CENTRE FOR ENTREPRENEURIAL DEVELOPMENTexampapers.nust.na/greenstone3/sites/localsite... · 1.1...
Transcript of CENTRE FOR ENTREPRENEURIAL DEVELOPMENTexampapers.nust.na/greenstone3/sites/localsite... · 1.1...
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FIRITIIBIFI UFIIVERSITY
OF SCIENCE enD TECHNOLOGY
CENTRE FOR ENTREPRENEURIAL DEVELOPMENT
COMMERCIAL ADVANCED TRAINING SCHEME (CATS)
COURSE CODE: PRAZlZS COURSE NAME: PRACTICAL ACCOUNTING 28
SESSION: JULY 2017 PAPER: THEORY
DURATION: 2 HOURS MARKS: 100
SUPPLEMENTARY EXAMINATION QUESTION PAPER
EXAMINER(S) z. MARITZ
MODERATOR: E. KANGOOTUI
INSTRUCTIONS
1. Answer ALL FOUR questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Non programmable calculator
THIS QUESTION PAPER CONSISTS OF 4 PAGES (including this front page)
Question 1 (35 Marks)
Trial balance of Natalie Enterprises at 28 February 2017
Capital 174 000
Drawings 5 000
Land and Buildings 240 000
Equipment 30 000
Accumulated depreciation: Equipment 10 000
Bank 1 500
Inventory 15 000
Accounts receivable and payable 20 000 30 000
Allowance for credit losses 3 000
Sales 120 500
Cost of sales 60 000
Sales returns 500
Salaries and wages 20 000
Stationery 2 000
Insurance 3 500
Rent Received 60 000
Credit losses 1 500
Discount received 1 500
Additional Information
On 28 February 2017, Natalie Enterprises had stationery to the value of N$500 on
hand.
Included in insurance is an annual premium of N$1 200 paid on a policy for the 12
months ended 31St August 2017.
Another N$2 000 must be written off as a bad debt.
From 1St March 2016, Excelsior Trading rent a building from Natalie Enterprises at N$4
000 per month. On 1 March 2016 an amount of N$60 000 was received from Excelsior
Trading.The allowance for credit losses must be adjusted to 10% of the outstanding accounts
receivable.
Depreciation on equipment is written off at 10% pa on the reducing balance method.
On 28 February 2017 salaries of N$10 000 were still outstanding.
Required:
1.1 Journalise the adjustments (narrations are not required) (18 marks)
1.2 Prepare the statement of profit or loss and other comprehensive income for the year
ending 28 February 2017 (17 marks).
Question 2 (37 Marks)
SU Timbers submits the following information relating to time tickets of workers for the
month:
Name Job station Basic hourly Hours worked Overtime
rate normal rate
8. Steyn Packaging 60 160 32
R. Randa Procurement 100 160 24
W. Bartch Sales 80 160 28
Additional information:
o Overtime is remunerated at 1.5% of the normal hourly rate.
. The following are deducted from remuneration:
0 Income tax at 18%;. Pension at 7% of basic salam, SU Timbers pays the same amount;
. Medical Aid at N$500 per person per week and;
. Social Security at 1% of basic salary, with a maximum of N$80, SU Timbers pays the
same amount.
. Pension fund contributions are deductible from income for income tax purposes,
therefore tax is calculated on the amount net from pension fund contribution.
Required:
2.1 Prepare a payroll with all the detailed information regarding gross wages, deductions and
net wages for the week (27 marks).
2.2 Prepare the journal entries regarding the payroll (10 marks)
Round all amounts off to the nearest N$.
Question 3 (18 Marks)
After comparing the cashbook for May 2017 and bank reconciliation for April 2017 of G.
Giant with their bank statement at 31st May 2017, the following differences were found.
. Debit balance of the bank account in general ledger at 31 May 2017 5 869
. Favourable balance as per bank statement at 31 May 2017 7 394
. Items that appeared on the bank reconciliation for April 2017 but not on the bank
statement for May 2017:
Cheque 214 issued to a payable on 28 April 2017 202
0 Items that appeared in the cash receipts and cash payment journals but not on the
bank statement:
A deposit by Giant on 30 May 2017 4 833
Cheque nr 288 619
0 Items that appeared on the bank statement but not in the cash journals:
Bank charges 53
Interest on overdraft 72
A stop order in respect of a monthly donation to NUST 300
An R/D cheque originally received from Silver 440
A deposit paid directly in Giant’s bank account by Gold, a receivable 2 800
- Cheque Nr 197 for N$345 issued on 15 January 2017 is stale and must be cancelled.
The cheque was issued to Cloud for advertising services.
c The bank credited, erroneously, the account of Giant with a deposit of N$3 707.
. Cheque 273 issued to a payable for N81 850 was erroneously entered in the cash
payment journal as N81 400.
Required:
3.1 Prepare the supplementary bank account as on 315‘ May 2017 (11 marks)
3.2 Prepare the bank reconciliation as on 31St May 2017 (Commence your answer with the
balance as on the bank statement) (7 Marks)
Question 4 (10 Marks)
Classify the following items as Assets (A), Liabilities (L), Income (I) or expenses (E):
1 Capital2. Accrued Income
3. Accrued expenses
4. Credit losses
5. Accounts payable6. Investment
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