FAC1503 May/Jun 2018 paper — every question, as asked

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Question 1(a) · Cash journals, bank and reconciliation · 9 marks
Agripa Attorneys' bookkeeper totalled the firm's business cash receipts and cash payments journals for September 2017 before receiving the September 2017 bank statement. The business cash receipts journal totalled R89 500 and the business cash payments journal totalled R65 257. When comparing the bank statement to these journals and to the August 2017 bank reconciliation statement, the following was discovered: (1) on 1 September 2017 the bank account in the general ledger reflected a favourable balance of R3 867; (2) on 30 September 2017 the bank statement reflected a favourable balance of R5 015; (3) items appearing on the bank statement but not yet in the cash journals were an annual service fee of R355, an internet service fee of R125, cash deposit fees of R485, a direct deposit of R9 120 received on 25 September 2017 from client D Purple paid straight into the firm's bank account for fees charged, and a debit order of R650 paid to Fleetrisk Insurance for an insurance premium; (4) items appearing in the cash journals but not yet on the bank statement were cheque number 56 for R1 958 issued to the municipality on 25 September 2017 for water and electricity, and a deposit of R28 500 dated 30 September 2017; (5) the August 2017 bank reconciliation statement had reflected cheque number 32 of R6 852 issued to A Magati on 15 March 2017, cheque number 37 of R3 560 issued to T Mboyane on 3 July 2017, and cheque number 45 of R1 850 issued to client L Bethani on 25 August 2017 - cheque number 32 to A Magati is now stale and must be cancelled, while all the other items from the August reconciliation have since cleared; (6) client P Eddy made an electronic transfer of R2 520 to settle his account, but the bookkeeper mistakenly recorded this as R2 250 in the business cash receipts journal; (7) a cheque for R4 750 drawn by an unrelated client of the same bank was erroneously processed through Agripa Attorneys' bank account; and (8) a deposit of R11 300 received on 27 September 2017 from a client for a divorce matter was mistakenly recorded in Agripa Attorneys' business cash receipts journal instead of in the trust receipts journal. Using all the information given about Agripa Attorneys for September 2017, prepare, in the accounting records of Agripa Attorneys, the business cash receipts journal and the business cash payments journal (bank columns only), properly totalled, as at 30 September 2017. Answer on the answer sheet provided (pages 4 to 5 of the paper).Show the full questionShow less
Question 1(b) · Cash journals, bank and reconciliation · 5 marks
Agripa Attorneys' bookkeeper totalled the firm's business cash receipts and cash payments journals for September 2017 before receiving the September 2017 bank statement. The business cash receipts journal totalled R89 500 and the business cash payments journal totalled R65 257. When comparing the bank statement to these journals and to the August 2017 bank reconciliation statement, the following was discovered: (1) on 1 September 2017 the bank account in the general ledger reflected a favourable balance of R3 867; (2) on 30 September 2017 the bank statement reflected a favourable balance of R5 015; (3) items appearing on the bank statement but not yet in the cash journals were an annual service fee of R355, an internet service fee of R125, cash deposit fees of R485, a direct deposit of R9 120 received on 25 September 2017 from client D Purple paid straight into the firm's bank account for fees charged, and a debit order of R650 paid to Fleetrisk Insurance for an insurance premium; (4) items appearing in the cash journals but not yet on the bank statement were cheque number 56 for R1 958 issued to the municipality on 25 September 2017 for water and electricity, and a deposit of R28 500 dated 30 September 2017; (5) the August 2017 bank reconciliation statement had reflected cheque number 32 of R6 852 issued to A Magati on 15 March 2017, cheque number 37 of R3 560 issued to T Mboyane on 3 July 2017, and cheque number 45 of R1 850 issued to client L Bethani on 25 August 2017 - cheque number 32 to A Magati is now stale and must be cancelled, while all the other items from the August reconciliation have since cleared; (6) client P Eddy made an electronic transfer of R2 520 to settle his account, but the bookkeeper mistakenly recorded this as R2 250 in the business cash receipts journal; (7) a cheque for R4 750 drawn by an unrelated client of the same bank was erroneously processed through Agripa Attorneys' bank account; and (8) a deposit of R11 300 received on 27 September 2017 from a client for a divorce matter was mistakenly recorded in Agripa Attorneys' business cash receipts journal instead of in the trust receipts journal. Using all the information given about Agripa Attorneys for September 2017, prepare, in the accounting records of Agripa Attorneys, the bank account in the general ledger, properly balanced, as at 30 September 2017. Answer on the answer sheet provided (page 6 of the paper).Show the full questionShow less
Question 1(c) · Cash journals, bank and reconciliation · 7 marks
Agripa Attorneys' bookkeeper totalled the firm's business cash receipts and cash payments journals for September 2017 before receiving the September 2017 bank statement. The business cash receipts journal totalled R89 500 and the business cash payments journal totalled R65 257. When comparing the bank statement to these journals and to the August 2017 bank reconciliation statement, the following was discovered: (1) on 1 September 2017 the bank account in the general ledger reflected a favourable balance of R3 867; (2) on 30 September 2017 the bank statement reflected a favourable balance of R5 015; (3) items appearing on the bank statement but not yet in the cash journals were an annual service fee of R355, an internet service fee of R125, cash deposit fees of R485, a direct deposit of R9 120 received on 25 September 2017 from client D Purple paid straight into the firm's bank account for fees charged, and a debit order of R650 paid to Fleetrisk Insurance for an insurance premium; (4) items appearing in the cash journals but not yet on the bank statement were cheque number 56 for R1 958 issued to the municipality on 25 September 2017 for water and electricity, and a deposit of R28 500 dated 30 September 2017; (5) the August 2017 bank reconciliation statement had reflected cheque number 32 of R6 852 issued to A Magati on 15 March 2017, cheque number 37 of R3 560 issued to T Mboyane on 3 July 2017, and cheque number 45 of R1 850 issued to client L Bethani on 25 August 2017 - cheque number 32 to A Magati is now stale and must be cancelled, while all the other items from the August reconciliation have since cleared; (6) client P Eddy made an electronic transfer of R2 520 to settle his account, but the bookkeeper mistakenly recorded this as R2 250 in the business cash receipts journal; (7) a cheque for R4 750 drawn by an unrelated client of the same bank was erroneously processed through Agripa Attorneys' bank account; and (8) a deposit of R11 300 received on 27 September 2017 from a client for a divorce matter was mistakenly recorded in Agripa Attorneys' business cash receipts journal instead of in the trust receipts journal. Using all the information given about Agripa Attorneys for September 2017, prepare, in the accounting records of Agripa Attorneys, the bank reconciliation statement, properly balanced, as at 30 September 2017. Answer on the answer sheet provided (page 6 of the paper).Show the full questionShow less
Question 2(a) · Trust accounts and transfers · 10 marks
The trial balance of Loodfick Attorneys on 30 June 2016 reflected the following: business bank R6 840 (debit); trust bank R7 140 (debit); trust creditors control - A Gunty R6 740 (credit) and R Meiring R4 630 (credit); clients control - G Gapola R2 250 (debit), A Gunty R2 230 (debit) and R Meiring R2 100 (debit); capital R68 100 (credit); motor vehicles R46 100 (debit); furniture R9 500 (debit); prepaid insurance R1 385 (debit); and petty cash R1 925 (debit), with total debits and credits both equal to R79 470. Additional information (1): the subsidiary journals of Loodfick Attorneys for 31 July 2017 reflected the following totals - the trust cash receipts journal showed trust creditors of R3 580 (made up of A Gunty R1 230 and R Meiring R2 350) against bank R3 580; the trust cash payments journal showed trust creditors of R9 630 (made up of A Gunty R5 730 and R Meiring R3 900) against bank R9 630; the business cash payments journal showed sundries of R5 550 against bank R5 550; and the fees journal showed clients control of R5 520 (made up of A Gunty R1 940 and R Meiring R3 580) against fees R5 520. Additional information (2): of the amount received from R Meiring in the trust cash receipts journal, R1 000 represents a deposit for a different matter that is still to be finalised within the following three months. Using the trial balance and additional information for Loodfick Attorneys given above, open the trust bank account (5 marks) and the trust creditors account (5 marks) in the general ledger of Loodfick Attorneys as at 31 July 2017, and post the subsidiary journal entries described in additional information (1) and (2) to these ledger accounts. All accounts must be properly balanced as at 31 July 2017, and the general ledger accounts must commence with the opening balances given in the trial balance above. This part must be answered on page 8 of the examination paper.Show the full questionShow less
Question 2(b) · Trust accounts and transfers · 13 marks
The trial balance of Loodfick Attorneys on 30 June 2016 reflected the following: business bank R6 840 (debit); trust bank R7 140 (debit); trust creditors control - A Gunty R6 740 (credit) and R Meiring R4 630 (credit); clients control - G Gapola R2 250 (debit), A Gunty R2 230 (debit) and R Meiring R2 100 (debit); capital R68 100 (credit); motor vehicles R46 100 (debit); furniture R9 500 (debit); prepaid insurance R1 385 (debit); and petty cash R1 925 (debit), with total debits and credits both equal to R79 470. Additional information (1): the subsidiary journals of Loodfick Attorneys for 31 July 2017 reflected the following totals - the trust cash receipts journal showed trust creditors of R3 580 (made up of A Gunty R1 230 and R Meiring R2 350) against bank R3 580; the trust cash payments journal showed trust creditors of R9 630 (made up of A Gunty R5 730 and R Meiring R3 900) against bank R9 630; the business cash payments journal showed sundries of R5 550 against bank R5 550; and the fees journal showed clients control of R5 520 (made up of A Gunty R1 940 and R Meiring R3 580) against fees R5 520. Additional information (2): of the amount received from R Meiring in the trust cash receipts journal, R1 000 represents a deposit for a different matter that is still to be finalised within the following three months. For Loodfick Attorneys, calculate the amount that should be transferred from the trust bank account to the business bank account on 31 August 2017 in respect of 'G Gunty' and R Meiring, taking into account all the information given in the question. This may be done either by completing the table provided on page 9 of the examination paper, or by compiling the relevant ledger accounts (trust creditors/payables ledger and clients ledger) on pages 10 to 11 of the examination paper, showing how the amounts would appear in the accounting records of Loodfick Attorneys. All calculations must be shown.Show the full questionShow less

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