23 2023

MODULE NAME: MODULE CODE:

ACCOUNTING 1B ACBP5122/d/w
ACCOUNTING 1B ACBP5112/d/f/p/w

ASSESSMENT TYPE: EXAMINATION (PAPER ONLY)

TOTAL MARK ALLOCATION: 180 MARKS
TOTAL HOURS: 3 HOURS (+15 minutes reading time)
INSTRUCTIONS:
1. Please adhere to all instructions in the assessment booklet.
2. Independent work is required.
3. Five minutes per hour of the assessment to a maximum of 15 minutes is dedicated to
reading time before the start of the assessment. You may make notes on your question
paper, but not in your answer sheet. Calculators may not be used during reading time.
4. You may not leave the assessment venue during reading time, or during the first hour or
during the last 15 minutes of the assessment.
5. Ensure that your name is on all pieces of paper or books that you will be submitting. Submit
all the pages of this assessment’s question paper as well as your answer script.
6. Answer all the questions on the answer sheets or in answer booklets provided. The phrase
‘END OF PAPER’ will appear after the final set question of this assessment.
7. Remember to work at a steady pace so that you are able to complete the assessment within
the allocated time. Use the mark allocation as a guideline as to how much time to spend on
each section.
Additional instructions:
1. This is a CLOSED BOOK assessment.
2. Calculators are allowed.
3. Answer All Questions .
4. Ensure that you have received a special answer booklet (with forms drawn up) for entering
your answers. If you have not received an answer booklet, request one from the invigilator
before starting the assessment. Answer all questions in the answer booklet provided.
5. Show all calculations, where applicable (marks may be awarded for this).

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Question 1 (Marks: 20)

For each of the transactions below, provide ONLY the relevant name of the account in the general
ledger that would be Debited and Credited. (Amounts are NOT required).
VAT may be ignored.

TRANSACTION DEBIT CREDIT

e.g., Wages payable, R5 000 Wages expense Accrued
expenses
Bank charges paid R500.
Outstanding deposit identified on bank statement not
reflected in the business’s books R5 000 for rent income.
Accrued interest on fixed deposit, R210
Interest charged on debtor’s overdue account R250
Prepaid expense telephone R300.
Rent income received in advance for the next financial year
R8 000.
Depreciation on vehicles for the year R1 200
Interest on capital for partners Tom and Jerry:
Tom: R18 000
Jerry: R13 200
Annual salary to be recorded in the current account of
partner Tom R30 000.
Close off income tax to appropriation account for a close
corporation.

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Question 2 (Marks: 15)

The following bank reconciliation statement was prepared for Saturn Traders for the current
month being October 2022:
Bank reconciliation on 31 October 2022
Balance as per bank statement ?
Outstanding deposit (31 October 2022) 10 990
Outstanding deposit (31 October 2022) 7 900
Outstanding EFT’s: 15 320
No. 134 (26 October 2022)
No. 136 (24 November 2022) 4 870
Balance as per bank account ?

Additional information
• The balance in the bank account in the general ledger of Saturn Traders on
31 October 2022, before the following information was taken from the bank statement on
31 October 2022, was a favourable balance of R3 130.
• The following entries were in the October 2022 bank statement, but have not yet been
recorded in the October cashbooks:
o A direct deposit of R1 300 made by a debtor in payment of his account.
o A stop order for R2 500 for the business’s insurance expense.
o A debit order for R2 800 in favour of Pluto Dealers for the regular supply of trading
stock
o EFT 23 for R2 560, which was outstanding on the September bank reconciliation, had
come through. This is the correct amount of the EFT, but it had been incorrectly
recorded in the Cashbook payments in September as R2 650.

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Required:
Refer to the bank reconciliation statement and the additional information from the
bank statement to answer the following questions:
Q.2.1 What type of difference is the outstanding deposit on the bank reconciliation (1)
statement of October 2022?

Q.2.2 What type of difference is the Stop order of R2 500 for the business’s insurance (1)
expense?

Q.2.3 Calculate the corrected bank balance in the bank account in the general ledger of (7)
Saturn Traders on 31 October 2022 after considering the incorrect entry and
additional information. Also state whether this is a debit or credit balance in the
bank account.

Q.2.4 Calculate the balance on the bank statement on 31 October 2022 and state (6)
whether it is a negative or a positive balance.

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Question 3 (Marks: 30)

Planet Café is situated in central Johannesburg. Planet Café sells basic food items to customers for
cash only. Planet Café does however buy stock for cash and on credit. On 1 June 2022, Planet Café
decided to enter into a credit arrangement with one of its suppliers, Galaxy Wholesalers. The
following statement was received from Galaxy Wholesalers on 31 August 2022:

GALAXY WHOLESALERS
STATEMENT OF:
PLANET CAFÉ
JOHANNESBURG
31 AUGUST 2022
STATEMENT NO: PC002
DATE DETAILS DEBIT CREDIT BALANCE
01/08/22 Balance b/f 8 654.00
04/08/22 Invoice B55 1 163.00 9 817.00
05/08/22 Credit Note 245 317.00 9 500.00
07/08/22 Receipt 72 – payment Thank 3 000.00 6 500.00
You
07/08/22 Discount 240.00 6 260.00
12/08/22 Invoice B82 13 400.00 19 660.00
14/08/22 Invoice B91 2 570.00 22 230.00
20/08/22 Receipt 99 – payment Thank 2 500.00 19 730.00
You
26/08/22 Invoice B121 1 845.00 21 575.00
27/08/22 Credit Note 288 842.00 20 733.00
Debtors' Age Analysis of outstanding debt
90 + DAYS 60 DAYS 30 DAYS CURRENT
R0 R3 000 R5 654 R12 079
CREDIT TERMS
• All debt to be settled within 30 days after the date of the statement (i.e., the month after
purchase).
• An 8% settlement discount on payments is given if payments are made within the month
of purchase.

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Additional information
• Of the opening balance of R8 654 at 1/08/22, R3 000 was owing from June purchases and
the rest (R5 654) from July purchases.
• Credit note 245 on 05/08/22 was for goods bought on 04/08/22.
• The balance of Galaxy Wholesalers account at 31/08/22 per Planet Café's creditors ledger is
R10 359.
• After careful comparison of the statement and Galaxy Wholesalers account in the creditors
ledger in the books of Planet Café, the following errors were noted on the statement
received from Galaxy Wholesalers:
o Invoice B82 on the statement was not for credit purchases made by Planet Café.
o The discount allowed per the statement on 07/08/22 should not have been given.
o The actual value of the credit note allowed on 27/08/22 per the statement is R941.
• The following errors were discovered in the Galaxy Wholesalers account in the creditors
ledger of Planet Café:
o Invoice B55 was incorrectly recorded as R4 163.
o The credit note 245 on the 05/08/22 was entered as R432 in the creditors ledger. This
is not the correct value of the credit note. The correct value is as per the statement –
R317.
Required:
Q.3.1 Petunia, the bookkeeper at Planet Café does not understand why reconciliations (4)
are important. Explain to her the purpose of reconciliations and name two areas,
other than debtors and creditors reconciliations, where a business would find
reconciliations useful.

Q.3.2 Why does the statement received from Galaxy Wholesalers refer to the 'Debtors' (2)
Age Analysis', if this is a statement received from Planet Café's creditor?

Q.3.3 Prepare the creditors reconciliation statement for Galaxy Wholesalers in the books (11)
of Planet Café for August 2022. (Assume that all entries prior to August were done
correctly.)

Q.3.4 In your answer booklet correct the account of Galaxy Wholesalers in the creditors (11)
ledger of Planet Café.

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Q.3.5 Explain why Planet Café should not have been given the R240 discount on (2)
07/08/22.

Question 4 (Marks: 15)

On 1 January 2022, the following balances appeared in the ledger of Saturn Traders:
Equipment R20 000
Accumulated depreciation on equipment ?

Additional information:
• The equipment was purchased on 30 June 2019. No other equipment has been purchased.
• Depreciation on equipment is calculated at 10% per annum using the diminishing balance
method with no residual value.
• The equipment was sold on 30 September 2022 for R9 000 cash.
• Saturn Traders has a 31 December financial year-end.

Ignore VAT.

Required:
Q.4.1 Calculate the accumulated depreciation on 1 January 2022. (7)

Q.4.2 Calculate the profit or loss on the sale of the asset on 30 September 2022. (8)
Clearly state if a profit or loss was made.
Round to the nearest rand.

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Question 5 (Marks: 30)

The following is an extract of balances of Saturn Traders at the end of the financial year,
31 December 2022:
R
Land and buildings 250 000
Investments (Non-current) 120 000
Furniture 44 000
Accumulated depreciation on furniture 4 000
Cleaning materials expensed 10 000
Trade receivables 20 000
Bank 26 000
Capital 434 500
Sales 342 000
Cost of sales 160 000
Sales returns 8 000
Rent income 27 000
Salaries and wages 96 000
Advertising 18 000
Interest income 9 000
Insurance 4 500
Inventory 60 000

Additional information:
The following adjustments have not yet been recorded:
• The investment was made for a full year. Interest was only received for 9 months. Interest
income is only received on this investment.
• The depreciation for the year:
o Furniture R4 000
• Inventories stock take on 31 December 2022 reflected R58 000 inventories on hand.
• Cleaning materials worth R3 000 were on hand on 31 December 2022.
• Rent income includes R5 400 for the first 3 months of 2023.
• Salaries and wages expense incorrectly includes an amount of R2 000. This amount is a loan
made to the employer. The amount will be repaid during January 2023.

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• At the end of the current financial year R500 was owing on insurance premiums.

Required:
Q.5.1 Calculate the profit for Saturn Traders for the year ended 31 December 2022. (10)

Q.5.2 Prepare the Statement of Financial Position for Saturn Traders as at (20)
31 December 2022.

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Question 6 (Marks: 40)

The following information was obtained from the records of Planets, a partnership with two
partners, Miss Pluto and Miss Saturn. The financial year of the partnership ends on 30 June
annually.
The following balances appeared on 30 June 2022:
DEBIT CREDIT
Capital: Miss Pluto 150 000
Capital: Miss Saturn 200 000
Current (Opening balance): Miss Pluto 49 200
Current (Opening balance): Miss Saturn 42 000
Drawings: Miss Pluto 42 000
Drawings: Miss Saturn 30 000
Profit before distribution for the previous 100 000
year

The partnership agreement states the following:

1. Interest on capital accounts must be recorded at 8% per annum. Miss Pluto contributed a
further R80 000 cash on the 1 April 2022. The contributions have been correctly recorded.
2. Interest on drawings must be charged at 10% per annum as if the drawings were taken as a
lump sum 6 months prior to the financial year-end.
3. Interest on current accounts must be recorded at 6% of the opening balances.
4. The partners must receive the following annual salaries:
• Miss Pluto: R100 000
• Miss Saturn: R120 000
These are not regarded as operating expenses.
5. Miss Pluto must receive a bonus of 20% of the profit before distribution for the previous
year.
6. The remaining loss, after taking into account, all the partnership agreement adjustments
per 1 to 5 above, for the year of R177 600 is to be split between the partners, Miss Pluto
and Miss Saturn, in the ratio of 3:1.

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Required:
Q.6.1 Journalise the following adjustments as per the partnership agreement: (40)
• Interest on capital
• Interest on drawings
• Interest on current accounts
• Salaries to partners
• Bonuses to partners
• Share of the loss between the partners

Show all workings.

Journal narrations are not required.

Question 7 (Marks: 20)

The following information has been extracted from the books of Planet CC for the period ended
30 June 2022:
Details Dr CR

Members Contribution: Miss Sun 225 000

Members Contribution: Mr. Moon 45 000

Loan from member: Miss Sun 36 000

Loan from member: Mr. Moon 36 000

Retained income at 30 June 2021 258 000

Additional information:
• Profit for the year ended 30 June 2022 was R990 000
• The income tax for the year has been calculated as R274 000
• Members are entitled to a distribution of R240 000 to be shared according to their
members interest percentage.
• Members interest:
o Miss Sun: 60%
o Mr. Moon: 40%

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Required:
Q.7.1 On 1 July 2021 Miss Mars was admitted into the Close Corporation as a member. (9)
Miss Mars acquired a 20% stake in the CC.
Calculate the new % interest for all members.

Use the table below in your answer booklet to show your answer:
Miss Sun Mr. Moon Miss Mars
% Interest before
Miss Mars is
admitted
Change in interest
% Interest after
Miss Mars is
admitted

Q.7.2 Prepare the Appropriation account in the general ledger of Planet CC for the year (10)
ended 30 June 2022.

Q.7.3 When an owner of a close corporation contributes funds to the close corporation (1)
is it called “Members contribution” or “Capital”?

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Question 8 (Marks: 10)

The owner of Apollo Traders has provided you with the following information for the year ended
31 December 2022:
R
Capital balance at the beginning of the year – 106 684
1 January 2022

Additional information:
• For the year ended 31 December 2022
R
Sales 28 000
Cost of sales 14 000
Other income 1 000
Expenses 2 500

Additional information:
• Depreciation of R600 on furniture has not been recorded for the year ended
31 December 2022.
• The furniture was purchased on 31 December 2021.
• During the year ended 31 December 2022 the owner took R5 800 cash for personal use.
This has not been recorded.
• The owner contributed R24 800 on 1 December 2022. This has not been recorded.

Required:
Q.8.1 Provide the statement of changes in equity for Apollo Traders for the year ended (10)
31 December 2022.
Show all workings.

END OF PAPER

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