FAC1502 Oct/Nov 2016 exam paper — questions

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  1. Question 1.1 · Property, plant & equipment and depreciation · 20 marks

    Beaux Art Shop, extract from the pre-adjustment trial balance at 30 June 2016: capital R180 000; drawings R35 000; land and buildings at cost R250 000 with accumulated depreciation R128 000 (the year's R8 000 buildings depreciation is already recorded); vehicles at cost (1 July 2015) R95 000 with accumulated depreciation R53 500; equipment at cost (1 July 2015) R65 000 with accumulated depreciation R12 350; debtors control R12 300; trading inventory (1 July 2015) R18 500; long-term loan from Quah Bank R70 000; creditors control R23 400. Adjustments: closing inventory R23 500; the vehicles are one bought for R45 000 on 31 December 2013 and one bought for R50 000 on 1 July 2011 which was sold on 31 March 2016 for R2 500 — vehicles are depreciated at 20% straight-line; canvas printing equipment costing R15 000 was bought on 1 April 2016 — equipment is depreciated at 10% on the diminishing balance; a R17 500 loan instalment is payable on 1 July 2016; total comprehensive income after all adjustments is R19 360; the bank balance at 30 June 2016 is R15 450. Prepare the property, plant and equipment note for the year ended 30 June 2016 (total column not required), rounding to the nearest rand.Show the full question

  2. Question 1.2 · Property, plant & equipment and depreciation · 13 marks

    Using the Beaux Art Shop information, prepare the statement of financial position as at 30 June 2016 in line with IFRS (notes and comparatives not required).Show the full question

  3. Question 2.1 · Non-profit entities: membership fees and income & expenditure · 3 marks

    Oozma Kappa Football Club: founding member Mike Wozaski donated the indoor soccer facility (cost R500 000, shown as the Mike Wozaski Fund R500 000 at 31 December 2014). All income from hosting events on the property — R16 200 this year — may only be used to pay wages; wages for the year were R14 400. Calculate the non-expendable and expendable balances of the Mike Wozaski Fund at 31 December 2015.Show the full question

  4. Question 2.2 · Non-profit entities: membership fees and income & expenditure · 21 marks

    Oozma Kappa Football Club, pre-adjustment balances at 31 December 2015: team bus R300 000 (accumulated depreciation R54 000 at 31 Dec 2014); indoor soccer facility R500 000 (accumulated depreciation R207 500); membership fees received R48 200; membership fees received in advance (31 Dec 2014) R15 840; membership fees in arrears (31 Dec 2014) R6 700; telephone R660; water and electricity R3 800; wages R14 400 (paid from the Wozaski Fund); events hosting income R16 200 (Wozaski Fund); admission fees R3 500; interest received on current account R2 340; vehicle maintenance R8 800; fuel R8 760; marketing and printing R3 700; soccer kits and memorabilia — inventory (31 Dec 2014) R1 100, purchases R6 000, sales R11 790. Adjustments: depreciation on the diminishing balance — bus 10% and facility 5%; membership fees were R1 200 per member for 2015 and rise 10% each year; two members who had paid for the year were expelled on 30 September 2015 and must be refunded proportionately; at 31 December 2015 seven members had already paid 2016 fees and five members' 2015 fees were in arrears; kits and memorabilia costing R1 500 were on hand; a R1 580 vehicle service was paid on 31 December 2015 for a service on 31 January 2016; printing expenses of R450 are owing. Prepare the income and expenditure statement for the year ended 31 December 2015.Show the full question

  5. Question 3.1 · Bank reconciliation · 8 marks

    Acting Traders, May 2016: bank account overdrawn R31 580 at 30 April 2016; bank statement unfavourable R32 126 at 31 May 2016; cash receipts journal R51 250; cash payments journal R48 250. On the April reconciliation but not on the May statement: cheque 431 (30 November 2015, Crazy Dealers) R1 200 and cheque 685 (4 March 2016, ICT Services) R2 050. In the May journals but not on the statement: a R2 500 deposit on 31 May and cheque 759 (30 May, creditor Barney) R3 085. On the statement but not in the journals: a R2 500 direct deposit for rent from Mickey Mouse; interest on overdraft R750; ledger and cash handling fees R881; an R/D cheque from debtor Teletubbies R450; a R3 500 deposit belonging to another client credited in error; a R1 250 insurance stop order; and a R10 350 cheque of another client debited in error. Cheque 736 for R1 535 to Barney Furnishers (furniture) was recorded in the December 2015 cash payments journal as R1 835. Complete the detail and bank columns of the cash receipts and cash payments journals for May 2016.Show the full question

  6. Question 3.2 · Bank reconciliation · 3.5 marks

    Using the Acting Traders information, prepare the bank account in the general ledger, properly balanced, at 31 May 2016.Show the full question

  7. Question 3.3 · Bank reconciliation · 6.5 marks

    Using the Acting Traders information, prepare the bank reconciliation statement as at 31 May 2016, beginning with the balance per bank statement.Show the full question

  8. Question 4.1 · Debtors & creditors control · 11.5 marks

    Joel Enterprises' inexperienced bookkeeper prepared this debtors control account for November 2015 — Debit: balance b/d (correct) R125 880; bank (debtors column, CRJ) R54 890; settlement discount granted (CRJ) R12 850; sales returns (SRJ) R15 670; purchases (PJ) R67 089. Credit: balance b/d (correct) R5 600; purchases returns (PRJ) R4 680; sales (SJ) R45 000; settlement discount (CPJ) R13 670; transfer from creditors ledger (GJ) R5 400; transfer to creditors ledger (GJ) R5 600; balance c/d R196 429. The investigation also found: the list of individual debtors totals R140 010; the sales journal was overcast by R2 400; P Koos's R3 600 debit balance was omitted from the list; a R3 450 credit note to B Bless was correctly entered in the sales returns journal but posted to the wrong side of his account; a R6 890 sale was recorded twice in P Sibanyoni's account; the R5 400 transfer from the creditors ledger (creditors with debit balances) is correctly recorded in the control account; P Piet's R4 780 balance was written off as irrecoverable in the general journal and posted to the control account but not to his personal account; the debtors column of the cash receipts journal was undercast by R3 780; the R5 600 transfer to the creditors ledger refers to debtors' credit balances at the start of the month; a R24 300 cheque from L Letima received in October in full settlement of his R25 500 account was dishonoured in November, and the only entry made was in his personal account; R16 500 received from a debtor was recorded as R15 600 in the cash receipts journal and posted as such to both ledgers. Prepare the corrected debtors control account, properly balanced, for November 2015.Show the full question

  9. Question 4.2 · Debtors & creditors control · 8.5 marks

    Using the Joel Enterprises information, reconcile the total of the list of debtors' balances with the corrected debtors control account balance at 30 November 2015.Show the full question

  10. Question 5.1 · Financial statements of a sole trader · 1 marks

    Which statement represents the net worth of an entity at a specific point in time?Show the full question

  11. Question 5.2 · Financial statements of a sole trader · 1 marks

    When does a long-term liability become a current liability?Show the full question

  12. Question 5.3 · Bank reconciliation · 1 marks

    Cheques issued to suppliers but not yet presented to the bank for payment when the bank reconciliation statement is prepared are called what?Show the full question

  13. Question 5.4 · Adjustments & year-end entries · 1 marks

    To which category does the ledger account 'income received in advance' belong?Show the full question

  14. Question 5.5 · Adjustments & year-end entries · 1 marks

    To which category does the ledger account 'electricity deposit' belong?Show the full question

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