FAC1503-2016-10-E-1.pdf - UNIVERSITY EXAMINATIONS U N I...

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Unformatted text preview: UNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS U N I SA :mwm FAC1 503 OctoberlNovember 2016 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS Durahon 2 Hours 100 Marks EXAMINATION PANEL AS APPOINTED BY THE DEPARTMENT Use of a non-programmable pocket calculator Is permisSIbIe Closed book examination This examination questton paper remains the property of the University of South Africa and may not be removed from the examination venue [TUFIN OVER] UNIVERSITY EXAMENATIONS UNIVERSITEITSEKSAMENS U N I SA z :F'fliym FAC1 503 October/November 2016 FINANCIAL ACCOUNTtNG PRINCIPLES FOR LAW PRACTITIONERS Duratron 2 Hours 100 Marks EXAMINATION PANEL AS APPOINTED BY THE DEPARTMENT. Use of a non-programmable pocket calculator is permrssible Closed book examination Thas examination question paper remains the property of the Unwersrty of South Africa and may not be removed from the examination venue ThlS paper consnsts of 8 (EIGHT) pages PLEASE NOTE: ‘I 2 3 4 5 6 7 Ensure that you are writing the correct examination paper Ensure that you are handed the correct examination answer book (BLUE) by the anvrgllatcr ThlS paper consnsts of 5 (FIVE) questions All questions must be answered Basrc calculations where applicable, must be shown Each question attempted must be commenced on a new (separate) page Wrrte Iegnbly In blue or black Ink PROPOSED TIMETABLE _ __ AVOId deVIatln- from thlS Question 7 __ To IC 7 number p Subsrdlary Journals Accountlng equation F Tie in j minutes ‘ 30 3 Analysrs of thermal statements mancral statements 5 Multrple cho:ce questions 24 25 12 ; 120 24 19 22 10 100 [TURN OVER} 2 FAC1503 10/11 2016 QUESTlON 1 (25 marks)(30 minutes) Commence this question on a new (separate) page The followrng Information for the month ended 29 February 2016 relate to Hellcy Cleanlng Servrces Hellcy Cleaning Servuces uses the perlOdlC Inventory system and rs a registered VAT vendor VAT IS Included, where applicable. In all amounts at a rate of 14% The following transactions were entered Into by Hellcy Cleaning Services for February 2016: Day 1 Issued a cheque to ANCO Bank as a repayment on a loan, R2 200 2 Purchased an automatic washlng machine for R3 200 from Top of Tops Laundry and pad by cheque 4 Total servrces rendered per cash register roll, R6 500 10 Purchased cleaning matenals from Qulck Clean for R3 250 and pard by cheque 14 Recewed R1 700 from P Oosthwzen, a debtor, m part settlement of hrs account 17 A cheque for R1 280, received on 15 January 2016 from H Hamel, a debtor. was returned by the bank on 26 January 2016 marked "RID" A new cheque for R1 660 was Issued by H Hamel to replace the prevrous cheque The new cheque for R1680 Includes Interest that was charged to hrs arrear account on 31 January 2016 19 Cash banked for servrces rendered, R8 230 21 Purchased packing materials on credit from 0’ Reilly Cleaning Solution, R6 500 23 Issued a cheque for R11 400. to pay salaries and wages 27 Paid City Electric Meters, in settlement of the water and electncrty account of R5 870, by means of an electronic fund transfer 28 Issued a cash cheque for R1 600, to pay the traffic fines of the delivery vehicle 29 Total Interest received as per the bank statement for February 2016, amounted to R1 320 REQUIRED: Open the followrng subsrdlary journals for the month ended 29 February 2016 m the accounting records of Hellcy Cleaning Servrces and record the above transactions In the relevant subSIdIary journals (a) A cash receipts Journal Make provrsron for the followrng columns date, details, bank. servrces rendered, VAT output, debtors control and sundry accounts (b) A cash payments journal Make prowsron for the followmg columns date. details, bank, cleaning and packing materials. and sundry accounts (c) A general Journal Make prowsron for the followmg columns date, details, debut and credlt [TURN OVER] 3 FAC1503 10/11 2016 QUESTION 2 (24 marks)(29 minutes) Commence this question on a new (separate) page. The followmg transactions took place In the busmess of PFC Traders during March 2016 The entity uses the periodic Inventory system and Is not a registered VAT vendor The following transactions were entered Into by PPC Traders for March 2016: Day 2 Purchased goods on credIt from C Crack for R3 150 The terms and conditions for purchasmg goods on credit from C Crack, prowde that settlement a discount of 12% wuil be granted, rf PPC Traders pays their account Within 15 days An InVOIce to the amount of R1 460 was Issued to K MOkgOSI for goods sold to him on credit 8 A credit note to the amount of R460 was Issued to K MOKQOSI for goods returned by him 11 A debtor, G Grey who owed R1 080 to PPC Traders, was declared Insolvent by the North Gauteng High Court His account must be written off as Irrecoverable 12 The owner transferred his personal deIIvery vehicle With a value of R45 000 to the entity 15 Received R1 000 from K MOKQOSI, a debtor, In full settlement of his account 16 Paid the amount owed to C Crack (refer to 2 March 2016) 25 Goods sold for R7 530 cash, was Incorrectly recorded In the debtors control column of the cash receipts Journal The error must be corrected REQUIRED: Analyse the above transactions In tabular format, as follows debited credited Equity Liabilities Example 4 December Paid wages of R2 000 --m -2000 -2000 ‘- Piease note: w Account to be Account to be Effect on the basic accounting equation The columns In respect of the accounting equation must not be totalled Each amount must be preceded by a plus Sign (+) for an Increase or a minus Sign H for a decrease, to indicate an Increase or a decrease In the element of the accounting equation Show all calculations [TURN oven] 4 FAC1503 10/11 2016 QUESTION 3 (19 marks)(24 minutes) Commence this question on a new (separate) page The followrng Information was obtained from the accounting records of Doreen Traders Pty (Ltd) on 29 February 2016 DOREEN TRADERS PTY (LTD) ABRIDGED STATEMENT OF FINANCIAL POSITION AS AT 29 FEBRUARY 2016 R ASSETS Non-current assets 980 000 Property, plant and equrpment 980 000 Current assets 568 000 Inventories 250 000 Trade and other receivables . . 217 000 Cash and cash equsvalents 101 000 Total assets 1 548 000 EQUITY AND LIABILITIES Total equity 616 500 Capital . 616 500 Total Ilabllities . . 931 500 Non-current liabilities 558 000 Long-term borrowmgs (Mortgage) 558 000 Current liabilities . 373 500 Trade and other payables 373 500 Total equity and Ilabilities . . . . . 1 548 000 Additional Information 1 Credit sales represent 65% of total sales (revenue) Total sales amounted to R950 000 2 Credit purchases represent 45% of total purchases Total purchases amounted to F1550 880 3 On 1 March 2015, the opening balance of the debtors control was R175 000 and that of the creditors control, R325 000 4 PI'OfIt for the year ended 29 February 2016 amounted to R260 500 5 An extract from the statement of profit or loss and other comprehenswe Income for the year ended 29 February 2016, Indicated that the Interest expense for the year amounted to R74 500 and the normal Income tax expense for the same f1nanc1al year, amounted to R50 500 [TURN oven] 5 FAC1503 10/11 2016 QUESTION 3 (continued) REQUIRED: Calculate the followmg ratios of Doreen Traders Pty (Ltd) at 29 February 2016 (a) Trade receivables collection penod (days) (b) Trade payables settlement period (days) © Current retro ((1) Return on assets (e) Solvency ratlo Please note: All formulas and calculations must be shown All answers must be rounded off to 2 decrmal places after the comma {TURN oven] 6 FAC1503 10/11 2016 QUESTION 4 (22 marks)(25 minutes) Commence this question on a new (separate) page The foliowmg Information was obtained from the accounting records of Maboko Traders on 31 December 2015 TRIAL BALANCE AS AT 31 DECEMBER 2015 Sales . 520 000 Purchases 270 500 Sales returns .. 5 300 Bank . . 15 000 Debtors control 17 000 Purchases returns ...... . Inventory 1 January 2015 . 9 000 Machinery at cost 35 000 Vehicles at cost 72 000 Accumulated depreCIation. vehicles (1 January 2015) Accumulated depreCIation machinery (1 January 2015) Creditors control Insurance ..... 11 750 Drawmgs 6 000 Wages . 125 000 Administrative expenses . 75 200 Capital . . . . . 145 100 Rental expense . . 39 600 Repairs and maintenance . .. 8 100 Printing 4 700 ssnso Additional information (a) Maboko Traders uses the periodic inventory system (b) Maboko Traders IS not registered as a VAT vendor © Inventory at 31 December 2015 amounted to R18 000 (d) Maboko Traders prowdes for depreCiation as follows - vehicles 20% on the straight-line method - machinery 10% on the diminishing balance method REQUIRED: Prepare the statement of profit or loss and other comprehenswe income of Maboko Traders for the year ended 31 December 2015 Please note: All formulas and calculations must be shown [TURN oven] 7 FAC1503 10/11 2016 QUESTION 5 (10 marks)(12 minutes) Commence this question on a new (separate) page. MULTIPLE CHOICE QUESTIONS Thus question consusts of fuve MULTIPLE CHOICE QUESTIONS of 2 marks each The questuons are not related to each other Only one option for each questuon us correct lnducate the chosen optuon In your examunatuon script next to the questlon number In brackets, for example, Question (a) optuon 2 (a) I r \ b) C) The total of the debtors column In the cash receupts journal of Jooks Traders had been under cast by R2 900 Whuch one of the followrng general ledger accounts wull be affected by thus error? Debtors control account Sales account Purchases account Credutors control accomt Bank account U'l-hCON-e (2) Choose the correct statement An asset uncreases on the credut sude and decreases on the debut sude of an account A luabuluty Increases on the debut sude and decreases on the credut sude of an account Income Increases on the debut sude and decreases on the credut sude of an account An expense uncreases on the debut sude and decreases on the credit sude of an account Drawrngs Increase on the credit sude and decrease on the debut sude of an account U'IbOOMA (2) The followung unformatuon was obtauned from the funancual records of Better Legal Chouce Attorneys on 31 March 2016 Cluents' account balances P Packard - R2 500, S Sukhona - R6 500 and T Tot - R8 900 Trust credutors’ account balances S Sukhona - R6 500, P Packard - R3 500 and T Tot - R5 000 Whuch of the followung subsmluary journals wull be affected If all the allowable transfers were made on 31 March 2016 and uf the outstanding balances on the busuness accounts and trust accounts were also paud on 31 March 20169 (a) the trust cash recelpts journal (b) the transfer journal (0) the trust cash payments Journal (d) the fees journal (e) the busuness cash receupts Journal (f) the general Journal (9) the busuness cash payments journal (a), (b) and (c) 1 2 (b).(0). (e)and(g) 3 (b). (c) and (e) 4 5 (a). (b). (C) and (Q) (C). (e),(f) and (Q) (2) [TURN oven] a FA01503 10/11 2016 QUESTION 5 (continued) MULTIPLE CHOICE QUESTIONS (continued) ((1) (8) Echo Traders uses control accounts Which one of the followmg alternatives Will cause the trial balance not to balance? 1 2 3 4 5 The discount column in the cash payments Journal was debited to the discount allowed account in the general ledger A credit purchase inv0ice was correctly entered as R514 in the purchases iournal, but the amount was incorrectly posted as R415 to the personal account of the creditor The bank overdraft appears as a credit balance in the trial balance A credit sales inv0ice of R1 700 was incorrectly entered as R170 In the sales Journal and posted as such to the personal account of the debtor The bank account (favourable) appears as a debit balance in the trial balance (2) The followmg information was obtained from the Manual records of Better Legal Ch0ice Attorneys on 31 March 2016 Clients’ account balances P Packard - R2 500, S Sikhona - R6 500 and T Tot - R8 900 Trust creditors’ account balances S Sikhona - R6 500, P Packard - R3 500 and T Tot - R5 000 Which amounts WIII appear in the transfer journal on 31 March 2016, if all the above mentioned clients and creditors settled their outstanding balances on 31 March 2016'? macaw-s P Packard R2 500, S Sikhona R6 500 and T Tot R8 900 P Packard R2 500. S Sikhona R6 500 and T Tot R5 000 P Packard R3 500. S Sikhona R0 and T Tot R8 900 P Packard R2 500, S Sikhona R6 500 and T Tot R8 900 P Packard R3 500. S Sikhona R6 500 and T Tot R5 000 (2) [10] ® UNISA 2016 ...
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