FAC1501 May/Jun 2015 exam paper — questions

Every question, by topic

1. Question 1.1 (Part A) · Bank reconciliation · 10 marks

   It is divided into Part A and Part B, and candidates must answer both parts, starting the question on a new page. PJ Stores, an entity that is not registered for VAT and applies the perpetual inventory system, entered into the following transactions during the week ended 6 March 2015: on the 2nd, the owner Mrs P Johnson increased her capital contribution from R50 000 to R70 000, and receipt number 228 was issued; on the 3rd, R3 500 was received from Mrs K Khumalo, a debtor of PJ Stores, as part settlement of her account, with receipt number 229 issued; on the 4th, an original credit purchases invoice was received from MG Wholesalers for R5 000 of inventory bought on credit; on the 5th, the account of debtor Mr T Peters, who owed PJ Stores R600, was written off as irrecoverable; and on the 6th, business cheque number 199 for R950 was issued to pay the secretary's wage for the week. You are required to prepare a table (using the format: Date | A = E + L) showing the effect of each of these transactions on the accounting equation, using a '+' sign for an increase and a '-' sign for a decrease, and assuming that where applicable the bank balance is positive.Show the full questionShow less

2. Question 1.2(a) (Part B) · Bank reconciliation · 4 marks

   It is divided into Part A and Part B, and candidates must answer both parts, starting the question on a new page. The following information was extracted from the accounting records of Household Appliances Services, whose inexperienced bookkeeper could not complete the bank reconciliation for the month ended 30 April 2015. The total of the bank column in the adjusted cash receipts journal, after comparing the bank statement with the cash receipts journal for April 2015, was R35 800, and the total of the bank column in the adjusted cash payments journal, after the same comparison, was R29 300. Additional information: (1) the bank account in the general ledger showed a favourable balance of R10 700 on 1 April 2015; (2) the bank statement showed a favourable closing balance of R21 700 at 30 April 2015; (3) after comparing the bank statement with the cash receipts and cash payments journals, further differences (apart from those already recorded in the cash journals) were found, namely: a direct deposit of R4 200 that did not belong to Household Appliances Services appeared on its bank statement; a deposit of R3 600 did not appear on the bank statement for April 2015; and cheque numbers 135 (for R1 400) and 141 (for R2 500) did not appear on the bank statement for April 2015. You are required to prepare the bank account in the general ledger of Household Appliances Services for April 2015 and balance the account.Show the full questionShow less

3. Question 1.2(b) (Part B) · Bank reconciliation · 6 marks

   It is divided into Part A and Part B, and candidates must answer both parts, starting the question on a new page. Using the same information about Household Appliances Services as in part (a) above (adjusted cash receipts journal bank total of R35 800 and adjusted cash payments journal bank total of R29 300 for April 2015; opening general ledger bank balance of R10 700 (favourable) on 1 April 2015; bank statement closing balance of R21 700 (favourable) at 30 April 2015; a direct deposit of R4 200 not belonging to the entity appearing on the bank statement; a deposit of R3 600 not yet appearing on the bank statement; and outstanding cheques number 135 for R1 400 and number 141 for R2 500), you are required to prepare the bank reconciliation statement of Household Appliances Services as at 30 April 2015.Show the full questionShow less

4. Question 2.1 · Journals & posting to the ledger · 8.5 marks

   Sanamuva Distributors, a business registered as a VAT vendor, recorded the following transactions during May 2015. VAT is levied at 14% and is already included in all amounts given where applicable, and the entity applies the periodic inventory system. On 1 May, duplicate receipt number 25 for R50 000 was banked, being an increase in the capital contributed by the owner, Mr Samuva; on the same day cheque counterfoil number 110 for R3 990 was issued to Ingwe Properties for the monthly rent. On 7 May, duplicate cash invoice number 304 recorded goods sold to Road Construct for R41 952. On 10 May, internet payment slip IN204 for R45 200 was processed, made up of a R15 000 salary paid to Mrs Chip and R30 200 paid to creditor Mr P Doors. On 15 May, cheque counterfoil number 111 for R1 500 was issued to establish the petty cash float. On 20 May, cash register roll number 126 reflected total cash sales of R39 900. On 28 May, original invoice IP288 was received from Tools Traders for inventory purchased, amounting to R30 267 after a cash discount had already been deducted. Additionally, on 30 May Mr C Carpenter, a debtor, was declared insolvent; his outstanding balance at the end of April 2015 had been R6 179, of which he paid R3 500 (per duplicate receipt number 26) on 30 May, with the remaining balance to be written off as irrecoverable. Using the suggested column headings of Day, Details, Bank, Sales, Debtors control, VAT Output, and Sundry accounts (Amount and Details), prepare the Cash Receipts Journal (CRJ5) of Sanamuva Distributors for May 2015 based on the transactions described. Do not close off the journal at the end of the month.Show the full questionShow less

5. Question 2.2 · Journals & posting to the ledger · 11 marks

   Sanamuva Distributors, a business registered as a VAT vendor, recorded the following transactions during May 2015. VAT is levied at 14% and is already included in all amounts given where applicable, and the entity applies the periodic inventory system. On 1 May, duplicate receipt number 25 for R50 000 was banked, being an increase in the capital contributed by the owner, Mr Samuva; on the same day cheque counterfoil number 110 for R3 990 was issued to Ingwe Properties for the monthly rent. On 7 May, duplicate cash invoice number 304 recorded goods sold to Road Construct for R41 952. On 10 May, internet payment slip IN204 for R45 200 was processed, made up of a R15 000 salary paid to Mrs Chip and R30 200 paid to creditor Mr P Doors. On 15 May, cheque counterfoil number 111 for R1 500 was issued to establish the petty cash float. On 20 May, cash register roll number 126 reflected total cash sales of R39 900. On 28 May, original invoice IP288 was received from Tools Traders for inventory purchased, amounting to R30 267 after a cash discount had already been deducted. Additionally, on 30 May Mr C Carpenter, a debtor, was declared insolvent; his outstanding balance at the end of April 2015 had been R6 179, of which he paid R3 500 (per duplicate receipt number 26) on 30 May, with the remaining balance to be written off as irrecoverable. Using the suggested column headings of Day, Details, Bank, Purchases, Creditors control, VAT Input, and Sundry accounts (Amount and Details), prepare the Cash Payments Journal (CPJ5) of Sanamuva Distributors for May 2015 based on the transactions described. Do not close off the journal at the end of the month.Show the full questionShow less