NKUHLU DEPARTMENT OF ACCOUNTING

ACCOUNTING 1A
ACC111/ACC111E

CLASS ASSESSMENT OPPORTUNITY 1

4 March 2019

ASSESSORS: Mrs LH Mtshwelo

Mr M Bomba
Mr SM Msakatya

MODERATOR: Ms S Mahintsho (Internal)

TIME: 1 hour

MARKS: 50

PAGES: 4 pages (including front page)

INSTRUCTIONS:
1. Answer all the questions.
2. Start each question on a new page.
3. Show all workings clearly – marks are allocated to workings.
4. Only answers in ink will be marked (including workings). Pages where pencil or
tippex were used will not qualify for remarking.
5. Only silent, non-programmable calculators are allowed.
6. Students that contravene the rules in the General Prospectus of the University
of Fort Hare will be disciplined in accordance with said rules.

Question Topics covered Marks Minutes

1 Theory 10 12
2 Financial Statements 40 48
TOTAL 50 60
Question 1 10 marks (12 minutes)

The following transactions relate to the business entity, Samsung Limited which began trading
on the 1 February 2018.

1. On 1 February 2018, Samsung Limited brought a vehicle costing R100 000 for cash.
The estimated useful life of the vehicle is five years with no residual value

2. On 2 April 2018 an amount of R15 000 was received from customers in respect for
services to be provided evenly during the period 1 April 2018 – 31 July 2018.

3. On 15 April 2018, Samsung Limited sold 20 cell phones on credit to a customer for
R10 000 each. An amount of R125 000 is due by 30 April and the balance by 15 May.

Marks
QUESTION 1 – REQUIRED Sub-
Total
total
For transactions 1 – 3 above, answer the questions listed below (a
– c). It’s advisable to use the table illustrated below.

a) State the amount of cash received or paid during April 2018. 1

b) State the accrual basis income or expense for April 2018. 3
c) Provide a brief explanation of why the cash received or paid is
different to the accrual basis income or expense. 6
Total 10 10

NOTE: It is suggested that you draw up a table as illustrated below to answer the questions
given:

No. Cash Received Accrual Basis Income or Explanation

or Paid during Expense for the 3 months
April ending 30 April 2018

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Question 2 40 marks (48 minutes)

Pre-adjustment Trial Balance of Beautiful Days Camping as at 30 June 2018

Debit Credit
R R
Capital 3 331 550
Fixed deposit: Wheels Bank (10% per annum) 500 000
Campsite Buildings 4 000 000
Loan: Kumkani Bank (21% per annum) 750 000
Bank 387 500
Motor Vehicles 2 500 000
Furniture 500 000
Accumulated depreciation - Vehicles 1 000 000
Accounts Receivable 310 000
Stationery on hand 38 000
Campsite fees collected in advance 30 000
Campsite Fees income 4 654 000
Insurance expense 132 000
Allowance for Doubtful Debts 10 000
Bad debts 22 050
Interest received 30 000
Interest paid 126 000
Commission received 65 000
Salaries and wages 392 000
Advertising expense 165 000
Distribution to the owner 680 000
Business rates 240 000
Trade Payables 986 000
Electricity and water 864 000
10 856 550 10 856 550

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Question 2 Continued:
Additional information:

a) Depreciation on the entity’s non-current assets, which has not yet been provided for, must
be taken into account as follows:

• The campsite buildings were purchased on 30 June 2018 and are estimated to
have an estimated useful life of 25 years with no residual value.

• Furniture was bought on 30 June 2017 and depreciation is written off at 20% per
annum on a straight line method.

• Depreciation that must be written off on motor vehicles amounted to R500 000 for
the year ending 30 June 2018.

b) A physical inventory count revealed that approximately 60% stationery has been used by
the end of the financial year (30 June 2018).

c) The fixed deposit was made on 1 October 2017. No entry has been made to adjust for
interest receivable on fixed deposit.

d) The loan from Kumkani Bank was approved and received on 1 April 2013. The contract
included that twenty equal annual repayments on the loan capital amount were to be made
from 31 March 2014. All the capital repayments have been made on the correct dates.
Interest is calculated on the capital balance for each financial year.

e) The insurance expense amount includes R36 000 paid for a two year policy beginning on
1 February 2018.

f) The amount of campsite fees collected in advance R30 000 was received from a tourist
who paid for four months in advance on 1 April 2018. Campsite fees due but not yet
received amounted to R8 000. No journal entries have been made to provide for these
adjustments.

g) Allowance for doubtful debts must be adjusted to 4% of accounts receivables.

Marks
QUESTION 2 – REQUIRED Sub-
Total
total
(a) Record the adjusting entries in the General Journal of Beautiful 24 24
Days Camping on 30 June 2018. Narrations are NOT required.
(b) Prepare the statement of profit or loss for the year ending 30 June 16 16
2018.
Total 40

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