QUESTION 1 BANK RECONCILIATION (20 MARKS)

The information given below was extracted from the accounting records of Mika

Stores.

REQUIRED

1.1 Complete the Cash Receipts Journal and Cash Payments Journal of Mika

Stores for March 2018 after taking the information provided into account. Use

only the columns illustrated below. In the details column write down the name

of the contra account e.g. Rent income.

(11)

Cash Receipts Journal

Details Bank

Total

b/f

Cash Payments Journal

Details Bank

Total

b/f

MODULE FUNDAMENTALS OF FINANCIAL ACCOUNTING

TOTAL MARKS 60 MARKS

1.2 Post to the Bank account in the General ledger of Mika Stores. Balance the

account.

(3)

1.3 Prepare the Bank Reconciliation Statement as at 31 March 2018. Use the

following format:

(6)

Bank Reconciliation Statement as at 31 March 2018

Debit Credit

INFORMATION

R

1. The bank column of each of the cash journals showed the following totals

before the March 2018 bank statement was received:

Cash Receipts Journal

Cash Payments Journal

300 000

350 000

2. A comparison of the cash journals of Mika Stores for March 2018 and the

Bank Reconciliation Statement for February 2018 with the bank

statement from Key Bank for March 2018 revealed the following

differences:

2.1 Entries that appeared on the bank statement but not in the cash

journals:

R

2.1.1 A cheque previously received from the lessee for rent was dishonoured

because of insufficient funds.

6 800

2.1.2 A debit order in favour of Telkom for the personal telephone account of

the proprietor.

3 800

2.1.3 Charges levied by Key Bank:

Service fees

Cash deposit fee

Interest on overdraft

1 500

1 000

100

2.1.4 A deposit by a debtor to settle his account of R6 200 6 000

2.1.5 A deposit by Key Bank for a successful loan application 50 000

2.2 Entries in the cash journals that did not appear in the bank

statement:

R

2.2.1 A deposit made on 31 March 2018 102 400

2.2.2 The following cheque issued during March 2018:

Cheque no. 520

8 700

3. Additional information R

3.1 Cheque no. 490 (dated 23 February 2018) which appeared in the Bank

Reconciliation Statement for February 2018 did not appear in the bank

statement for March 2018.

16 140

3.2 Cheque no. 460 issued to Rix Soccer Club during January 2018 as a

donation must be cancelled as the club no longer exists.

4 800

3.3 A deposit made by Rika Stores was erroneously reflected on the bank

statement of Mika Stores.

4 000

3.4 An entry was made in the Cash Payments Journal for a cheque to a

creditor

MS Suppliers for R10 000. The bank statement reflected the correct

amount of the cheque, R11 000.

3.5 The bank account in the ledger of Mika Stores reflected a debit balance

on

01 March 2018.

38 800

3.6 The bank statement showed an unfavourable balance on 31 March 2018. ?

QUESTION 2 PARTNERSHIPS (20 MARKS)

The information given below was extracted from the accounting records of Netcare Traders,

a partnership business with Nettie and Caren as partners.

REQUIRED

Prepare the Statement of Changes in Equity for the year ended 28 February 2018.

INFORMATION

Extract from the ledger of Netcare Traders on 28 February 2018:

The following must be taken into account:

(a) The net profit according to the Profit and loss account amounted to R800 000.

(b) The partners are entitled to the following monthly salaries:

Nettie

Caren

R20 000

R18 000

(c) The partners are entitled to interest on their capitals at a rate of 15% per year.

(d) Nettie is entitled to a special bonus equal to 10% of the net profit before any of the above

appropriations are taken into account.

(e) The remaining profit or shortfall must be shared between Nettie and Caren in the ratio 3:2

respectively.

Debit Credit

R R

Capital: Nettie 600 000

Capital: Caren 400 000

Current account: Nettie (01 March 2016) 40 000

Current account: Caren (01 March 2016) 30 000

Drawings: Nettie 300 000

Drawings: Caren 250 000

QUESTION 3 FINANCIAL STATEMENTS (20 MARKS)

The trial balance, adjustments and additional information given below were extracted

from the accounting records of Jem Traders on 28 February 2018, the end of the

financial year.

REQUIRED

Prepare the Statement of Comprehensive Income for the year ended 28 February

2018.

PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2018

Debit (R) Credit (R)

Balance sheet accounts section

Capital 884 000

Drawings 264 000

Land and buildings 664 000

Equipment at cost 136 000

Accumulated depreciation on equipment 61 000

Fixed deposit: Mono Bank (10% p.a.) 30 000

Trading inventory 162 000

Debtors control 47 000

Bank 290 000

Cash float 2 000

Creditors control 45 000

Loan: Mono Bank 87 000

Nominal accounts section

Sales 1 760 000

Cost of sales 895 000

Sales returns 28 000

Salaries and wages 180 000

Rent income 33 000

Commission income 4 000

Stationery 7 000

Advertising 50 000

Telephone 17 000

Electricity and water 24 000

Bank charges 3 000

Insurance 15 000

Interest on loan 17 000

Sundry expenses 43 000

2 874 000 2 874 000

Adjustments and additional information

1. According to physical stocktaking, the value of trading inventory on hand on 28

February 2018 amounted to R158 000.

2. Stationery unused during the accounting period, according to a physical count,

amounted to R1 000.

3. Rent has been received for the period 01 March 2017 to 31 January 2018.

4. The telephone account for February 2018, R1 500, has not yet been paid.

5. An invoice for advertising has been received from a local newspaper but no entry has

been made for this, R5 000.

6. The insurance total includes an insurance premium of R3 000 that was paid for the

period

01 July 2017 to 30 June 2018.

7. Interest on loan unpaid for February 2018 amounted to R1 500.

8. Interest is owing to Jem Traders on the fixed deposit. The investment was made on

01 March 2017.

9. Provide for depreciation on equipment at 20% per year on cost.

10. S. Smith, a debtor, who owed R1 000 was declared insolvent. His account must now

be written off.

11. A payment of R2 000 for water and electricity was erroneously entered in the sundry

expenses account. Correct the error.