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EACC1614 2023 Final

The document is an examination paper for the School for Accountancy at the University of the Free State, detailing instructions and three questions related to accounting practices. It includes a pre-adjustment trial balance for Mabula Traders, transactions for Computrade Traders, and bank reconciliation for Super Stores. Each question has specific requirements and marks allocated, with an emphasis on compliance with IFRS and clear calculations.

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0% found this document useful (0 votes)
18 views7 pages

EACC1614 2023 Final

The document is an examination paper for the School for Accountancy at the University of the Free State, detailing instructions and three questions related to accounting practices. It includes a pre-adjustment trial balance for Mabula Traders, transactions for Computrade Traders, and bank reconciliation for Super Stores. Each question has specific requirements and marks allocated, with an emphasis on compliance with IFRS and clear calculations.

Uploaded by

gqforty8
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 7

UNIVERSITY OF THE FREE STATE

BLOEMFONTEIN CAMPUS, QWAQWA CAMPUS, SOUTH CAMPUS

EACC1614/EFCC2614

SCHOOL FOR ACCOUNTANCY

CONTACT NUMBER: 051 401 2333

EXAMINATION: Main Mid-year 2023


PAPER 1

ASSESSOR(S): Dr. H. Joubert


Me. M. Van Niekerk

MODERATOR: Me. J. Sibanda

TIME: 2 hours MARKS: 80

This paper comprises of 3 questions, set on 5 numbered pages.


Please check whether your paper is complete.
________________________________________________________________________

INSTRUCTIONS
1. Answer each new question on a new page in the answer book and clearly number
each question.
2. Answers may not be written in pencil or erasable pen.
3. The marks shown against the requirement(s) for each question should be taken as an
indication of the expected length and the required depth of the answer.
4. Even if it is not explicitly required, you should show workings and cross-reference
them to your answer.
5. Working papers must be handed in with scripts.
6. Tippex may not be used.

Disclaimer: All names of persons, places and business entities mentioned in this exam
paper are fictitious and any resemblance to real persons, living or dead, places and
business entities are purely coincidental.
QUESTION 1 (33 marks; 50 minutes)
As the newly appointed bookkeeper, you received the following pre-adjustment trail balance from
Mabula Traders as well as some additional information that requires your attention:

Pre-adjustment trail balance of Mabula Traders at 28 February 20.22.


Debit Credit
R R
Capital 274 620
Drawings 44 000
Land and Buildings at cost 242 000
Vehicles at cost 99 000
Accumulated depreciation on vehicles (1 March 20.21) 19 800
Equipment at cost 77 000
Accumulated depreciation on equipment (1 March 20.21) 22 000
Trading inventory 55 000
Accounts receivable 49 500
Allowances for credit losses 3 300
Accounts payable 44 000
Bank 56 650
18% bond on property 132 000
Sales 403 700
Cost of sales ?
Salaries and wages 104 258
Insurance 4 950
Stationery 792
Rent income 36 900
Credit losses 1 320
936 320 936 320

Additional information:
1. A gross profit percentage of 50% on sales was applied during the year.
2. S. Smith, a receivable who owed R625 is insolvent and 20 cents in the rand was received
and recorded. The remaining balance of his account must still be written off as
irrecoverable.
3. The allowance for credit losses must be adjusted to 5% of outstanding receivables.
1
4. The interest on the bond for the current reporting period is still payable. The bond was
registered on 30 June 20.20
5. A wage of R200 is still due to a part time employee.
6. Included in insurance is an amount of R1500, a premium which was paid for the 12 months
ending 30 June 20.22.
7. Stationery on hand on 28 February 20.22 was R220.
8. Rent income for February was still outstanding. Rent was increased with R200 per month
as from 1 November 20.21.
9. It is the policy of the business to depreciate vehicles at 10% per annum on cost price, and
equipment at 10% per annum according to the diminishing balance method.
10. The entity is not registered for VAT.

QUESTION 1: REQUIRED Marks


Prepare the Statement of Profit and Loss of Mabula Traders for the year
a) 17
ended 28 February 20.22.
Prepare the Current asset section of the Statement of Financial Position
b) 8
as at 28 February 20.22.
Prepare the Statement of Changes in Equity for the year ended
c) 3
28 February 20.22
Mabula, the owner, is struggling to understand what the term ‘assets’
means. “I think my knowledge and skills are assets to my business, but I
d) 5
do not see these in the financial statements.” Can you explain this
omission to Mabula?
TOTAL MARKS 33
Answers are to comply with (IFRS). Round all amounts to the nearest Rand. Show all
calculations clearly. Assume that all items and amounts are material except where the
information clearly indicates otherwise.

2
QUESTION 2 (34 marks; 51 minutes)
Computrade Traders (‘Computrade’) buys and sells computers in South Africa. A Value Added
Tax (VAT) rate of 15% is applicable. Computrade, its customers and suppliers are all registered
VAT vendors. The perpetual inventory method is used, and the entity applies a profit mark-up
of 30% on cost.

Computrade offers 4% settlement discount to all debtors whose accounts are settled within 30
days of the invoice date. Normally all customers take advantage of the discount offered, except
if indicated otherwise. All amounts include VAT unless stated otherwise.

The following transactions occurred during June 20.22:

Date Transaction
Purchased 1 000 computers at R7 475 each on credit from Info Solutions Limited
01
and received a 1.5% sales discount.
Sold 455 computers on credit to Modern IT for a total of R5 337 150. Modern It
11
takes advantage of the 4% settlement discount offered by Computrade.
The owner took 2 computers to give to his twin daughters who study BCom
14
Accounting. The selling price for each computer is R11 730.
Computrade received R5 175 in cash as rent for a section of their offices that they
16
sub-let to a cell phone repairs shop.
25 Modern IT settled their account in full.

QUESTION 2: REQUIRED Marks


Prepare the General Journal of Computrade to record the above transactions for
the month of June 20.22. Remember to write the date for each transaction in 34
your General Journal. (Journal narrations are not required).

TOTAL MARKS 34

Answers are to comply with (IFRS). Round all amounts to the nearest Rand. Show all
calculations clearly. Assume that all items and amounts are material except where the
information clearly indicates otherwise. Remember to indicate next to each account in
the journal one of the following abbreviations between brackets: SPL, SCE, SFP.

3
Question 3 (13 Marks; 19 Minutes)

The information provided relates to Super Stores. The business is owned by Trevor Smith.
- Trevor receives the official bank statement on the 26st day of each month. He uses this to do
the bank reconciliation.
- EFTs are renumbered according the date order.

A. On 1 July 20.22, the Bank account in the ledger reglected a favourable balance of R53 800.
B. The Bank Reconciliation Statement prepared on 30 June showed the following outstanding
deposits and EFTs:
 Deposit dated 15 June 2022 R19 500
 Deposit dated 29 June 2022 R12 800
 EFT 297 R9 600
 EFT 298 R12 300
Note:
- The deposit on 15 June 20.22 appeared on the July Bank statement as R15 500. An
investigation revealed that the cashier at that time has resigned. The outstanding amount
must be written off.
- EFT 297 was correctly reflected as R6 900 on the July Bank Statement.
- The other outstanding amounts from the previous month appeared on the July Bank
Statement.

C. Before receiving the July 20.22 Bank Statement, the Cash Journals reflected the
following provisional totals:
CASH RECEIPTS JOURNAL CASH PAYMENTS JOURNAL
R101 200 R135 215

D. The following items appeared on the July Bank Statement, but not in the Cash Book:
a) A debit card payment of R1 400 for petrol for the business vehicle. Trevor neglected to
submit the transaction document to the bookkeeper.
b) A direct deposit of R72 000 from Unic College. This is an error on the statement as it
does not apply to Super Stores. The bank was notified of this error.
c) Total bank charges, R825.
d) Interest earned on savings account, R260.

4
E. Entries in the Cash Journals after 26 July 20.22:
 Deposit on 29 July 20.22 R29 500
 EFT 350 to PN Stationers, dated 28 July 20.22 R4 200
 EFT 351 to PF Couriers, dated 30 July 20.22 R3 800

5
QUESTION 3: REQUIRED Marks
a) Prepare the updated bank account of Super Stores for July 20.22. 7
Prepare the bank reconciliation statement of Super Stores as at
b)
31 July 20.22. 6
TOTOTAL MARKS 13
Answers are to comply with (IFRS). Round all amounts to the nearest Rand. Show all
calculations clearly. Assume that all items and amounts are material except where the
information clearly indicates otherwise.

END OF PAPER

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