September 2023

ASSETS
Non-current assets 1181250
Property, plant and equipment (1 125 00x(12/12-10%)) 1 012 500
Furniture (75 000x(1-15%)) 63750
Fixed deposit 105000
Current assets 547800
Inventory 128 100
Stationary 3750
Trade-and other receivables 415 950

(435150-19200 )
TOTAL ASSETS 1729050

(non-current assets + current assets)

EQUITY AND LIABILTITIES
Equity 525 000
Capital (as per statement of changes in equity closing 525 000
balance)
Liabilities
Non-current liabilities 188550
Mortgage bond 30000
Bank over \draft 158 550
TOTAL EQUITY AND LIABILITIES 713550

(525 000 +188550)

Gauteng Traders

You are provided with the following information for Gauteng Traders for the month ended 31
October 2023.

Bank Reconciliation Statement as at 30 September 2023:

Debit Credit
Rand Rand

Debit balance as per bank 8 000

statement

Credit outstanding deposit 3 000

Debit outstanding payments: 500

650

652 1 500

Credit balance as per bank 7.000

account

10 000 10 000

2. The total of the Cash Payments Journal was R11 500 and the total for the Cash Receipts Journal
was R19 500 on 31 October 2023

before the Bank Statement for October 2023 was received.

3. The bank statement has a favourable balance of R8 300 on 31 October 2023.

4. The following differences were identified after a comparison of the Bank Statement for October
2023 with the Bank Reconciliation Statement as at 30 September 2023 and cash journals for October
2023 was made:

 EFT payment no. 650 for R500 appeared in the Bank Statement only.
 A deposit for R3 000 on 1 October 2023 appeared in the Bank Statement only.
 Bank charges for October 2023 amounted to R600.
 A debtor deposited R5 300 directly into the entity's bank account.
 An EFT payment for R900 which was previously received from a debtor was dishonoured due
to insufficient funds in his bank account and therefore returned by the bank.
 The following items appeared in the cash journals only:
o R700
o Eft no 730
 736-- R6 000
o A deposit on 31 October 2023 for 4500
4.1. Prepare the Cash Receipts Journal and the Cash Payments Journal (details and bank column only)
for October 2023.

4.2 Prepare the properly balanced/closed off bank account for October 2023 in the General Ledger of
Gauteng Traders.

4.3 Prepare the Bank Reconciliation Statement of Gauteng Traders as at 31 October 2023.

4.1.CASH RECIEPT JOURNAL FOR GAUTENG TRADER FOR 31 OCTOBER 2023

CRJ Sundry account

Doc no. Day Details Bank Sales Vat Receivable Discounts Amount Detials
control s recieved

CASH PAYEMENT JOURNAL FOR TH GAUTENG TRADER FOR 31 OCTOBER 2023

CPJ Sundry account

Doc Day Details Bank Sales Vat Receivable Discounts Amount Detials
no. control s recieved
TRIAL BALANCE OFM ICKEY Traders ON 31 March 2020
FOL DEBIT CREDIT

Statement of financial position

section

Capital 240 000

Drawings 10 000

Vehicles 350 000

Receivables 33 000

Payables 38000

Loans 100 000

Nominal account section

Rent paid 18 000

Salaries 15 000

Sales 200 000

Cost of sales 140 000

Advertisments 12000

578 000 578 000

Practice

TRAIL BALANCE OF SUNNY TRADERS ON 30 SEPTEMBER 2023

FOL DEBIT CREDIT

STATEMENT OF FINIANCIAL
POSITION SECTION

Capital 150 500

Drawing 10200

ACCOUNTS RECIEVABLES 2 200

Payables 2 200

Purchases 130 000

Vehicles 120 000

Nominal account section

Rent income 5 500

Commission received 10 200

Depriacation 1 200

Salaries 5 500

139 100 298400

The following pre-adjustment trial balance pertains to Babaloo Dealers for the year ended 30 June 2019.

Pre-adjustment trial balance of Babaloo Dealers for the year-ended 30 June 2019

Debit Credit

R R
Capital 198 300
Drawings 10 000
Buildings – Cost 345 000
Buildings – Accumulated Depreciation 51 750
Inventory 11 000
Bank 10 500
Petty Cash 500
Accounts receivable control 75 500
Allowance for credit losses 2 580
Accounts payable control 107 500
Loan: C Bank (10%) 10 000
Sales 568 750
Purchases 380 450
Commission income 2 800
Rent income 16 500
Salaries and wages 108 000
Insurance 13 000
Credit losses 1 540
Carriage on purchases 1 200
Interest on loan 200
Sales returns 1 290
958 180 958 180

Additional information:

Included in insurance is an amount of R 1 500 for July 2019.

A debtor, S Ngoni, was declared insolvent. The business received R 1 245 (60c in the rand). The outstanding
amount must still be written off as irrecoverable.(1245x40/60=830 )

Adjust the allowance for credit losses to 2% of the outstanding receivables. (75 500-830)x2%)=1493)[2580-
1493=1086]

Depreciation on buildings is written off at 10% per year according to the diminishing balance method. Take into
account that an additional office was purchased adjacent to the existing offices for R 45 000 on the 31st of
October 2018. This entry has been recorded.(345000-45000=300000-51750=248250x10%=24825)
(New:45000x10%x8/12=3000)

Rent has been received until the end of May 2019.

Wages of the last week, R 2 000, have still not been paid.

Provide for the interest on loan.

After a physical stock count, at the end of the year. the stock had a value of R 20 200

required:
Prepare the statement of profit or loss and other comprehensive income of Babaloo Dealers
for the year ended 30 June 2019.

STATEMENT OF PROFIT/LOSS OF BABALOO DEALERS FOR THE YEAR ENEDING 30 JUNE 2019

Debit CREDIT

REVENUE(568750-1290) 567460

COST OF SALES 388750

OPENING INVENTORY 11 000

PURCHASES 380 450

CLOSING INVENTORY 1 500

GROSS PROFIT 178 710

INCOME 19300

Rent income(1500+16500) 18000

Commission income 2800

EXPENSES 150609

Salaries and wages(108 000+2000) 110 000

Insurance (13000-1500) 11500

Credit loss(1540+830-1086) 1284

Depreciation(24825-+3000) 27825

NET PROFIT BEFOR INTEREST

INTEREST RECEIVED

NET PROFIT FOR THE YEAR

Receivables Control Account

After an entity's records were provisionally closed, it was established that the total of the list of receivables
amounted to R20 173, and the list of payables to R10 053. The receivables control account had a debit balance
of R20 073, while the payables control account had a debit balance of R100 and a credit balance of R11 813.

You are the accountant and discovered the following:

1.The Purchases Journal was incorrectly increased by R20.

2. The debit side of the receivables control account has been under-cast by R1 000.

3. A sales invoice for R440 was recognised in the receivables account, but not in the Sales Journal.

4. Credit sales of R240 were posted to the receivables account as R120.

5. A cheque for, R170 received from a receivable and endorsed to a payable, was posted to their respective
accounts only

6. A receivable's account of R900 was written off as uncollectable. This amount was recorded in the receivables
account, but no entry was made in the control account.

7. A credit note, for R130, issued to a receivable, was recognised as an invoice in his account, but was
recognised correctly in the subsidiary journal.

8. Discount received of R730, and discount allowed of R260, were recognised in the receivables and payables
individual accounts, but not in the control accounts.

9. Interest charged, R50, on an outstanding receivables account has been completely omitted.

10. A balance of a receivable, R150, was not included in the list.

11. The accounts receivable column in the Cash Receipts Journal was undercast by R600.

12. A credit balance of R300 in the Accounts Receivable Ledger had been listed as a debit balance on the list.

Source: Klopper, J. (2020).

Required

5.1 Prepare a revised receivables control account to adjust the balance. (9 Marks

5.2. Reconcile the total of the receivables list with the balances of the control account.

5.1

Receivables control account

Date Details Folio no Amount Date Details Folio no. Amount