FAC1501 Oct/Nov 2014 exam paper — questions

Every question, by topic

1. Question 1.1 · Accounting equation & classification · 12 marks

   The following transactions were extracted from the records of Lufano Traders for the week ended 7 February 2014 (the business uses the perpetual inventory system): on 3 February the owner, Mr Lufano Sithole, increased his capital contribution from R250 000 to R350 000; on 4 February the water and electricity account of R4 000 was paid using business cheque number 007; on 5 February inventory to the value of R70 000 was purchased on credit from HS Wholesalers; on 6 February Mr T Smith, a customer of Lufano Traders, purchased goods for R2 500 cash (the cost of these sales was R2 000); and on 7 February Mr Lufano Sithole took R500 cash from the cash register for his own personal use. You are required, for each of these transactions, to show the effect on the accounting equation, using a '+' sign for an increase and a '-' sign for a decrease in each element affected, together with the relevant amount of the increase or decrease. Where applicable you should assume that the bank balance is positive. Your answer must be presented in a table with columns for the transaction number, Equity, Assets and Liabilities (in the format: No | Equity | = | Assets | - | Liabilities).Show the full questionShow less

2. Question 1.2 · Accounting equation & classification · 12 marks

   Lufano Traders gives you the following list of selected accounts taken from its General Ledger for February 2014: 1 Telephone expenses; 2 Bank (favourable); 3 Equipment; 4 Services rendered; 5 Cash float; 6 Accrued expenses; 7 Long-term loan BA Bank; 8 Consumables; 9 Machinery; 10 Credit losses recovered; 11 Prepaid expenses; 12 Short-term loan JP Bank. The owner of Lufano Traders, knowing that you are studying FAC1501 at UNISA, asks you to draw up a table and classify each of these twelve general ledger accounts under the appropriate heading. The table should have columns for the account number, Assets, and under Equity separate columns for Income and Expenses, plus a column for Liabilities. As an example, the Inventory account (not part of the numbered list) would be classified as an asset and placed in the Assets column, as shown in the example row of the table.Show the full questionShow less

3. Question 2 Part A · Bank reconciliation · 14 marks

   This question is divided into Part A and Part B, and both parts must be answered, starting the whole question on a new page. Phatudi Boiler's general ledger reflects the following balances for the year ended 30 April 2014: sales R900 900; cost of sales R485 000; bank charges R1 378; interest expenses R948; rental income R30 000; wages and salaries R240 800; water and electricity R9 200; advertising R56 000; stationery R12 000; profit on sale of non-current assets R1 700; telephone expenses R26 000; drawings R14 000; vehicle at cost R198 000; petty cash R3 000; and trading inventory R67 000. You are required to prepare the profit or loss account for Phatudi Boiler for the year ended 30 April 2014, showing all your calculations.Show the full questionShow less

4. Question 2.2(a) Part B · Bank reconciliation · 4 marks

   This question is divided into Part A and Part B, and both parts must be answered, starting the whole question on a new page. Speech Lingo's bookkeeper is inexperienced with the bank reconciliation process and could not complete the accounting work. You are given the adjusted cash receipts journal (CRJ3) and cash payments journal (CPJ3) for March 2014, already compared against the bank statement. The cash receipts journal shows totals of R18 900 plus interest income of R2 500, giving R21 400. The cash payments journal shows totals of R21 200 plus bank charges of R675, interest on overdraft of R465, tracking services (debit order) of R1 200, and an R/D cheque from O L Dubai of R3 000, giving R26 540. Additional information: (1) the bank account in Speech Lingo's records showed a positive balance of R4 895 on 28 February 2014; (2) after comparing the bank statement with the cash journals, further differences were found besides those already recorded in the cash journals: (2.1) a direct deposit of R3 470 for Speed Services was incorrectly credited on Speech Lingo's bank statement; (2.2) a deposit of R4 550 did not appear on Speech Lingo's March 2014 bank statement; (2.3) cheque numbers 114 (R850), 121 (R1 125) and 123 (R560) did not appear in the debit column of the March 2014 bank statement; and (2.4) the bank statement reflected a credit closing balance of R1 210 as at 31 March 2014. Required: prepare the bank account in the general ledger of Speech Lingo for March 2014 and balance the account.Show the full questionShow less

5. Question 2.2(b) Part B · Bank reconciliation · 7 marks

   This question is divided into Part A and Part B, and both parts must be answered, starting the whole question on a new page. Using the same information about Speech Lingo given for the bank account (the adjusted CRJ3 total of R21 400 including interest income of R2 500, the adjusted CPJ3 total of R26 540 including bank charges of R675, interest on overdraft of R465, tracking services debit order of R1 200 and an R/D cheque from O L Dubai of R3 000; the opening favourable bank balance of R4 895 on 28 February 2014; a direct deposit of R3 470 for Speed Services incorrectly credited on the bank statement; an outstanding deposit of R4 550 not yet on the March 2014 bank statement; outstanding cheques number 114 for R850, number 121 for R1 125 and number 123 for R560; and a bank statement credit closing balance of R1 210 as at 31 March 2014), you are required to prepare the bank reconciliation statement of Speech Lingo as at 31 March 2014.Show the full questionShow less