Department of Financial Accounting - files. · PDF fileMrs B Ceki Module Telephone Number: 012 429 4176 Module E-mail Address: [email protected] . FAC1601/101/3/2012 4 All queries

FAC1601/101/3/2012

Tutorial letter 101/3/2012

FINANCIAL ACCOUNTING REPORTING FAC1601

SEMESTER 1 and 2

Department of Financial

Accounting

This tutorial letter contains important

information about your module.

Bar code

FAC1601/101/3/2012

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CONTENTS

1. INTRODUCTION AND WELCOME...................................................................................................................... 3

2. PURPOSE AND OUTCOMES OF THE MODULE................................................................................................ 3

3. COMMUNICATION WITH YOUR LECTURERS .................................................................................................. 3

4. STUDY MATERIAL ............................................................................................................................................. 4

5. STUDENT SUPPORT SERVICES ....................................................................................................................... 5

6. ASSESSMENT .................................................................................................................................................... 6

7. EXAMINATIONS ................................................................................................................................................. 8

8. PROPOSED STUDY PROGRAMME FOR 2012 ................................................................................................ 11

APPENDIX A: FIRST SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 1)............................................. 12

APPENDIX B: FIRST SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 2)............................................. 19

APPENDIX C: SECOND SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 1) ....................................... 26

APPENDIX D: SECOND SEMESTER COMPULSORY ASSIGNMENT (ASSIGNMENT 2) ....................................... 33

FAC1601/101/3/2012

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1. INTRODUCTION AND WELCOME

We are pleased to welcome you to this module and hope that you will find it both interesting and rewarding.

We will do our best to make your study of this module successful. You will be well on your way to success if

you start studying early in the semester and resolve to do the assignments properly.

You will receive a number of tutorial letters during the year. A tutorial letter is our way of communicating with

you about teaching, learning and assessment.

This tutorial letter contains important information about the scheme of work, resources and assignments for

this module. We urge you to read it carefully and to keep it at hand when working through the study material,

preparing the assignments, preparing for the examination and addressing questions to your lecturers.

Please read Tutorial Letter 301 in combination with this tutorial letter as it gives you an idea of generally

important information when studying at a distance and within a particular College.

In this tutorial letter (101), you will find the assignments and assessment criteria as well as instructions on the

preparation and submission of the assignments. It also provides all the information you need with regard to

the prescribed study material and other resources and how to obtain them. Please study this information

carefully and make sure that you obtain the prescribed material as soon as possible.

Right from the start we would like to point out that you must read all the tutorial letters you receive during

the semester immediately and carefully, as they always contain important and, sometimes, urgent

information. You will also find useful information of a general nature in Tutorial Letter 301 and in the booklet

My studies @ Unisa. Having read through these, you should be well prepared to begin.

We hope that you will enjoy this module and wish you all the best!

2. PURPOSE AND OUTCOMES OF THE MODULE

The purpose of this module is to introduce students to financial accounting and reporting referring to some of

the International Accounting Standards issued by the International Accounting Standards Board. In this

course the focus of financial reporting and the analysis of financial statements are on partnerships and close

corporations. You must also be able to record the accounting entries for the formation of, admittance to,

retirement or death of a partner and the liquidation of partnerships. Further, you must be able to record the

accounting entries to the capital structure of companies, be able to record the transactions relating to

businesses with branches. Lastly, you must be able to prepare calculations relating to the time value of

money.

3. COMMUNICATION WITH YOUR LECTURERS

The lecturers responsible for this module:

Mr MT Hlongoane Mrs FM Osman

Mr A Eysele

Mr J van Staden

Mr RN Ngcobo

Mrs B Ceki

Module Telephone Number: 012 429 4176

Module E-mail Address: [email protected]

mailto:[email protected]

FAC1601/101/3/2012

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All queries that are not of a purely administrative nature but are about the content of this module should be

directed to us. Please have your study material with you when you contact us.

Email and telephone numbers are included above but you might also want to write to us. Letters should be

sent to:

The module leader (FAC1601)

Department of Financial Accounting

PO Box 392

UNISA

0003

PLEASE NOTE: Letters to lecturers may not be enclosed with or inserted into assignments.

Communication with the university If you need to contact the university about matters not related to the content of this module, please consult the publication My studies @ Unisa, which you received with your study material. This brochure contains information on how to contact the university (e.g. to whom you can write for different queries, important telephone and fax numbers, addresses and details of the times certain facilities are open). Always have your student number at hand when you contact the university.

Please note that all administrative enquiries should be directed to the Unisa Contact Centre.

Enquiries will then be channelled to the correct department. The details are as follows:

Calls (RSA only) 0861 670 411

International calls +27 11 670 9000

Fax number (RSA) (012) 429 4150

Fax number (international) +27 12 429 4150

Email [email protected]

4. STUDY MATERIAL

4.1 Inventory letter

You should have received an inventory letter telling you what you have received in your study package and

also showing items that are still outstanding. Also see the brochure entitled My studies @ Unisa.

Check the study material that you have received against the inventory letter. You should have received all

the items listed in the letter, unless there is a statement like “out of stock” or “not available”. If any item is

missing, follow the instructions on the back of the inventory letter without delay.

PLEASE NOTE

Your lecturers cannot help you with missing study material. Please contact the Unisa Contact Centre

at 0861 670 411 (RSA only), or +27 11 670 9000 (international calls) (also see paragraph 3 above). You

can also send an e-mail to [email protected].



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4.2 Study material

The Department of Despatch should supply you with the following study material for this module:

One study guide

Tutorial Letters 101 and 301 at registration and others later

Apart from Tutorial Letters 101 and 301, you will also receive other tutorial letters during the semester. These

tutorial letters will not necessarily be available at the time of registration, but will be despatched to you as

soon as they are available or needed (for instance, for feedback on assignments).

If you have access to the internet, you can view the study guides and tutorial letters for the modules for which

you are registered on the university‟s online campus, myUnisa, at http://my.unisa.ac.za.

4.3 Prescribed textbook

Your prescribed textbook for this module is:

About Financial Accounting, Volume 2, 4th

Edition by Berry PR, et al. LexisNexis Butterworths. Durban. 2011.

Please consult the list of official booksellers and their addresses listed in My studies @ Unisa. If you have any difficulty obtaining books from these bookshops, please contact the Prescribed Books Section.

5. STUDENT SUPPORT SERVICES

For information on the various student support systems and services available at Unisa (e.g. student

counseling, tutorial classes, language support), please consult the publication My studies @ Unisa, which you

received with your study material.

5.1 Contact with fellow students

5.1.1 Study groups

It is advisable to have contact with fellow students. One way to do this is to form study groups. The

addresses of students in your area may be obtained from the following department:

Directorate: Student Administration and Registration

PO Box 392

UNISA

0003

Please contact the Unisa Contact Centre at 0861 670 411.

5.1.2 myUnisa

If you have access to a computer that is linked to the internet, you can quickly access resources and information at the university. The myUnisa learning management system is Unisa's online campus that will help you to communicate with your lecturers, with other students and with the administrative departments of Unisa – all through the computer and the internet.

To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the “Login to myUnisa” link on the right-hand side of the screen. This should take you to the myUnisa website.

You can also go there directly by typing http://my.unisa.ac.za.

http://my.unisa.ac.za/

http://www.unisa.ac.za/


FAC1601/101/3/2012

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Please consult the publication My studies @ Unisa, which you received with your study material, for more information on myUnisa.

5.2 Discussion classes

Group discussions, offered by the lecturers of module FAC1601, will be held at predetermined venues during each semester. You will be notified of the dates, times and venues of these classes.

The abovementioned discussion classes are the only official lectures offered by the lecturers of module

FAC1601.

Lectures offered by private organisations or persons are not the responsibility of the Department of Financial

Accounting at Unisa. Lecturers (or the Department of Financial Accounting) should not be consulted with

enquiries in this regard.

6. ASSESSMENT

6.1 Assignments and learning

Assignments are seen as part of the learning material for this module. As you do the assignment, study the reading texts, consult other resources, discuss the work with fellow students or tutors or do research, you are actively engaged in learning. Looking at the assessment criteria given for each assignment will help you to understand what is required of you more clearly.

6.2 General remarks

PLEASE NOTE: Enquiries about assignments (e.g. whether or not the university has received your assignment or the date on which an assignment was returned to you) must be directed to the Unisa Contact Centre at 0861 670 411 (RSA only), or +27 11 670 9000 (international calls) (also see par 3 above). You might also find information on myUnisa. To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the „login to myUnisa link under the myUnisa heading on the screen. This should take you to the myUnisa website. You can also go there directly by typing http://my.unisa.ac.za.

You can also send an e-mail to [email protected].

Assignments should be addressed to:

The Registrar

PO Box 392

UNISA

0003

You may submit written assignments and assignments done on mark-reading sheets either by post or electronically via myUnisa. Assignments may not be submitted by fax or email. For detailed information and requirements as far as assignments are concerned, see the brochure My studies @ Unisa, which you

received with your study material.

To submit an assignment via myUnisa:

Go to myUnisa.

Log in with your student number and password.

Select the module.

Click on assignments in the menu on the left.

http://www.unisa.ac.za/



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Click on the assignment number you want to submit.

Follow the instructions on the screen.

6.3 Feedback on assignments

You will receive the correct answers automatically for multiple-choice questions. Feedback on compulsory

assignments will be sent to all students registered for this module in a follow-up tutorial letter, and not

only to those students who submitted the assignments. The tutorial letter number will be 201, 202, etc.

As soon as you have received the feedback, please work through it. The assignments and the feedback on

these assignments constitute an important part of your learning and should help you to be better prepared for

the next assignment and the examination.

6.4 Study process

You may encounter fewer problems when you work as follows:

Paragraph 8 of this tutorial letter sets out the suggested study programme for semester 1 and 2. First

semester students: refer to paragraph 8.1 and second semester students: refer to paragraph 8.2.

Study the relevant study units of the Study Guide for assignment 01. Do all the exercises in the study guide and make sure that you understand the contents of the study material.

Do assignment 01 and send it to UNISA for marking. Remember, the submission of assignment 01 is compulsory for examination admission and contributes to your year mark (refer to paragraph 6).

Study the relevant study units of the Study Guide for assignment 02 and do the assignment. Remember, the submission of assignment 02 is compulsory and contributes to your year mark (refer to paragraph 6).

After completing an assignment, carry on with the study programme. Do not wait for the suggested

solution or for the return of the marked assignment.

Students often fail to plan their studies properly in order to achieve specific study goals at predetermined

dates. This leads to a haphazard approach to studying and the use of ineffective study techniques.

The study programme for each semester is herein provided to assist you in this regard. The programme

indicates the dates during which certain sections of the study material should be studied, as well as the dates

by which the compulsory assignments should be completed.

The study programme is based on the following assumptions:

That study will commence on either 15 January 2012 for the first semester or 1 July 2012 for the second semester and that the course should be completed leaving sufficient time for revision.

That you should study at least 6 hours per week. We are of the opinion that this is within your reach.

We are convinced that, if you adhere to the suggested programme, you should be able to master the subject.

It is very important that the subject matter covered in the study units should be mastered and not just be

skimmed. If you happen to register late or fall behind with this programme, extra effort on your part will be

necessary.

Appendix A and B contains the compulsory assignment 01 and 02 for students who are registered for

FAC1601 in the first semester.

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Appendix C and D contains the compulsory assignment 01 and 02 for students who are registered for

FAC1601 in the second semester.

NB: Note that these assignments are not the same. You must ensure that you submit the assignments

which pertain to the semester that you are registered in for FAC1601.

IF YOU ARE REGISTERED FOR FAC1601 IN THE SECOND SEMESTER YOU CANNOT SUBMIT ANY

ASSIGNMENTS DURING THE FIRST SEMESTER. ASSIGNMENTS INCORRECTLY SUBMITTED WILL

NOT BE MARKED AND RETURNED TO STUDENTS.

6.5 Important aspects regarding assignments

There are 4 assignments for this module:

Assignment 01 is a multiple choice assignment that is compulsory and contributes 50% towards your year mark. If you do not submit this assignment you will not be admitted to the examination;

Assignment 02 is a multiple choice assignment that is also compulsory, and contributes 50% towards your year mark;

Assignments 03 and 04 are long question assignments. These assignments must NOT be submitted to UNISA for marking but forms an important part of your study material and exam questions will definitely be set on these sections.

Please keep copies of your submitted assignments and if submitted through myUnisa, proof that you

submitted the assignment.

Assignments constitute an integral part of the tutorial matter. Study material on which assignments are based

is given in Annexure A (for students registered for the first semester) or Annexure B (for students registered

for the second semester). Assignments and tutorial letters must also be studied for examination purposes.

6.6 Finality of the due dates

The receipt of assignments after the due date disrupts our marking programme and as the uncontrolled

submission of assignments creates administrative problems. No extension will be granted for the submission

of assignments and regrettably requests for the extension of the due date will NOT be considered.

6.7 Assessment of assignments

Although students may work together when preparing assignments, each student must submit his or her own

individual assignment. It is unacceptable for students to discuss the answers on myUnisa. That is copying (a

form of plagiarism) and you may be penalised or subjected to disciplinary proceedings by the university.

7. EXAMINATIONS

For general information and requirements as far as assignments are concerned, see the brochure My studies

@ Unisa, which you received with your study material.

7.1 Examination admission

For students to fully benefit from our formative tuition and assessment, the Management of the University has

taken a decision to introduce two compulsory assignments in all modules to be submitted by set due dates.

Submission of the first compulsory assignment by its due date will give a student admission to the

examination in the particular module and the mark obtained for that assignment will contribute towards the

FAC1601/101/3/2012

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final mark for that module. The second assignment is also compulsory and contributes equally to the final

mark.

Please ensure that the compulsory assignments reaches the University before the due date as late

submission of assignment 01 will result in you not being admitted to the examination.

7.2 How will this work in practice?

The year mark contribution (that is part of the final mark) is calculated as follows:

50% of the mark obtained for assignment 01

Plus

50% of the mark obtained for assignment 02

If you only submit assignment 01, your year mark will be 50% of the mark obtained for this assignment. This

will then be your year mark out of a possible 100%. If, for example, you obtain 80% for assignment 01 and

0% for assignment 02, your year mark will be 40%. A year mark often causes a student to pass or fail this

module.

According to University policy you require a sub-minimum of 40% in the examination before your year mark is

taken into consideration. In other words, if you do not obtain at least 40% in the examination, you will

automatically fail, and your final mark will be the mark you obtained in the examination.

Students require a final mark of 50% to pass a module. This final mark is calculated as follows:

(10% x of the year mark) + (90% x mark obtained in the examination)

Example:

A B C D

Average of marks for assignment

1 & 2 (Year mark)

Year mark contri-bution to final mark at 10%

Exam mark contribution

required to pass (50% minus year mark

contribution)

Minimum exam mark required to

pass

(C 0,9)

Student 1 100% 10% 40% 45%

Student 2 70% 7% 43% 48%

Student 3 50% 5% 45% 50%

Student 4 30% 3% 47% 52%

Student 5 20% 2% 48% 53%

Student 6 10% 1% 49% 54%

Student 7 0% 0% 50% 56%

If you obtain between 40% and 49% as a final mark, you will be allowed to write a supplementary

examination. The supplementary examination will be written at the end of the next semester. This means

that if you qualify for a supplementary examination in May/June, you will write the FAC1601 paper in

October/November. Similarly, students who qualify for a supplementary examination in October/November will

write this paper in May/June of the following year. A student may, however, write only one supplementary

examination per enrolment.

If, for any reason, you transfer your exam period for FAC1601 to a following semester, you need to submit

Assignment 01 and 02 before the due date in the semester for which you originally registered for the course.

The year mark you obtain will then be carried forward to the next semester because you will not be allowed to

submit any assignments in the semester to which you have changed. By applying to have your semester

changed to a following semester, in effect, you are applying for an aegrotat examination. However, you still

FAC1601/101/3/2012

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need a year mark that will be taken into account as explained above – hence the need to submit the

compulsory assignments in the semester for which you originally registered.

7.3 Examination period

This module is offered in a semester period of 15 weeks. This means that if you are registered for the first

semester, you will write the examination in May/June 2012 and the supplementary examination will be written

in October/November 2012. If you are registered for the second semester, you will write the examination in

October/November 2012 and the supplementary examination will be written in May/June 2013.

During the semester, the Examination Section will provide you with information regarding the examination in general, examination venues, examination dates and examination times. This information can also be abtained from the myUnisa site. Click on Examinations when you are logged into the site.

7.4 Examination paper

At the end of the semester you will be required to write a two hour examination paper. No theoretical or multiple choice questions will be asked. You will only be required to apply the theoretical knowledge acquired in the questions asked. Exam questions are set on the content of the whole course – not only on assignments 1 and 2.

You are advised to consult the examination time-table timeously in order to plan your revision programme

accordingly. Please start early to avoid cramming at the last moment.

7.5 Previous examination paper

The May/June 2011 examination paper will be included in one of the tutorial letters that will be issued for this

module. We advise you, however, not to focus only on this examination paper as your only source in your

preparation for the examination as the content of examination paper changes from year to year. You may,

however, accept that the type of questions that will be asked in the examination will be similar to those asked

in the activities in your study guide and in the assignments.

7.6 Tutorial letter with information on the examination

To help you in your preparation for the examination, you will receive a tutorial letter that will explain the format

of the examination paper and set out what and how to study for examination purposes.

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8. PROPOSED STUDY PROGRAMME FOR 2012

Please note that the "DUE DATE" is the date on which the assignment must reach the Unisa campus in

Pretoria. Therefore, please provide sufficient time for any delays due to distance from Pretoria, if not

submitted via myUnisa.

8.1 First semester

DATE STUDY MATERIAL AND ASSIGNMENTS

± 16/1 to 17/2 Study: Study units 1 to 4

± 18/2 to 20/2 Do Assignment 01 (compulsory assignment): Due date 12/03/2012

± 20/2 Submit Assignment 01 (NB: DO NOT WAIT UNTIL 12/03/2012)


± 13/3 to 19/3 Do and mark Assignment 03 (do not submit this assignment)





The solutions to Assignments 03 and 04 are provided in the same tutorial letter

20/4 to examination Revision

During May/June 2012: EXAMINATION

8.2 Second semester

DATE STUDY MATERIAL AND ASSIGNMENTS



± 6/8± Submit Assignment 01 (NB: DO NOT WAIT UNTIL 20/08/2012)



±28/8 to 30/8 Do Assignment 02 (compulsory assignment): Due date 10/09/2012


±1/9 to 21/9 Study: Study units 8 to 10

±22/9 to 25/9 Do Assignment 04 (do not submit this assignment)

The solutions to Assignments 03 and 04 are provided in the same tutorial letter

26/9 to examination Revision

During October/November 2012: EXAMINATION

We hope that you will enjoy this module and we wish you success with your studies.

Kind regards

Mr M Hlongoane

Mrs FM Osman

Mr A Eysele

Mr J van Staden

Mr RN Ngcobo

Mrs B Ceki

LECTURERS: FINANCIAL ACCOUNTING REPORTING 1 - MODULE 2 (FAC1601)

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APPENDIX A: FIRST SEMESTER COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (FIRST SEMESTER 2012)

UNIQUE NO: 819940

DUE DATE: 12 MARCH 2012

NB: 1. This assignment must be answered on a mark-reading sheet if submitted by post or can be

submitted electronically via myUnisa.

2. Before answering this assignment, please read paragraphs 6 and 7 of this tutorial letter.

(FAC1601/101/3/2012)

3. This assignment covers study units 1 – 4 of the study guide.

4. We cannot grant any extension for the late submission of this assignment since the due date was set by the management of the university. No correspondence or telephone conversations will be conducted in this regard.

5. Important aspects regarding multiple-choice assignments answered on a mark-reading sheet

For detailed information and requirements as far as assignments are concerned, see My studies @ Unisa which you received with your study package.

Work carefully through the relevant tutorial matter before you do the assignment.

Calculate your answer on a separate piece of paper before completing the mark-reading sheet.

REMEMBER:

There is only one correct answer for each question. Do not make more than one mark per question.

All questions are equal in value.

Indicate your student number correctly.

Indicate the assignment number correctly.

Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 – first semester.

FOR HARD COPY SUBMISSION:

Only the provided mark-reading sheets may be used.

Colour in the correct block clearly with a HB pencil.

Do not colour outside the block, or colour in the block with a pen.

Do not make corrections with correction fluid.

Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with sticky tape – use another one.

Do not staple the mark-reading sheet to another piece of paper.

Do not submit answers on a written sheet of paper.

Send only your mark-reading sheet to the Assignments Division in the appropriate envelope.

FAC1601/101/3/2012

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ASSIGNMENT 01 – FIRST SEMESTER (continued)

QUESTION 1

COB Retailer‟s trade is seasonal. The monthly sales of the business are 50% higher in November, December

and January, than in the other nine months of the year. The business earns a gross profit of 25% on turnover

in the mentioned three months and 20% during the remaining nine months. If the total sales for the year

ended 28 February 2012 were R283 500, the cost of sales for the same period was:

1. R212 625

2. R222 075

3. R223 256

4. R226 800

Given information for questions 2 to 4:

Reid and Wright are in partnership trading as R&W Trading Centre. The following information relates to the

partnership:

Balances as at 28 February 2012

R

Capital: Reid ............................................................................................................................. 600 000

Capital: Wright .......................................................................................................................... 600 000

Current account: Reid (Dr) ........................................................................................................ 35 000

Current account: Wright (Cr) ..................................................................................................... 50 000

Drawings: Reid ......................................................................................................................... 156 000

Drawings: Wright ...................................................................................................................... 160 400

Mortgage .................................................................................................................................. 650 000

Inventory (1 March 2011) .......................................................................................................... 43 000

Debtors control ......................................................................................................................... 150 000

Creditors control ....................................................................................................................... 65 000

Purchases ................................................................................................................................ 741 000

Purchases returns ..................................................................................................................... 4 100

Settlement discount granted ...................................................................................................... 3 715

Freight on sales ........................................................................................................................ 12 300

Interest on mortgage loan ......................................................................................................... 43 875

Sales returns ............................................................................................................................ 2 300

Insurance expense.................................................................................................................... 48 160

Settlement discount received .................................................................................................... 1 000

Allowance for credit losses ........................................................................................................ 1 900

Forfeited settlement discount received ...................................................................................... 200

Gross profit ............................................................................................................................... 420 100

Bank ......................................................................................................................................... 112 050

Additional information:

Abstract from terms of the partnership agreement:

1. Interest on capital will be calculated at a rate of 5% per annum on the opening balances of the capital accounts and at a rate of 8% per annum on the opening balances of the current accounts.

2. Interest will be charged at a rate of 5% per annum on the balance of the drawings accounts at the end of

each month. The interest must be capitalised against the current accounts of the partners.

FAC1601/101/3/2012

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Year-end adjustments:

1. On 28 February 2012 the inventory on hand amounted to R65 000.

2. An outstanding debt of R3 000 is irrecoverable and must be written off. A debt of R1 800 written off

during the year has been recovered and the payment is expected to be received on 1 March 2012.

3. The allowance for credit losses must be adjusted to R1 500.

4. R&W Trading Centre were offered a discount of 10% on an amount of R9 500 owing to a supplier

provided the supplier is paid before 28 February 2012. R&W Trading Centre intends taking the advantage

of the discount offered.

5. The terms of the mortgage loan provide for interest on the loan to be calculated at a rate of 9% per annum

on the outstanding amount of the loan at the end of the financial year.

QUESTION 2

Which one of the following alternatives represents the correct amount that must be disclosed as revenue in

the statement of comprehensive income of R&W Trading Centre for the year ended 28 February 2012?

1. R1 135 550

2. R1 134 200

3. R1 133 250

4. R1 135 800

QUESTION 3

Which one of the following alternatives represents the correct amount that must be disclosed as credit losses

in the statement of comprehensive income of R&W Trading Centre for the year ended 28 February 2012?

1. R2 600

2. R2 700

3. R3 400

4. R4 400

QUESTION 4

Which one of the following alternatives represents the correct amount that must be disclosed as total equity in

the statement of financial position of R&W Trading Centre as at 28 February 2012?

1. R1 211 765

2. R1 181 320

3. R1 197 140

4. R1 232 140

FAC1601/101/3/2012

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Wright and Judge were in a partnership, trading as W&J Attorneys at Law, and they shared profits/losses in the ratio of 3:2 respectively. They agreed to admit Jury as a partner with effect from 1 February 2012. It was decided that Jury must contribute R110 000 in cash on 1 February 2012 for a 20% share in the fair value of the new partnership. Wright and Judge relinquished the 20% share to Jury according to the ratio of 1:2 respectively.

The following trial balance relates to the partnership prior to any valuation adjustments:

W&J ATTORNEYS AT LAW

TRIAL BALANCE AT 31 JANUARY 2012

R

Capital: Wright .......................................................................................................................... 245 000

Capital: Judge ........................................................................................................................... 222 500

Asset replacement reserve........................................................................................................ 20 000

Furniture & Equipment .............................................................................................................. 105 000

Vehicles .................................................................................................................................... 315 000

Fees receivable ........................................................................................................................ 82 500

Creditors control ....................................................................................................................... 15 000

In preparation of the change in the ownership structure of the existing partnership, the following fair values

regarding the assets thereof were obtained:

Furniture and equipment, R167 500;

Vehicles, R304 500;

Fees receivable, R77 250;

Goodwill, R10 000.

QUESTION 5

Which one of the following alternatives represents the correct amounts to be closed-off from the valuation

account to the partners‟ capital accounts?

1. Capital: Wright – R40 050; Capital: Judge – R26 700




QUESTION 6

Which one of the following alternatives represents the profit-sharing ratio of Wright, Judge and Jury?

1. 3 : 2 : 2, respectively




FAC1601/101/3/2012

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QUESTION 7

Othello, Macbeth and Romeo were in a partnership trading as OMR Partners and sharing profits/losses in the

ratio of 5:3:2 respectively. Macbeth decided to retire from the partnership on 31 December 2011, the end of

the financial year. The partners agreed that the capital balance of Macbeth will be settled in cash on

31 December 2011.

The following is a preliminary statement of financial position of the partnership:

OMR PATRNERS

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

R

ASSETS

Non-current assets 1 000 000

Property, plant and equipment (Land and buildings) 1 000 000

Current assets 102 600

Inventories 27 500

Trade receivables 45 100

Cash and cash equivalents 30 000

1 102 600

EQUITY AND LIABILITIES

Total equity 732 600

Capital (Othello R221 400; Macbeth R147 600; Romeo R73 800) 442 800

Current accounts (Othello R68 000; Macbeth R59 500(Dr); Romeo R31 300) 39 800

Other components of equity (Asset replacement reserve) 250 000

Total liabilities 370 000

Non-current liabilities 350 000

Long-term borrowings 350 000

Current liabilities 20 000

Trade and other payables 20 000

1 102 600


In preparation of the retirement of Macbeth, the following valuations/decisions were made:

1. Inventory, R30 000;

2. An allowance for credit losses to the amount of R5 000 must be created.

Which one of the following alternatives represents the correct amount that must be paid by OMR Partners to

Macbeth on 31 December 2011?

1. R163 100

2. R162 350

3. R163 850

4. R281 350

FAC1601/101/3/2012

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Given information for questions 8 and 9:

Mudd, Waters and Soeurs are partners in a firm of medical practitioners, trading as Rea Medicals, and they

share profits and losses in the ratio of 5:2:1 respectively. They have considered to liquidate the partnership

for quite some time, and received various offers for the land and buildings as well as for the furniture and

equipment. Since they have decided to accept the most favourable of these offers, they planned to liquidate

the partnership simultaneously on 1 July 2011. Before the liquidation entries were made, the trial balance of

the partnership was prepared as follows:

REA MEDICALS

TRIAL BALANCE AT 1 JULY 2011

Debit Credit

R R

Capital - Mudd .................................................................................................

Capital – Waters ..............................................................................................

Capital – Soeurs ..............................................................................................

Current account - Mudd ...................................................................................

Current account – Waters ................................................................................

Current account – Soeurs ................................................................................

Long-term loan at Kwasa-Kwasa Bank .............................................................

Creditors control ..............................................................................................

Land and buildings at cost................................................................................

Furniture and equipment at cost .......................................................................

Accumulated depreciation: Furniture and equipment ........................................

Bank ................................................................................................................

30 000

10 000

800 000

290 000

25 000

450 000

250 000

140 000

20 000

180 000

60 000

55 000

1 155 000 1 155 000

On 1 July 2011 the following transactions with regard to the liquidation took place:

The land and buildings were sold for cash, R800 000; property registration and transfer costs amounting to

R35 000 were paid by the Rea Medicals. Furniture and equipment with a carrying amount of R50 000 was

taken over (not paid for immediately) by Waters at an agreed amount of R45 000, and the remaining furniture

and equipment was sold at a profit of R25 000, cash. A discount of R5 000 was received on full settlement of

the creditors accounts. The long-term loan at Kwasa-Kwasa Bank was settled in full and the bank levied an

early settlement penalty of R2 500. The liquidation costs amounted to R22 500, and were paid.

QUESTION 8

Which one of the following alternatives indicate the correct amount of profit/loss made on the liquidation of

Rea Medicals.

1. R57 500 profit

2. R52 500 profit

3. R55 000 profit

4. The partnership broke even.

FAC1601/101/3/2012

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QUESTION 9

Which one of the following alternatives indicates the correct balances of the partners‟ capital accounts after

the liquidation entries were made, but prior to the settlement of the balances on the capital accounts?

1. Mudd, R420 000 (credit); Waters, R225 000 (credit); and Soeurs, R130 000 (credit)




QUESTION 10

Annette, Chris and Rebecca are in a partnership, sharing in profits and losses in a ratio of 5:3:2, respectively.

They decided to liquidate the partnership by disposing of the assets piecemeal. No discount will be received

when liabilities are settled. At the starting date of the liquidation, the following list of balances was drawn up

from the accounts in the general ledger of the partnership:

Capital - Annette (credit) .............................................................................................................

Capital - Chris (credit) .................................................................................................................

Capital - Rebecca (credit)............................................................................................................

Current account - Annette (debit) ................................................................................................

Current account - Chris (credit) ...................................................................................................

Current account - Rebecca (debit)...............................................................................................

Goodwill......................................................................................................................................

Asset replacement reserve..........................................................................................................

Long-term loan, unsecured .........................................................................................................

Creditors control .........................................................................................................................

Furniture and equipment at cost ..................................................................................................

Accumulated depreciation: Furniture and equipment ...................................................................

Inventories ..................................................................................................................................

Debtors control ...........................................................................................................................

Bank – favorable .........................................................................................................................

R

60 000

33 000

20 000

8 000

4 200

3 500

20 000

15 000

62 100

8 600

77 000

7 800

49 000

7 500

42 700

The partners decided to distribute the cash amongst them as it becomes available in such a manner that it

would not be necessary for the partners to repay any of the interim cash repayments at a later stage due to

capital deficits that arose.

At the first realisation of the assets, all of the inventories were sold for R45 000, cash.

Indicate the option that correctly shows the amounts payable to the partners in respect of the first interim

repayment. Apply the loss-absorption-capacity method in your calculation.

1. Annette, R6 875; Chris, R10 125 and Rebecca, R0

2. Annette, R8 500; Chris, R5 100 and Rebecca, R3 400



FAC1601/101/3/2012

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APPENDIX B: FIRST SEMESTER COMPULSORY ASSIGNMENT

ASSIGNMENT 02: (FIRST SEMESTER 2012)

UNIQUE NO: 684475

DUE DATE: 9 APRIL 2012




(FAC1601/101/3/2012)







REMEMBER:















FAC1601/101/3/2012

20


QUESTION 1

Consider the following statements:

(a) A member‟s interest usually represents a member‟s right to share in a certain percentage of the profit(s)/losses of the close corporation.

(b) The interest of any member in a close corporation must be a single interest which is expressed as a percentage of the total membership of the close corporation.

(c) Not every member of a close corporation stands in a fiduciary relationship to the close corporation.

(d) The members of a close corporation, having more than one member, may at any time enter into a written association agreement.

(e) A close corporation must specify the date on which its financial year will end in its founding statement.

Which one of the following alternatives represents the incorrect statement(s)?

1. All of the above 2. (c) 3. (a) and (b) 4. (a), (b), (d) and (e)

QUESTION 2

Claus and Fred are the only two members of Financebox CC. The following information is extracted from the

accounting records of the CC on 31 December 2011, the financial year-end:

Debit Credit

R R

Member‟s contribution: Claus 56 000

Member‟s contribution: Fred 56 000

Loan to member: Claus 25 000

Loan from member: Fred 40 000

Long-term loan: Virtual Bank 75 000

The following must still be taken into account:

1. Interest must be calculated at 10% per annum on the loan to the member, and must be capitalised. The

loan of R10 000 was granted to Claus on 1 July 2011 and is immediately callable.

2. The interest on the loan from Fred must be calculated at 9% per annum, and is payable annually on

31 December. On 1 January 2011, Fred advance a loan amounting to R25 000 to the corporation. An

additional amount of R15 000 was borrowed from Fred on 1 November 2011. Fred agreed to receive the

interest for the 2011 financial year in cash on 1 January 2012.

3. The long-term loan from Virtual Bank was received on 1 July 2010 and bears an interest at a rate of 12%

per annum. In terms of the loan agreement, the interest is payable in cash annually on 30 June.

FAC1601/101/3/2012

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QUESTION 2

Which one of the following amounts must be disclosed as finance costs in the statement of comprehensive

income for the year ended 31 December 2011 of Financebox CC?

1. R11 475

2. R 5 625

3. R 9 000

4. R 2 250

QUESTION 3

Joel, Jazz and John are the only three members of the close corporation, Jazz Studio‟s CC. They have an

equal interest in the profit(s)/loss(es) of the close corporation. The financial year-end of the CC is

28 February. On 1 March 2011 the balances of the member‟s contribution accounts were R50 000 each.

During the financial year ended 28 February 2012 the following transactions were, amongst others, recorded

in the books of the CC:

On December 2011, Joel made an additional member‟s contribution of two brand new computers,

worth R15 500 each.

An amount of R18 000 was transferred from the retained earnings to an asset replacement reserve.

The members decided that for the 2012 financial year, a profit distribution of R120 000 be made to

members according to their member‟s interest in the CC. The profit distribution was not paid out in

cash, but recorded as loans to the CC.

On 28 February 2012, John made an additional member‟s contribution to the CC of R15 000 in cash.

Which one of the following alternatives reflects the correct balances on the member‟s contribution accounts of Jazz Studio‟s CC as at 28 February 2012?

1. Joel: R47 500; Jazz: R50 000; John: R50 000 2. Joel: R52 500; Jazz: R56 000; John: R71 000 3. Joel: R87 000; Jazz: R71 000; John: R65 000 4. Joel: R81 000; Jazz: R50 000; John: R65 000

QUESTION 4

The following information appeared in the accounting records of Ndaba CC on 28 February 2012, the end of

the financial year:

Retained earnings: 28 February 2012

R

105 500

Retained earnings: 1 March 2011

Transfer to asset replacement reserve at the end of the financial year

15 630

50 000

Profit distribution paid to members during the financial year 30 000

Income tax paid for the current financial year 31 120

FAC1601/101/3/2012

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1. The final tax assessment was received on 5 March 2012 and a balance of R37 790 was still outstanding

for the year ended 28 February 2012.

2. On 28 February 2012 the members agreed that an additional profit distribution of R45 000 will be paid to

members on 15 March 2012.

Which one of the following alternatives shows the correct amount of the profit before tax to be disclosed in the

statement of comprehensive income for the year ended 28 February 2012 of Ndaba CC?

1. R238 780

2. R245 990

3. R283 780

4. R200 990


Bob and Marley are the only members of BobMarley CC and have an interest in the corporation of 70% and

30% respectively. The following information was taken from the records of the close corporation on

30 June 2012, the end of the financial year:

R

Profit before tax 380 955

Interim profit distribution 55 000

Member‟s contribution: Bob 524 000

Member‟s contribution: Marley 224 571

Loan from member: Bob (1 July 2011) 55 000

Loan from member: Marley (1 July 2011) 40 000

Retained earnings: (1 July 2011) 565 205


1. The actual normal income tax in respect of the financial year amounted to R106 667 and must still be

recorded.

2. The members decided that an additional R85 000 of the total comprehensive income for the year ended

30 June 2012 would be distributed to them according to their interest in the corporation. This additional

amount was not to be paid out in cash, but was to be left in the close corporation as loans from the

members.

3. Half of the closing balances on the loans from the members at 30 June 2012 must be repaid on

30 November 2012.

4. Interest is payable at 9% per annum on the opening balances of the loans from the members on 1 July

each year and is not capitalised. The interest was paid on the due date.

5. The members had made further capital contributions of R30 000 each during the year.

FAC1601/101/3/2012

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QUESTION 5

Which one of the following alternatives represents the correct retained earnings for BobMarley CC at

30 June 2012?

1. R946 160

2. R784 493

3. R691 843

4. R699 493

QUESTION 6

Which one of the following alternatives represents the correct amount in respect of the loans from members to

be included under the non-current liabilities in the statement of financial position as at 30 June 2012 of

BobMarley CC?

1. R 85 000

2. R 90 000

3. R 98 550

4. R180 000


Swallows Ltd was registered on 1 March 2007 with an authorised share capital of 50 000 ordinary shares and

25 000 8% preference shares. On 15 March 2007 the company issued 10 000 ordinary shares, at R10 per

share and 5 000 8% preference shares at R5 to the founders of the company. On 1 July 2007, Swallows Ltd

issued 15 000 ordinary shares at R12 per share and 10 000 8% preference shares at R8 per share to the

public.

In order to expand the business, the board of directors decided on 15 December 2010 to offer the total of the

unissued ordinary shares to the public at the current trading price of R15 per share. The full offering was

taken by the public and shares allotted on 31 January 2011. On 28 February 2012 declared a dividend of

R0,50 per share on ordinary shares.

QUESTION 7

Which one of the following alternatives represents the balance of the ordinary share capital in the general

ledger of Swallows Ltd on 28 February 2012?

1. R675 000

2. R780 000

3. R500 000

4. R860 000

FAC1601/101/3/2012

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QUESTION 8

Which one of the following alternatives represents the correct amount of dividends payable on

28 February 2012?

1. R25 000

2. R33 400

3. R32 500

4. R37 500


The following information pertains to Guluva CC:

GULUVA CC

STAMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2012

2012 2011 ASSETS R R Non-current assets 54 000 50 000 Property, plant and equipment 54 000 50 000 Current assets 38 400 36 000 Inventories 12 000 10 200 Trade receivables 10 000 10 400 Prepayments (Insurance) 400 - Other financial assets 12 000 14 000 Cash and cash equivalents 4 000 1 400

Total assets 92 400 86 000

EQUITY AND LIABILITIES Total equity 77 054 69 800 Members‟ contributions 52 000 47 200 Retained earnings 25 054 22 600 Total liabilities 15 346 16 200 Non-current liabilities 5 200 4 200 Long-term borrowings 5 200 4 200 Current liabilities 10 146 12 000 Trade payables 8 000 10 000 Current tax payable 2 146 2 000

Total equity and liabilities 92 400 86 000

FAC1601/101/3/2012

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GULUVA CC

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2012

R Revenue 262 000 Cost of sales (130 000) Gross profit 132 000 Other income 6 600 138 600 Distribution, administrative and other expenses (30 800) Depreciation 2 000 Credit losses 4 500 Insurance expenses 2 600 Water and electricity 1 250 Salaries and wages 20 450 Finance costs (400) Interest on long-term loan 400 Profit before tax 107 400 Income tax expense (2 146) Profit for the year 105 254 Other comprehensive income for the year – Total comprehensive income for the year 105 254


1. All sales and purchases are on credit. 2. The balance of the allowance for credit losses amounted to R2 000 and R1 800 for the financial year

ending 2010 and 2011 respectively.

3. An interim profit distribution of R2 800 was paid during the year.

4. Guluva CC uses the direct method to prepare their statement of cash flows.

QUESTION 9

Which one of the following alternatives represents the amount that must be disclosed as cash paid to

suppliers and employees in the statement of cash flows of Guluva CC at 28 February 2012?

1. R154 650

2. R154 250

3. R155 050

4. R158 450

QUESTION 10

Which one of the following alternatives represents the amount that must be disclosed as cash generated from

operations in the statement of cash flows of Guluva CC at 28 February 2012?

1. R 99 250

2. R 99 450

3. R107 750

4. R108 150

FAC1601/101/3/2012

26

APPENDIX C: SECOND SEMESTER COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (SECOND SEMESTER 2012)

UNIQUE NO: 845193

DUE DATE: 20 AUGUST 2012




(FAC1601/101/3/2012)







REMEMBER:















FAC1601/101/3/2012

27

ASSIGNMENT 01 – SECOND SEMESTER (continued)


Tumi and Melinda are in a partnership, trading as T&M Dealers. The following information was extracted from

the accounting records of the partnership:

Extract of balances of T&M Dealers as at 30 June 2012, the end of the financial year:

R

Capital: Tumi .............................................................................................................................. 324 000

Capital: Melinda .......................................................................................................................... 216 000

Current account: Tumi (Dr) .......................................................................................................... 5 000

Current account: Melinda (Cr) ..................................................................................................... 15 000

Land and buildings at cost........................................................................................................... 450 000

Vehicles at cost........................................................................................................................... 210 000

Furniture and fittings at cost ........................................................................................................ 57 600

Accumulated depreciation: Vehicles ............................................................................................ 35 025

Accumulated depreciation: Furniture and fittings ......................................................................... 11 675

Sales .......................................................................................................................................... 820 000

Inventory ..................................................................................................................................... 31 000

Cost of sales ............................................................................................................................... 422 000

Debtors control ........................................................................................................................... 25 000

Creditors control ......................................................................................................................... 13 000

Drawings: Tumi ........................................................................................................................... 11 500

Drawings: Melinda ...................................................................................................................... 4 000

Carriage on sales ........................................................................................................................ 2 200

Salaries and wages..................................................................................................................... 220 100

Credit losses recovered .............................................................................................................. 1 500

Allowance for settlement discount granted .................................................................................. 4 000

Settlement discount granted ........................................................................................................ 1 800


Terms of the partnership agreement:

Each partner is entitled to a salary of R3 000 per month.

Tumi is to get a bonus of 10% of the total comprehensive income after the allocation of salaries to partners.

Year-end adjustment: 1. During the year each partner received R25 000 as a salary and the amounts are included in the salaries

and wages figure above.

2. During the year goods were shipped to an overseas customer and an invoice for an amount of R2 300 from the shipping company was received on 2 July 2012.

3. Furniture costing R5 000 was purchased on credit. This transaction was recorded as credit purchases

in the books of the partnership. The entry is still yet to be rectified.

4. On 30 June 2012 a debtor owing T&M Dealers R2 500 was declared insolvent and his account must be

written off as irrecoverable. After this incident T&M Dealers decided to create an allowance for credit losses amounting to R3 000.

FAC1601/101/3/2012

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FAC1601/101/3/2012

29


QUESTION 1

Which one of the following alternatives represents the correct total comprehensive income of T&M Dealers for the year ended 30 June 2012?

1. R223 000 2. R272 600 3. R222 600 4. R224 900

QUESTION 2

Which one of the following alternatives represents the correct balance of the current account of Tumi on 30 June 2012?

1. R 77 550 2. R 78 595 3. R 90 884 4. R104 830

QUESTION 3

Which one of the following alternatives represents the correct amount of the total assets as at 30 June 2012?

1. R722 400 2. R718 400 3. R738 100 4. R729 400

QUESTION 4

Which one of the following alternatives represents the total equity of T&M Dealers as at 30 June 2012?

1. R707 500 2. R757 100 3. R707 100 4. R709 400

QUESTION 5 Adam and Bono are in a partnership, trading as U1 Traders. They decided to admit Larry to the partnership. The new partnership will trade as U2 Traders. It was agreed that Larry will contribute R225 000 in cash as well as equipment which he purchased at cost of R30 000 currently valued at R20 000. Larry will also join the partnership with a unique accounting and auditing background as he is a qualified chartered accountant. Larry has paid R4 200 towards the subscription fees to The South African Institute of Chartered Accountants. Larry‟s accounting and auditing background will be used immensely by the partnership. Larry will attain a 20% interest in the fair value of the net assets of U2 Traders. The sum of the equity that Adam and Bono will contribute to U2 Traders is R800 000. It was decided that Adam, Bono and Larry will share in the profits/losses of U2 Traders in the ratio of 2:1:1 respectively.

Which one of the following alternatives represents the correct amount goodwill acquired in U2 Traders?

1. R236 800 2. R220 000 3. R196 800 4. R180 000

FAC1601/101/3/2012

30


QUESTION 6

Michael and Tom are in a partnership, trading as MT Mechanics, and they share profits/losses of the partnership in the ratio of 3:2. For the purpose of admitting Nathan to the partnership on 1 June 2012, goodwill to the amount of R80 000 was created. The land and buildings, with a carrying amount of R450 000, were valued at a fair value of R1 500 000. The equipment, with a carrying amount of R90 000, was valued at a fair value of R67 500. Michael, Tom and Nathan will share in the profits/losses of the new partnership, which will trade as MTN Mechanics, in the ratio of 3:2:1 respectively.

Which one of the following alternatives represents the correct amount that must be transferred from the valuation account to the partners‟ capital accounts in the general ledger of MT Mechanics?

1. Capital: Michael R664 500; Capital: Tom R443 000 2. Capital: Michael R616 500; Capital: Tom R411 000 3. Capital: Michael R988 500; Capital: Tom R659 000 4. Capital: Michael R568 500; Capital: Tom R379 000

QUESTION 7

John, Shoes and Mosheu are in a partnership trading as The Amazulu Café. The partners share profits or losses in the ratio of 1:1:1 respectively. Shoes decided to quit the partnership on 31 July 2012. John and Mosheu decided to continue with the business activities of the partnership and as a result a new partnership was formed. They agreed to take over Shoes‟ profit share in the ratio of 3:1.

Which one of the following alternatives represents the correct new profit sharing ratio of the new partnership?

1. 1 : 1 2. 2 : 1 3. 3 : 1 4. 7 : 5


Sphindile and Amanda are in a partnership, selling paint and hardware and trading as S&A Paintware; they share in the profits/losses of the partnership in the ratio of 3:2 respectively. Due to a steady decline in their profits and customers, they decided to liquidate the partnership simultaneously on 1 June 2012.

On 31 May 2012 the following trial balance was prepared:

Debit Credit

R R Land and buildings at cost........................................................................................................... 240 000 Equipment at cost ....................................................................................................................... 122 400 Furniture and fittings at cost ........................................................................................................ 150 600 Accumulated depreciation: Equipment ........................................................................................ 24 000 Accumulated depreciation: Furniture and fittings ......................................................................... 15 000 Inventory ..................................................................................................................................... 54 000 Debtors control ........................................................................................................................... 92 000 Bank ........................................................................................................................................... 4 000 Capital: Sphindile ........................................................................................................................ 150 000 Capital: Amanda ......................................................................................................................... 100 000 Current account: Sphindile .......................................................................................................... 5 000 Current account: Amanda ........................................................................................................... 13 000 Mortgage .................................................................................................................................... 200 000 Creditors control ......................................................................................................................... 166 000

653 000 653 000

FAC1601/101/3/2012

31



On 2 June 2012 the following transactions took place:

1. The land and buildings were sold for R450 500 cash.

2. A stock take conducted on 31 May 2012 revealed that an inventory with a cost price of R5 500 was pilfered from the storeroom. The partners agreed to donate the remaining inventory to a local old age home.

3. A laptop with a carrying amount of R7 000 was taken over by Sphindile at a mutually agreed upon amount of R6 000. The remaining equipment was sold at a loss of R2 100 cash.

4. Except for one insolvent debtor, whose debt was R2 000, all the debtors settled their accounts and received a discount of 5% on their outstanding balances.

5. The mortgage loan was settled in full.

6. The creditors accounts were paid in full and a settlement discount of 10% was received.

QUESTION 8

Which one of the following alternatives indicates the correct amount of profit/loss that must be transferred to partner‟s capital accounts?

1. Sphindile, R49 140; Amanda, R32 760 2. Sphindile, R31 560; Amanda, R21 040 3. Sphindile, R17 340; Amanda, R11 560 4. Sphindile, R16 740; Amanda, R11 160

QUESTION 9

Which one of the following alternatives indicates the correct final settlement of Sphindile‟s capital account?

1. R188 140 2. R169 560 3. R156 340 4. R155 740

FAC1601/101/3/2012

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QUESTION 10

Cook, Books and Hyde were in a partnership which traded as The Accountants and they shared in the profits and losses of the partnership in the ratio of 1:2:1 respectively. They decided to liquidate the partnership piecemeal as from 30 June 2012.

The following information pertains to the partnership:

THE ACCOUNTANTS BALANCES AS AT 30 JUNE 2012

Capital: Cook .............................................................................................................................. Capital: Books ............................................................................................................................ Capital: Hyde .............................................................................................................................. Asset replacement reserve.......................................................................................................... Drawings: Cook .......................................................................................................................... Drawings: Books ......................................................................................................................... Drawings: Hyde .......................................................................................................................... Creditors control ......................................................................................................................... Equipment at cost ....................................................................................................................... Accumulated depreciation: Equipment ........................................................................................ Goodwill...................................................................................................................................... Debtors control (trade debtors) .................................................................................................... Inventory ..................................................................................................................................... Allowance for credit losses ..........................................................................................................

R 15 000 25 000 15 000 25 000 6 000 3 500 5 500

18 000 20 000 12 000 30 000 26 000 24 000 5 000

The partners decided that Books can take over the equipment on 2 July 2012 at its carrying amount. As soon as sufficient cash becomes available, interim repayments must be made to the partners in such a manner that no partner will have to make any repayments thereof to the partnership.

The inventory and trade debtors were realised as follows:

Date Carrying amount Cash proceeds 30 June 2012 R24 000 (Inventory) R22 000 15 July 2012 R26 000 (Debtors control) R23 000

Which alternative shows the correct amounts that must be repaid to the partners as interim repayments on 2 July 2012?

1. Cook: R1 750; Books: R7 500; Hyde: R2 250 2. Cook: R0; Books: R3 500; Hyde: R 500 3. Cook: R1 750; Books: R0; Hyde: R2 250 4. Cook: R2 250; Books: R500; Hyde: R2 750

FAC1601/101/3/2012

33

APPENDIX D: SECOND SEMESTER COMPULSORY ASSIGNMENT

ASSIGNMENT 02: (SECOND SEMESTER 2012)

UNIQUE NO: 732044

DUE DATE: 10 SEPTEMBER 2012




(FAC1601/101/3/2012)







REMEMBER:




Indicate the assignment number correctly. Indicate the unique assignment number for Assignment 01 correctly. Every assignment which is

marked by the computer is given a unique number. The number contains information on the course code and the assignment number. When the computer reads the unique number, it classifies it as Assignment 01 for FAC1601 – first semester.










FAC1601/101/3/2012

34


QUESTION 1

Medsave Practitioners CC has three doctors as members, namely Dr. Nose, Dr. Wildmouth and Dr. Kissinger. On 1 March 2011 the CC borrowed R550 000 from Dr. Kissinger. The interest rate on the loan is 9% per annum and this amount is payable by making two equal payments per financial year, on the 31 August and 28 February. The loan is repayable by making 10 equal annual repayments on 28 February of each year. The first repayment on the loan must be made on the 28 February 2012. On 28 February 2012 distributions of R20 000 to each member were recorded. These distributions are also payable on 28 February 2012. Which one of the following alternatives represents:

The correct interest expense in respect of the loan from Dr. Kissinger that must be disclosed in the statement of comprehensive income of Medsave Practitioners CC for the year ended 28 February 2012; and what is

The correct total amount that must be repaid by the CC to Dr. Kissinger on 28 February 2012? 1. Interest expense: R24 750, Total amount payable: R 75 000 2. Interest expense: R24 750, Total amount payable: R 90 750 3. Interest expense: R49 500, Total amount payable: R 99 750 4. Interest expense: R49 500, Total amount payable: R124 500

Given information for questions 2 to 4: J Kawasaki and R Yamaha are the only members of RiverRafting CC. As members they each hold 30% and 70% interest in the close corporation respectively. You have recently been appointed as the accounting officer of the close corporation and first task is to calculate certain amounts that must be disclosed in the financial statements of the corporation. The following information is presented to you by the bookkeeper on 30 June 2012, the financial year-end of the close corporation: Extract from the list of balances as at 30 June 2012:

R Member‟s contributions: J Kawasaki ........................................................................................... 35 000 Member‟s contributions: R Yamaha ............................................................................................. 15 000 Loan from member: J Kawasaki .................................................................................................. 120 000 Loan to member: R Yamaha ....................................................................................................... 120 000 Interim profit distribution .............................................................................................................. 10 000 Retained earnings (1 July 2011) .................................................................................................. 135 200


During the financial year ended 30 June 2012 the following events took place, and correctly accounted for in the accounting records of RiverRafting CC:

1. R Yamaha experienced financial difficulties and decided to borrow an additional R45 000 from the corporation. The loan was advanced to her on 1 November 2011 at an interest at a rate of 9% per annum. The loan is unsecured and immediately callable.

2. On 31 December 2011, R Yamaha received a windfall of R15 000 from his previous employer and used the amount to partly settle her loan with the corporation.

3. On 28 February 2012 J Kawasaki made an additional members‟ contribution of R10 000 in cash.

4. On 30 June 2012 the members of the corporation decided that an additional amount of R65 000 of the total comprehensive income for the year must be transferred to asset replacement reserve.

FAC1601/101/3/2012

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5. The loan to R Yamaha bears interest at a rate of 9% per annum which is capitalised at each financial year-end of the CC.

6. For the financial year ended 28 February 2012, the profit before tax of RiverRafting CC amounted to

R350 500, and the actual normal income tax of the CC amounted to R98 140.

QUESTION 2 Which one of the following alternatives represents the correct amount that must be disclosed as interest income under the section other income in the statement of comprehensive income of RiverRafting CC for the year ended 28 February 2012?

1. R 7 425 2. R 8 775 3. R 9 450 4. R10 125 QUESTION 3

Which one of the following alternatives represents the correct amount that must be disclosed as the total balance at 1 July 2011 in the statement of changes in net investment of members of RiverRafting CC?

1. R205 200 2. R215 200 3. R235 200 4. R245 200 QUESTION 4 Which one of the following alternatives represents the correct amount that must be disclosed as the retained earnings at 30 June 2012 in the statement of changes in net investment of members of RiverRafting CC? 1. R312 060 2. R319 485 3. R321 510 4. R322 060


On 1 January 2011 Led Limited was registered with the following authorised share capital:

1 000 000 ordinary shares

500 000 10% preference shares

After an initial issue of shares to the founders of the company and the public in February 2011 at R2 each, Led Limited offered a further 200 000 ordinary shares during January 2012 to the public at R2,50 per share. This offer was underwritten by Light Underwriters for a commission of 5%.

Led Limited also offered 200 000 10% preference shares during January 2012 to the public at R3,00 each. This offer was not underwritten.

The application closed on 31 January 2012. The public took up 160 000 ordinary shares and 200 000 preference shares. The full offering of the ordinary and preference shares was allotted on 6 February 2012.

FAC1601/101/3/2012

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QUESTION 5

Which one of the following alternatives represents the amount that Led Limited had to pay Light Underwriters commission on the underwriting of the shares?

1. R20 000 2. R25 000 3. R16 000 4. R35 000 QUESTION 6

Which one of the following alternatives represents the correct amount that must be debited in the bank account of Led Limited on 31 January 2012?

1. R 920 000 2. R1 000 000 3. R1 020 000 4. R1 100 000 QUESTION 7 RecMer Limited is an incorporated company with an authorised share capital of 450 000 ordinary shares. The company has an issued share capital amounting to R300 000 consisting of shares previously issued at R1,50 per share. It also has retained earnings amounting to R270 000. At a meeting of the board of directors it was decided to issue a capitalisation shares in the ratio of two capitalisation share for every five ordinary shares already held on 1 July 2012. Which one of the following alternatives represents the correct recording of the capitalisation shares in the general journal of RecMer Limited?

1. Debit Credit

Retained earnings Ordinary share capital Capitalisation of issue of ordinary shares held

R 270 000

R

270 000

2. Debit Credit


R 135 000

R

135 000

3. Debit Credit


R 120 000

R

120 000

4. Debit Credit


R 90 000

R

90 000

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Given information for questions 8, 9 & 10:

The following information pertains to Ridgewood CC:

1. Balances of the statement of financial position as at 29 February 2012:

2012 2011

R R Land and buildings at cost 665 000 450 500 Machinery at cost 427 720 349 700 Investment at cost 118 000 - Loans to members 35 000 49 500 Inventory 34 260 20 320 Debtors control 63 136 62 500 Prepaid water and electricity - 10 400 Accrued rental income 6 800 - Bank 115 174 170 000

1 465 090 1 112 920

Members‟ contributions 833 000 730 400 Retained earnings / (losses) 150 820 53 800 Long-term loan 185 000 134 000 Accumulated depreciation: Machinery 106 290 45 600 Allowance for credit losses 3 700 3 000 Accrued water and electricity 4 400 - Distribution to members payable 51 000 73 400 Creditors control 90 080 45 520 Current tax payable 40 800 27 200

1 465 090 1 112 920

2. Balances of the statement of comprehensive income for the year ended 29 February 2012:

Revenue (sales) Cost of sales Rental income Investment income: Dividend received Interest expense

R 599 760 280 500

13 600 10 200 8 500

Income tax expense Credit losses Water and electricity Depreciation

136 816 5 700

34 334 60 690


1. All inventories are purchased and sold on credit.

2. Cash paid to suppliers and employees amounted to R269 414.

3. No machinery were scrapped or sold during the 2012 financial year. In response to the increasing demand for products of the CC, the members deemed it necessary to acquire an additional machine to improve productive capacity. One of the members of the CC decided to acquire a loan in his personal capacity from his bank. He used the proceeds from the loan to acquire the required machine at a cost of R45 000. The machine was brought into use by the CC on the 1 January 2012. This was recorded as a capital contribution in the books of the CC. All other machinery was purchased for cash.

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4. Investments consist of the following:

Fixed deposit at Gupta Bank R58 000

30 000 R2 Ordinary shares at Midrand Limited R60 000

5. Ridgewood CC follows the direct method of presenting the cash flows from operating activities.

QUESTION 8 Which one of the following alternatives represents the correct cash receipts from customers as disclosed in the statement of cash flows for the year ended 29 February 2012 of Ridgewood CC?

1. R593 374 2. R594 124 3. R599 760 4. R600 924 QUESTION 9 Which one of the following alternatives represents the correct amount of net cash used in/from operating activities in the statement of cash flows of Ridgewood CC for the year ended 29 February 2012?

1. R120 794 2. R123 216 3. R127 594 4. R142 094 QUESTION 10 Which one of the following alternatives represents the correct amount of net cash used in/from investing activities in the statement of cash flows of Ridgewood CC for the year ended 29 February 2012?

1. R181 500 2. R291 020 3. R305 520 4. R351 020

©

UNISA 2011 FAC1601_TL_101_3_2012_E

Documents

Department of Financial Accounting - files. · PDF fileMrs B Ceki Module Telephone Number: 012 429 4176 Module E-mail Address: [email protected] . FAC1601/101/3/2012 4 All queries