24 2024

MODULE NAME: MODULE CODE:

ACCOUNTING 1B ACBP5122/p/w

ASSESSMENT TYPE: EXAMINATION (PAPER ONLY)

TOTAL MARK ALLOCATION: 180 MARKS
TOTAL HOURS: 3 HOUR (+10 minutes reading time)
INSTRUCTIONS:
1. Please adhere to all instructions in the assessment booklet.
2. Independent work is required.
3. Ten minutes is dedicated to reading time before the start of the assessment. You may
make notes on your question paper, but not in your answer sheet. Calculators may not
be used during reading time.
4. You may not leave the assessment venue during reading time, or during the first hour or
during the last 15 minutes of the assessment.
5. Ensure that your name is on all pieces of paper or books that you will be submitting. Submit
all the pages of this assessment’s question paper as well as your answer script.
6. Answer all the questions on the answer sheets or in answer booklets provided. The phrase
‘END OF PAPER’ will appear after the final set question of this assessment.
7. Remember to work at a steady pace so that you are able to complete the assessment within
the allocated time. Use the mark allocation as a guideline as to how much time to spend on
each section.
Additional instructions:
1. This is a CLOSED BOOK assessment.
2. Calculators are allowed.
3. Ensure that you have received a special answer booklet (with forms drawn up) for entering
your answers. If you have not received an answer booklet, request one from the invigilator
before starting the assessment. Answer all questions in the answer booklet provided.
4. DO NOT WORK IN PENCIL – USE BLACK OR BLUE PEN ONLY.
5. SHOW ALL CALCULATIONS.
6. ROUND ALL CALCULATIONS TO THE NEAREST RAND, WHERE APPLICABLE.

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Question 1 (Marks: 15)

The following information was extracted from the records of Rosewood Close Corporation for bank
reconciliation purposes:
1 Bank statement balance on 30 June 2024: R56 800 (credit)

2 The balance in the bank general ledger account before any adjustments was R81 041 (debit)
at 30 June 2024.

3 The following item in the May 2024 bank reconciliation statement did not appear in the
June 2024 bank statement:
• Deposit: R Clarendon R1 500
This is related to a deposit made by R Clarendon into the incorrect bank account. The bank
has still not reversed this deposit.

4 EFT Payment (EFTCS#259) for R12 500 appeared in the cash book payments in June but did
not reflect on the June bank statement.

5 The following deposits on 28 June appeared in the cash book receipts but not in the
bank statement:
• DS241: R14 500
• DS242: R21 500

6 Deposit slip DS231 for R11 000, dated 8 June 2024 appeared on the bank statement as
R11 199. The bank statement was incorrect.

7 Items reflected on the June bank statement which did not appear in the June cash books:
• Bank charges, R300.
• A direct deposit of R2 000, made by debtor R. Singh.
• A debit order of R1 400 in favour of Telkom for the telephone account.
• Stop order: insurance: R2 750
• Interest on credit balances R250.
• Bank overdraft fee: R240

The accountant of Rosewood Close Corporation queried the overdraft fee as they do not
have an overdraft facility. The bank has agreed to reverse this in July.

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Required:
Q.1.1 Prepare the bank reconciliation statement for Rosewood Close Corporation as at (13)
30 June 2024.

Q.1.2 Give one example each from the above reconciling items of a(n) (2)
Q.1.2.1 Adjusting difference
Q.1.2.2 Timing difference

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Question 2 (Marks: 25)

Padel Action has received the June 2024 statement from a creditor, BT Rackets. The creditors clerk
of Padel Action has compared the statement received to BT Rackets' individual account in the
creditors ledger and found some differences.

Padel Action uses the perpetual inventory system and both businesses are registered VAT vendors.

Bill to: Date: 26/06/2024

Padel Action
Action Sports Club
Cape Town
7045
Date Details Debit (R) Credit (R) Balance (R)
2024 June 1 Opening Balance 35 800

2 Payment Thank you 34 010 1 790

Discount allowed 1 790 0
4 Invoice No 562 21 050 21 050
11 Credit note CN63 1 863 19 187
13 Invoice No 571 7 544 26 731
18 Payment Thank you 10 005 16 726
23 Invoice No 582 14 375 31 101
25 Credit note 69 221 30 880
26 Invoice No 588 16 800 47 680
Current Balance 47 680
Terms: 30 days
5% Settlement discount if payment is received within 25 days of invoice
date.

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Creditors Ledger of Padel Action

Account: BT Rackets

Date Document No Fol. Debit (R) Credit (R) Balance (R)

June
2024
01 Balance brought forward 35 800
01 EFTCS#591 CBP 34 010 1 790
05 Invoice INV562 CJ 21 505 23 295
11 Credit note CN63 CAJ 1 863 25 158
13 Invoice INV571 CJ 7 544 32 702
17 EFTCS#631 CBP 10 005 22 697
23 Invoice INV582 CJ 12 500 35 197
25 Credit note CN69 CAJ 212 34 985
28 EFTCS#644 CBP 10 925 24 060
28 Journal Voucher JV16 GJ 575 23 485

Additional information:
1. Padel Action forgot to record in the Creditors Ledger the 5% discount allowed by BT Rackets
when making their payment on 01 June 2024.
2. BT Rackets captured invoice No. 562 at the incorrect amount.
3. The creditors clerk made an error in posting Credit note CN63 from the Creditors Allowance
Journal.
4. Padel Action entered invoice No. 582 at the VAT exclusive amount in the Creditors Journal and
posted it as such. The entry to the Trading inventory account had been posted correctly.
5. Padel Action captured credit note CN69 at the correct amount.
6. The payment on the 17 June of R10 005 is in part payment of invoice IN562.
7. Invoice No. 588 is not for the account of Padel Action. BT Rackets should have recorded this in
the account of Action SA Padel, another customer of theirs.
8. On 28 June 2024 Padel Action decided to settle the balance outstanding on invoice IN562
early and claimed the 5% settlement discount offered by BT Rackets (refer to No. 6 above).

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Required:
Complete the following in the books of Padel Action on 1 July 2024:

Q.2.1 Prepare the general journal entries required for the adjustments reflected in the (10)
additional information points 1 and 4.
Narrations are not required.

Q.2.2 Prepare BT Rackets’ individual account in the Creditors ledger of Padel Action as at (7)
01 July 2024, showing all adjustments.

Q.2.3 Prepare the Creditors reconciliation statement (remittance advice) for BT Rackets as (8)
at 1 July 2024.
Note: Show all your workings and round all answers to the nearest rand.

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Question 3 (Marks: 25)

Eagle Couriers started business on 1 March 2021. Five identical delivery vans to make deliveries
were purchased on 1 March 2021 at a total cost of R660 000. Land and buildings to the value of
R1 200 000 was also purchased at the time. The following balances were extracted from the general
ledger for the year ended 28 February 2023.
R
Land and Buildings R1 200 000
Vehicles R660 000
Accumulated depreciation: Vehicles R288 750

All vehicles are depreciated at 25% p.a on the diminishing balance method. Land and Buildings are
not depreciated.
Eagle Couriers is not VAT registered.

During the financial year ended 29 February 2024, Eagle Couriers undertook the following
transactions:
31/07/2023 Purchased three delivery scooters at a cost of R18 000 each on credit from Big Bikes.

31/10/2023 Sold one of the delivery vans purchased on 1/03/2021 for R60 000 on credit.

Required:
Q.3.1 Record all the entries relating to the disposal of the delivery van in the general (19)
journal. Narrations are not required. Show all your workings as marks will be
allocated.

Q.3.2 Calculate the total depreciation expense for the year ended 29 February 2024. (6)
Show all your workings.

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Question 4 (Marks: 45)

The following information was taken from the books of Stonewall Traders, a sole trader owned and
run by David Stone, at the end of the financial year:

Pre-adjustment trial balance of Stonewall Traders as at 30 June 2024

R R
Statement of financial position section
Capital 486 760
Drawings 36 100
Land and Buildings 900 000
Equipment 450 000
Accumulated depreciation: equipment 175 000
Inventory 154 000
Deposit received from tenant 12 300
Debtors Control 53 500
Creditors Control 86 500
Loan: SA Finance 366 000
Bank 50 000
Nominal accounts section
Sales 5 680 200
Sales returns 25 800
Cost of Sales 4 545 160
Advertising 65 000
Credit Losses 5 400
Electricity and water 43 200
Insurance 40 500
Printing and stationery 23 630
Rent Income 64 000
Salaries and Wages 547 470
Telephone 31 000
6 920 760 6 920 760

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Additional information and adjustments still to be processed:

1. The bank reconciliation process at year-end revealed that:
• A deposit slip relating to cash sales had been totalled incorrectly by the accountant as
R14 500 instead of R24 500 and captured as such in the cash book receipts. The
incorrect amount was also captured in the sales column of the cash book receipts. You
may ignore any VAT implications.
• JDT Builders, a debtor previously written off as a bad debt, paid R600 by direct deposit
on 30 June 2024. This deposit does not appear in the cash book receipts but reflects on
the bank statement.
2. According to a physical stock-take, the following was on hand on 30 June 2024:
• Trading Inventory R149 000.
• Stationery R3 400.
3. Depreciation of 25% p.a on cost for Equipment must still be taken into account. There have
been no additions or disposals of equipment during the year.
4. The July 2024 insurance premium of R3 300 was paid and accounted for on 29 June 2024.
5. Stonewall Traders has rented out a section of their warehouse to a tenant from the
01 March 2024. The monthly rental is R12 800 and is payable monthly in advance.
The tenant had paid a deposit of R12 300 which is reflected as a current liability in the trial
balance above.
6. Interest on the loan is calculated at 11% per annum. The loan was negotiated and received on
1 June 2024. No capital and interest payments have been made to date. Monthly repayments
of R7 500 are due from 1 July 2024 (the following financial year). (Use 366 days for interest
calculations.)
7. An allowance for credit losses for R3 100 must be created.
8. An amount of R2 500 for an advertisement that was published on 20 June 2024 has not been
accounted for yet.

Required:
Q.4.1 Prepare the Statement of profit or loss and other comprehensive income of (28)
Stonewall Traders for the year ended 30 June 2024.

Q.4.2 Prepare ONLY the Equity and Liabilities section of the Statement of Financial (12)
Position as at 30 June 2024.

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Q.4.3 Prepare the note for Trade and other payables as it would appear in the Financial (5)
Statements for the year ended 30 June 2024.

Question 5 (Marks: 20)

T. Reusch and B. Meyers are in partnership in a cleaning supplies business. The following information
is available from the partnership's accounting records as at 30 June 2024, the financial year-end.

DR Current account: T Reusch CR

Date Details Fol Amount Date Details Fol Amount
2024 Interest on drawings GJ 565 2023 Balance b/d 50 600
June July 1
30
Drawings: T Reusch GJ 15 400 2024 Interest on capital GJ 42 000
June
30
Appropriation GJ 11 360 Interest on current GJ 4 048
account
Balance c/d 387 323 Salary: T Reusch GJ 318 000
414 648 414 648
2024 Balance b/d 387 323
July 1

DR Current account: B Meyers CR

Date Details Fol Amount Date Details Fol Amount
2023 Balance b/d 12 000 2024 Interest on capital GJ 32 500
July 1 June
30
2024 Interest on GJ 469 Salary: B Meyers GJ 300 000
June drawings
30
Interest on current GJ A
account
Drawings: B Meyers GJ 12 800
Appropriation GJ 17 040
Balance c/d B
332 500 332 500
2024
July Balance b/d B
1

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Additional information:
1. Interest on capital is calculated as 10% p.a. on a pro-rata basis. There have been no changes to
the capital balances during the year. The capital balances for the partners at 1 July 2023 were:
T Reusch: R420 000 and B Meyers: R325 000.
2. Interest on current accounts is calculated at 8% p.a. on credit opening balances and 9% p.a. on
debit opening balances.
3. Interest on drawings is calculated at 11% p.a., as if the drawings were made four months
before the year end.

The balance on the General reserve account was R250 000 as at 1 July 2023. At year end the
partners decided to transfer an additional R50 000 to the reserve.

Required:
Answer the following questions based on the information provided above.
Q.5.1 Did the partnership make a profit or loss after appropriations during the current (1)
year?

Q.5.2 Briefly give a reason for your answer in Q.5.1 above. (2)

Q.5.3 Calculate the ratio the partners used to determine the allocation of the profit/loss (5)
after appropriations at the end of the financial year. Your answer must make it clear
as to which partner the ratio applies.

Q.5.4 In terms of the partnership agreement, the partners are being charged a higher (3)
interest rate on debit current account balances than on credit current account
balances. Briefly explain why the partners would have decided to charge a higher
interest rate on debit balances.

Q.5.5 Calculate the interest on the current account for B. Meyers (A). Show all your (2)
workings.

Q.5.6 Calculate the balance of the current account for B. Meyers (B) if the balance before (2)
taking into account the interest calculated in Q.5.5 was R290 191.

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Q.5.7 Using the information in the question above, calculate the total partnership equity (4)
balance in the Statement of Financial position for the year ended 30 June 2024.

Q.5.8 What happens to the partnership upon the death of one of the partners? (1)

Question 6 (Marks: 25)

Greytown CC is a close corporation with two members, F. Zomu (40% members’ interest) and
R. Radebe (60% members’ interest). The following information has been extracted from the books of
Greytown CC for the financial year ended 30 September 2024:

R
Loan from F. Zomu 52 000
Loan to R. Radebe 46 800
Members’ contributions 80 500
Retained income (1/10/2023) 456 900
Net profit after taxation (after all adjustments) 478 880
Distribution to members 65 800

Additional information:

1. Interest on loans from members is 10% per annum on a pro-rata basis.

2 Interest on loans to members is 9 % per annum on a pro-rata basis.
3 R. Radebe received an additional loan of R10 000 on 1 July 2024.
4 For the current financial year, the members received monthly salaries of:
• F. Zomu: R26 000
• R. Radebe: R24 000
5 The close corporation rented additional storage from R. Radebe for R5 000 per month from
1 March 2024.
Required:
Q.6.1 Prepare the Loan to Members note to the annual financial statements for the year (4)
ended 30 September 2024 (the total column is not required).

Q.6.2 Prepare the Transactions with Member’s note to the Annual Financial Statements for (12)
the year ended 30 September 2024 (the total column is not required).

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Q.6.3 Calculate the retained income balance at 30 September 2024. (3)

Q.6.4 If a new member, S. Naidoo, purchases a 20% interest in the close corporation on (6)
01 November 2024, what would the new members’ percentage interests be for each
of the three members?

Question 7 (Marks:25)
Rawlins Traders buys and sells a variety of products. At the end of the year, the business burnt down
and most of the accounting records were lost in the fire. The bookkeeper was able to determine the
information below from reports stored offsite and now needs assistance in preparing the year-end
financial accounts for Rawlins Traders for the year ended 30 September 2024.
Rawlins Traders is not a registered VAT vendor.
Balances as at 1 October 2023 Balances as at 30 September 2024
(R) (R)
Inventory 28 700 31 400
Debtors 80 400 95 460
Creditors 74 900 68 680
Bank 125 000 95 600

The following transactions relating to debtors and creditors took place during the year:
(R)
Purchase of merchandise on credit 845 000
Purchase of a vehicle on credit 250 600
Cash refunds given to cash sale customers 6 400
Returns by credit sale customers 14 500
Returns of merchandise to creditors 8 620
Cash receipts from customers:
• Cash sales of merchandise 129 600
• Payment of accounts by debtors 768 900
Settlement discount granted to Debtors 7 600
Debtors declared insolvent and written off 4 300
Settlement discount received from creditors 5 460

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Required:
Q.7.1 Prepare the Creditors control account in the general ledger and calculate the (8½)
amount paid to creditors during the year ending 30 September 2024.

Q.7.2 Prepare the Debtors control account in the general ledger and calculate the credit (8½)
sales for the year ending 30 September 2024.

Q.7.3 Calculate the gross profit for Rawlins Traders for the year ended 30 September 2024. (8)

Note: Show all your workings.

END OF PAPER

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