wc y, higher education Ly & trainin Department: ) Higher Education and Training REPUBLIC OF SOUTH AFRICA N570(E)(J7)H XG JUNE EXAMINATIO! YD NATIONAL CERT, FINANCIAL AGCOU (4010 7 e 2016 (X-Paper) H 0 x oS of 11 pages and 1 answer book of 9 pages. T Copyright reserved(4010175) 2 N570(E)(J7)H DEPARTMENT OF HIGHER EDUCATION AND TRAINING REPUBLIC OF SOUTH AFRICA NATIONAL CERTIFICATE FINANCIAL ACCOUNTING N5 TIME: 3 HOURS MARKS: 200 INSTRUCTIONS AND INFORMATION 1. Answer ALL the questions. 2. Read ALL the questions carefully. NS 3. Answer ALL the questions in the attached ANSWER 4. Number the answers according to the numiering System this question paper. 5. Write your EXAMINATION NUMBER’ @n every pagaiin the ANSWER BOOK. 6. Show ALL calculations in brackets, were applicable. 7. Financial statements mu: ding to the 2001 Syllabus. 8. Use only BLUE at K 9 Tipp-Ex may NOT bi 10. Write neatly ai ly. o Copyright reserved Please turn over(4010175) “ N570(E)(J7)H QUESTION 1 The following information comes from the financial records of Cadberry Traders with partners Cad and Berry. Pre-adjustment trial balance on30 September 2015 Balance sheet account section: Debit Credit Capital: Cad 0 Berry jo 000 Drawings: Cad 30.080 Berry 2-400 Current, Cad Berry 6 24 Land and buildings Equipment ‘Accumulative depreciation on equipment Loan: Cad 14% per annum Trading stock Debtors control 6 120 132 000 Provision for bad debts 2586 Bank Nominal account section: Sales 1.202 400 Cost of sales 801 600 Stationery 1860 Water and electricity 13 450 Bad debts 1.800 Rent income. 55 400 Insurance: 14.400 Salaries and wa: 160 892 Salary: Cad 25.000 2364746] 2364 746 * The follo was on hand according to a physical stocktaking on = tock, R96 930 — Stationery, R200 A debtor, P. Prince has disappeared and his debt must be written off as irrecoverable, R360. * The provision for bad debts must be adjusted to 6% of the debtors. * The rent increased by R200 on 1 July 2015. The tenant has paid the rent until the ‘end of October 2015. « An insurance premium of R9 840 was paid and recorded on 1 November 2014. This policy expires on 31 October 2015. Copyright reserved Please turn over(4010175) a N570(E)(J7)H * The loan from partner Cad was made on 1 April 2014. On 1 April 2015 R9 000 was repaid. No interest for the year has been paid. + Berry increased his capital contribution by giving computer equipment valued at R15 000 to the business on 1 July 2015. This has been properly recorded + Depreciation for the year must be written off equipment at 10% of the cost price. The partnership agreement specifies (inter alia) the following: a) Cad is entitled to an annual salary of R63 000, b) Berry is entitled to a monthly salary of R1 400 more per month than that Of Cad, because of managerial duties ¢c) Interest on capital must be brought into account at 6% per annum. d) Partners are debited or credited with interest at 10% per annum their current accounts at the beginning of the year. ) Interest on drawings is calculated at 12.5% per annum. Thétola drawn on 1 April 2015. Remaining profit shared in proportion to partners’ capitalgontriButior e beginning of the year. REQUIRED: 1.1 Income statement of Cadberry as ending 30 September 2015 (42) es S& Copyright reserved Please turn over(4010175) < N570(E)(J7)H QUESTION 2 21 Lisela Stores of Bramley has a branch in Bethulie. The head office supplied all trading stock to the branch at cost price and received regular summaries from the branch. Cash received is transferred to the bank account of the head office at the end of each month after an advance of R5 000 has been retained. ‘Stock at branch on 1 September 2014 Branch debtors on 1 September 2014 Branch bank on 1 September 2014 Branch computer equipment on 1 September 2074 Branch accumulated depreciation on 1 September 2014 ‘Summary of transactions for the year ended 31 Au ‘Goods supplied by head office Cash sales Credit sales Retums to head office Cash received from debtors 161 690 13.070 170 620 Expenses paid by the branch: Packing material Salaries and wages 2510 81 600 Head office paid the foll ombehalf of the branch: Water and electrici ‘Computer equi 25 250 40 400 Insurance 5 480 Adjustments: LI «The stoc Is On, 3 MAU 2015 revealed the following: * R840 is still owing to a casual worker Copyright reserved Please turn over(4010175) “ N570(E)(J7)H Use the information to draw up the required accounts in the books of the head office at the end of their financial period ending 31 Augustus 2015. 24.4 Branch stock (7) 2.4.2 Branch debtors (4) 24.3 Branch bank (7) 2.1.4 Goods to branch (3) 2.4.5 Branch Profit and loss (14) 22 Mamba Dealers has a branch in Embali and Wadeville. On 16 February 2015 the Wadeville branch ser branch in Embali, which received it on 17 February On 27 February 2015 the head office sent(Stoc! Embali, but the branch had not yet re the’ were closed on 28 February 2015. REQUIRED: Show the entries of these twOttransactions: jeneral journal of the branch in Embaii. (8) We 140] QUESTION 3 During Septembei ers Rad the following transactions with respect to one of their product Septemben 201 7 nh 34 units @ R20 7 Purchas 48 units @ R22 14 ‘ 29 units @ R40 19 Sol 22 units @ R41 22 sed 42 units @ R24 26 Sold 14 units @ R42 29 Sold 32 units @ R42 Copyright reserved Please turn over(4010175) 5 N570(E)(J7)H REQUIRED: Enter the information on the stock cards if the following stock systems were used: 3.1 FIFO (19) 3.2 Average cost price (21) [40] QUESTION 4 4.1 The owner of Corx Traders informs you that no proper tingpre were maintained for the two financial years ended 28 Fel 014 a 2015. He can however provide the following financial 2014 — Loan 8000 Bank (Favourable) g 4572 Equipment at cost 29 400 ‘Accumulated depreciation on equip 14.345 Prepaid expense 2996 Accrued expense 1126 Investment 4000 Debtors 17.040 Creditors 7680 Trading stock 64 080 Cash float 1500 REQUIRED: 444 ler requests you to draw up a financial statement to late hi profit for the year ended 28 February 2015, iMiatind that he had withdrawn R4 200 during the year. (16) only note required is that for equity (5) Copyright reserved Please turn over(4010175) + N570(E)(J7)H 4.2 The following information from the financial records of BB Stores who did not keep full records of transactions were available at the end of the financial year, 28 February 2015: Debtors 04-03-2074 28-02-2015 Creditors 01-03-2014 28-02-2015 Payments to creditors and cash purchases Payments by debtors and cash sales Returns by debtors Returns to creditors Discount allowed to debtors Discount received from creditors ADDITIONAL INFORMATION: A debtor who owed R5 200 was declared i nt. ale paid 35% of his debt, and this has been added to payments By, deb’ he remaining balance must be written off as a bad debt: REQUIRED: Show the following in the general ledger of BB Storgs forjthe year ended 28 February 2015: 4.24 Debtors’ contro! 4.2.2 Credit 1 43 The followi occufféd in the journals of a retailer who makes use of the pei ad. The errors where discovered after the journals had been cl of'an invoice for merchandise bought on credit from Sam Co, Was R800; the correct total is R700. wages column in the cash payments journal was added ‘correctly as R400 instead of R450 and posted to the wages account as such. REQUIRED: Correct these errors by means of general journal entries. Narrations are not required. (8) (6) (3) (2) [40] Copyright reserved Please turn over(4010175) < N570(E)(J7)H QUESTION 5 The following information was extracted from the accounting records of a trader on 28 February 2015: Extracts from the income statement: Total sales 217 750 Cost of sales 124 430. Net profit, 54 430 After the capital account had been credited with the above net profit, the balance sheet reflected the following balances: Land and buildings Equipment at carrying value Long term loan Investment Current assets Creditors control Debtors control ADDITIONAL INFORMATION: 3. Similar industries in havVe a stock turnover rate of 3 times per annum. REQUIRED: the business for 2015, the first year of trading. 51 Calc fit percentage on turnover rs collection period (in days) (8% 2) (10) Copyright reserved Please turn over(4010175) 10- N570(E)(J7)H 5.2 Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A-D) next to the question number (5.2.1—5.1.5) in the ANSWER BOOK. 5.2.1 5.2.2 5.2.3 5.2.4 Copyright reserved The formula for solvency ratio is: A 134900 75 600 B 449 200 134 800 C 394 600 134 800 D 519.200 YS 373 600 The formula for Acid test ratio is; A Current assets: Currey B Total assets: Total lial C Current assets minus D Total assets minus stock: Total Return on owners’ equity is equal 0: A 173: B17, 6 7.31 had a Stock turnover rate of two times per annum is 'SWorse than similar industries in South Africa the same as similar industries in South Africa C “his is better than similar industries in South Africa iliti nt Hiabilities ilities + calculation it was found that the business paid their creditors fter 80 days. A. This is unacceptable for the creditors B This is acceptable for the creditors (6x2) (10) Please turn over(4010175) ote N570(E)(J7)H 5.3 Write the answers to the following questions in rand value. NO calculations must be shown. 5.3.1 The value of total assets is . 5.3.2 Cash sales equals... 5.3.3 Current liabilities equals .... 5.3.4 Stock equals ... 5.3.5 Operating expenses equals ... (sales is the only i ) (5: (10) [30] \S fh. am QR & Copyright reserved