Financial Accounting Tutorial Letter Breakdown

FAC1601/101/3/2014
Tutorial letter 101/3/2014

Financial Accounting Reporting

FAC1601

Semesters 1 & 2

Department of Financial Accounting

IMPORTANT INFORMATION:
This tutorial letter contains important information
about your module.

2

CONTENTS

Page
1 INTRODUCTION AND WELCOME .............................................................................................. 3
2 PURPOSE AND OUTCOMES OF THE MODULE ........................................................................ 3
3 COMMUNICATION WITH YOUR LECTURERS ........................................................................... 4
4 COMMUNICATION WITH THE UNIVERSITY ............................................................................... 4
5 STUDY MATERIAL ...................................................................................................................... 4
5.1 Inventory letter ............................................................................................................................ 4
5.2 Study material ............................................................................................................................. 5
6 STUDENT SUPPORT SERVICES ................................................................................................ 5
6.1 Contact with fellow students ...................................................................................................... 5
6.1.1 Study groups ............................................................................................................................... 5
6.1.2 myUNISA ..................................................................................................................................... 5
6.2 Tutor assistance ......................................................................................................................... 6
7 ASSESSMENT ............................................................................................................................. 8
7.1 Assignments and learning ......................................................................................................... 8
7.2 General remarks .......................................................................................................................... 8
7.3 Feedback on assignments ......................................................................................................... 9
7.4 Study process ............................................................................................................................. 9
7.5 Important aspects regarding assignments ............................................................................. 11
7.6 Finality of the due dates ........................................................................................................... 11
7.7 Assessment of assignments .................................................................................................... 11
8 EXAMINATION ........................................................................................................................... 11
8.1 Examination admission ............................................................................................................ 11
8.2 Year mark and final examination mark .................................................................................... 12
8.3 Examination period ................................................................................................................... 13
8.4 Examination paper .................................................................................................................... 13
8.5 Previous examination papers................................................................................................... 13
8.6 Tutorial letter with information on the examination ............................................................... 13
9 PROPOSED STUDY PROGRAMME FOR 2014 ......................................................................... 14
9.1 First semester ........................................................................................................................... 14
9.2 Second semester ...................................................................................................................... 14
10 ANNEXURES
ANNEXURE A Assignment 01 (compulsory) first semester .......................................................... 15
ANNEXURE B Assignment 02 (compulsory) first semester .......................................................... 21
ANNEXURE C Assignment 01 (compulsory) second semester ..................................................... 28
ANNEXURE D Assignment 02 (compulsory) second semester ..................................................... 36
FAC1601/101
3
1. INTRODUCTION AND WELCOME

We are pleased to welcome you to this module and hope that you will find it both interesting and
rewarding. We will do our best to make your study of this module successful. You will be well on your
way to success if you start studying early in the semester and resolve to do the assignments properly.

You will receive a number of tutorial letters during the year. A tutorial letter is our way of
communicating with you about teaching, learning and assessment.

This tutorial letter contains important information about the scheme of work, resources and
assignments for this module. We urge you to read it carefully and to keep it at hand when working
through the study material, preparing the assignments, preparing for the examination and addressing
questions to your lecturers.

Please read Tutorial Letter 301 in combination with this tutorial letter as it gives you an idea of
generally important information when studying at a distance and within a particular College.

In this tutorial letter, you will find the assignments and assessment criteria as well as instructions on
the preparation and submission of the assignments. It also provides all the information you need with
regard to the prescribed study material and other resources and how to obtain them. Please study this
information carefully and make sure that you obtain the prescribed material as soon as possible.

Right from the start we would like to point out that you must read all the tutorial letters you receive
during the semester immediately and carefully, as they always contain important and, sometimes,
urgent information. You will also find useful information of a general nature in Tutorial Letter 301 and
in the booklet mySTUDIES@Unisa. Having read through these, you should be well prepared to begin.

We hope that you will enjoy this module and wish you all the best!

2. PURPOSE AND OUTCOMES OF THE MODULE

The purpose of this module is to introduce students to financial accounting and reporting referring to
some of the International Accounting Standards issued by the International Accounting Standards
Board. In this course the focus of financial reporting and the analysis of financial statements are on
partnerships and close corporations. You must also be able to record the accounting entries for the
formation of, admittance to, retirement or death of a partner and the liquidation of partnerships.
Further, you must be able to record the accounting entries to the capital structure of companies, be
able to record the transactions relating to businesses with branches. Lastly, you must be able to
prepare calculations relating to the time value of money.

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3. COMMUNICATION WITH YOUR LECTURERS

The lecturers responsible for this module:

Mr MT Hlongoane
Mrs FM Osman
Mr A Eysele
Mr J van Staden
Mrs B Ntoyanto-Ceki

Module Telephone Number: 012 429 4176
Module E-mail Address: fac1601@unisa.ac.za

All queries that are not of a purely administrative nature but are about the content of this module
should be directed to us. Please have your study material with you when you contact us.

Email and telephone numbers are included above but you might also want to write to us. Letters
should be sent to:

The module leader (FAC1601)
Department of Financial Accounting
PO Box 392
UNISA
0003

NB: Letters to lecturers may not be enclosed with or inserted into assignments.

4. COMMUNICATION WITH THE UNIVERSITY

If you need to contact the university about matters not related to the content of this module, please
consult the publication mySTUDIES@Unisa, which you received with your study material. This
brochure contains information on how to contact the university (e.g. to whom you can write for different
queries, important telephone and fax numbers, addresses and details of the times certain facilities are
open).

5. STUDY MATERIAL

5.1 Inventory letter

You should have received an inventory letter telling you what you have received in your study package
and also showing items that are still outstanding. Also see the brochure entitled mySTUDIES@Unisa.

Check the study material that you have received against the inventory letter. You should have
received all the items listed in the letter, unless there is a statement like out of stock or not
available. If any item is missing, follow the instructions on the back of the inventory letter without
delay.

PLEASE NOTE

Your lecturers cannot help you with missing study material. For enquiries about your study
material, please contact the UNISA dispatch department by sending an sms to 43579 or by
e-mail at despatch@unisa.ac.za.
FAC1601/101
5
5.2 Study material

The department of despatch should supply you with the following study material for this module:

One study guide
Tutorial Letters 101 and 301 at registration and others later

Apart from Tutorial Letters 101 and 301, you will also receive other tutorial letters during the semester.
These tutorial letters will not necessarily be available at the time of registration, but will be despatched
to you as soon as they are available or needed (for instance, for feedback on assignments).

If you have access to the internet, you can view the study guides and tutorial letters for the modules
for which you are registered on the universitys online campus, myUnisa, at http://myunisa.ac.za.

Prescribed textbook

Your prescribed textbook for this module is:

About Financial Accounting, Volume 2, 4
th
Edition by Berry PR, et al. LexisNexisButterworths.
Durban. 2011.

Please consult the list of official booksellers and their addresses listed in mySTUDIES@Unisa. If you
have any difficulty obtaining books from these bookshops, please contact the Prescribed Books
Section.

6. STUDENT SUPPORT SERVICES

For information on the various student support systems and services available at Unisa (e.g. student
counselling, tutorial classes, language support), please consult the publication mySTUDIES@Unisa,
which you received with your study material.

6.1 Contact with fellow students

6.1.1 Study groups

It is advisable to have contact with fellow students. One way to do this is to form study groups. The
addresses of students in your area may be obtained from the following department:

Directorate: Student Administration and Registration
PO Box 392
UNISA
0003

6.1.2 myUNISA

If you have access to a computer that is linked to the internet, you can quickly access resources and
information at the university. The myUnisa learning management system is Unisa's online campus that
will help you to communicate with your lecturers, with other students and with the administrative
departments of Unisa all through the computer and the internet.

To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click
on the Login to myUnisa link on the right-hand side of the screen. This should take you to the
myUnisa website. You can also go there directly by typing http://my.unisa.ac.za.

Please consult the publication mySTUDIES@Unisa, which you received with your study material, for
more information on myUnisa.

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6.2 Tutor assistance

Students are also provided with tutorial services at various learning centres. For more information,
please contact the learning centre situated next to you.

Students who are interested in tutor assistance can obtain the telephone numbers and details
from the learning centres.
REGION: PHYSICAL ADDRESS CONTACT DETAILS: TUTORIAL
SERVICES
NORTH-EASTERN
POLOKWANE
23A Landros Mare Street
Polokwane, 0742
(015) 290-3443
Also Giyani and Makhado

NELSPRUIT
Standard Bank Centre: 1st Floor
31 Brown Street
Nelspruit, 1201
(013) 755-2476

MIDDLEBURG
Cnr Church & Bhimy Damane Str
Town Square Building
Ground Floor
Middleburg, 1050
(013) 282-4115

GAUTENG
THUTONG (Sunnyside)
Cnr Walker & Joubert Streets
Sunnyside, 0002
(012) 441-5792/5794/5796

JOHANNESBURG
Tutorial Services Office
29 Rissik Street
Bram-Fischer Building
Johannesburg, 2001
(011) 630-4512/4504/4514
FLORIDA
Cnr Christiaan de Wet/Pioneer Ave.
F-Block Room 5-20
Florida
(011) 471-2082
(011) 471-2298

BENONI
Unisa Ekurhuleni Regional Service Centre
Cor. R51 & Brazil Streets,
Daveyton
(011) 845-9306/00

VAAL
Hangar Building 1
st
floor
C/O Rhodes & Voortrekker streets
Vereeniging, 1939
016 455 6300

KWA-ZULU NATAL
DURBAN
Rooms 305/505/605
Durban Learning Centre
221 Dr Pixley kaSeme (West) Street
Durban, 4001
(031) 335 8110/11/27/30/31

FAC1601/101
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SERVICES

Room1B5, Ground floor
230 Stalwart Simelane(Stanger) Street
Durban, 4001

(031) 335 1749/50/51

RICHARDS BAY
Lot 100637
Block C, Via Verbana
Veldenvlei
Richards Bay, 3900
(035) 789 3501/8405

WILD COAST (MBIZANA)
c/o Wild Coast Sun
Main Road
Mzamba Beach, Bizana
(039) 305 6433

PIETERMARITZBURG
Reid Building (room 204/205/206)
1 LangalibaleleStr
Pietermaritzburg, 3201
(033) 355-1734
(033) 355-1735

NEWCASTLE
Cnr Sutherland and Harding Str
Newcastle, 2940
(031) 335 8127
(034) 326 3105

CAPE COASTAL
PAROW
15 Jean Simonis Street
Parow, 7499
(021) 936-4190/4154

GEORGE
Joubert Plaza 1
100 Meade Street
George, 6530
(044) 884 1300
MTHATHA
32 Cnr Victoria & York Rd
Economic Affairs Building
Umtata, 5100
(047) 531-5002/3/6/7
also
Lusikisiki and Mt Frere
EAST LONDON
10 St Lukes Road
Southernwood
East London, 5201
(043) 743-9246
also
King Williams Town, Butterworth,
Queenstown
PORT ELIZABETH
Corner of Greyville and Ring Roads
Green Acres
Port Elizabeth, 6045
(041) 363 1070

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SERVICES
MIDLANDS
MAFIKENG
29 Main Street
Opposite ABSA Bank, Mafikeng
Mafikeng, 2745
(018) 381-6617/7318

RUSTENBURG
Forum Building (1
st
Floor)
Cnr. OR Tambo & Steen Street
Rustenburg, 0300
(014) 594 8800/8856

POTCHEFSTROOM
20 Auret Street
Potchefstroom, 2531
(018) 294 3362/3341

KIMBERLEY
NIHE Main Campus
Cnr Chapel & Eureka Streets
Kimberley, 8301
(053) 832 6391/7083

BLOEMFONTEIN
NRE House
161 Zastron Street
Bloemfontein, 9301
(051) 411-0452

KROONSTAD
NFS Building 1
st
floor
36 Brand Street
Kroonstad, 9499
(056) 213-2053/4

7. ASSESSMENT

7.1 Assignments and learning

Assignments are seen as part of the learning process for this module. As you do the assignment,
study the reading text, consult other resources, discuss the work with fellow students or tutors or do
research, you are actively engaged in learning. Looking at the assessment criteria given for each
assignment will help you to understand what is required of you more clearly.

7.2 General remarks

Enquiries about assignments (e.g. whether or not the university has received your assignment or the
date on which an assignment was returned to you) must be directed to the assignments department.
This department can be reached by sending an SMS to 43584 or by e-mail at assign@unisa.ac.za.
You might also find information on myUNISA. To go to the myUnisa website, start at the main Unisa
website, http://www.unisa.ac.za, and then click on the login to myUnisa link under the myUnisa
heading on the screen. This should take you to the myUnisa website. You can also go there directly by
typing http://my.unisa.ac.za.

Assignments should be addressed to:
The Registrar (Assignments)
FAC1601/101
9
PO Box 392
UNISA
0003

You may submit written assignments and assignments done on mark-reading sheets either by post or
electronically via myUNISA. Assignments may not be submitted by fax or email. For detailed
information and requirements as far as assignments are concerned, see the brochure
mySTUDIES@Unisa, which you received with your study material.
To submit an assignment through myUNISA:

Go to myUnisa.
Log in with your student number and password.
Select the module.
Click on assignments in the menu on the left.
Click on the assignment number you want to submit.
Follow the instructions on the screen.

7.3 Feedback on assignments

You will receive the correct answers automatically for multiple-choice questions. Feedback on
compulsory assignments will be sent to all students registered for this module in a follow-up
tutorial letter, and not only to those students who submitted the assignments. The tutorial letter
number will be 201, 202, etc.

As soon as you have received the feedback, please work through it. The assignments and the
feedback on these assignments constitute an important part of your learning and should help you to
be better prepared for the next assignment and the examination.

7.4 Study process

You may encounter fewer problems when you work as follows:

Paragraph 8 of this tutorial letter sets out the suggested study programme for semester 1 and 2. First
semester students: refer to paragraph 8.1 and second semester students: refer to paragraph 8.2.

Study the relevant study units of the Study Guide for assignment 01. Do all the exercises in the
study guide and make sure that you understand the contents of the study material.

Do assignment 01 and send it to UNISA for marking. Remember, the submission of
assignment 01 is compulsory for examination admission and contributes to your year mark
(refer to paragraph 6).

Study the relevant study units of the Study Guide for assignment 02 and do the assignment.
Remember, the submission of assignment 02 is compulsory and contributes to your year
mark (refer to paragraph 6).

After completing an assignment, carry on with the study programme. Do not wait for the
suggested solution or for the return of the marked assignment.

Students often fail to plan their studies properly in order to achieve specific study goals at
predetermined dates. This leads to a haphazard approach to studying and the use of ineffective study
techniques.

The study programme for each semester is herein provided to assist you in this regard. The
programme indicates the dates during which certain sections of the study material should be studied,
as well as the dates by which the compulsory assignments should be completed.

The study programme is based on the following assumptions:

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That study will commence on either 13 January 2014 for the first semester or 30 June 2014 for
the second semester and that the course should be completed leaving sufficient time for
revision.

That you should study at least 6 hours per week. We are of the opinion that this is within your
reach.

We are convinced that, if you adhere to the suggested programme, you should be able to master the
subject. It is very important that the subject matter covered in the study units should be mastered and
not just be skimmed. If you happen to register late or fall behind with this programme, extra effort on
your part will be necessary.

Appendix A and B contains the compulsory assignment 01 and 02 for students who are registered for
FAC1601 in the first semester.

Appendix C and D contains the compulsory assignment 01 and 02 for students who are registered for
FAC1601 in the second semester.

Please note that these assignments are not the same. You must ensure that you submit the
assignments which pertain to the semester that you are registered in for FAC1601.

IF YOU ARE REGISTERED FOR FAC1601 IN THE SECOND SEMESTER YOU CANNOT SUBMIT
ANY ASSIGNMENTS DURING THE FIRST SEMESTER. ASSIGNMENTS INCORRECTLY
SUBMITTED WILL RETURNED UNMARKED
FAC1601/101
11
7.5 Important aspects regarding assignments

There are 4 assignments for this module:

Assignment 01 is a multiple choice assignment that is compulsory and contributes 50%
towards your year mark. It is important to note that if you do not submit this assignment
you will not be admitted to the examination;

Assignment 02 is a multiple choice assignment that is also compulsory, and contributes 50%
towards your year mark;

Assignments 03 and 04 are long question assignments. These assignments must NOT be
submitted to UNISA for marking but forms an important part of your study material and exam
questions will definitely be set on these sections.

Please keep copies of assignments submitted through myUnisa as this is proof that you submitted the
assignment.

Assignments constitute an integral part of the tutorial matter. Study material on which assignments are
based is given in Annexure A (for students registered for the first semester) or Annexure C (for
students registered for the second semester). Assignments and tutorial letters must also be studied for
examination purposes.

7.6 Finality of the due dates

The receipt of assignments after the due date disrupts our marking programme and the uncontrolled
submission of assignments creates administrative problems. No extension will be granted for the
submission of assignments and regrettably requests for the extension of the due date will NOT be
considered.

7.7 Assessment of assignments

Although students may work together when preparing assignments, each student must submit his or
her own individual assignment. It is unacceptable for students to discuss the answers on myUnisa.
That is copying (a form of plagiarism) and you may be penalised or subjected to disciplinary
proceedings by the university.

8. EXAMINATIONS

For general information and requirements as far as assignments are concerned, see the brochure
mySTUDIES@Unisa, which you received with your study material.

8.1 Examination admission

For students to fully benefit from our formative tuition and assessment, the Management of the
university has taken a decision to introduce two compulsory assignments in all modules to be
submitted by set due dates. Submission of the first compulsory assignment by its due date will give a
student admission to the examination in the particular module and the mark obtained for that
assignment will contribute towards the final mark for that module. The second assignment is also
compulsory and contributes equally to the final mark.

Please ensure that the compulsory assignments reaches the University before the due date as late
submission of assignment 01 will result in you not being admitted to the examination.

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8.2 Year-mark and final examination mark

The year-mark contribution towards the final examination mark is calculated as follows:

50% of the mark obtained for assignment 01
Plus
50% of the mark obtained for assignment 02

If you only submit assignment 01, your year mark will be 50% of the mark obtained for this
assignment. This will then be your year mark out of a possible 100%. If, for example, you obtain 80%
for assignment 01 and 0% for assignment 02, your year mark will be 40%.

According to university policy you require a sub-minimum of 40% in the examination before your year
mark is taken into consideration. In other words, if you do not obtain at least 40% in the examination,
you will automatically fail, and your final mark will be the mark you obtained in the examination.

A final mark of 50% is required to pass this module. This final mark is calculated as follows:

(10% x of the year mark) + (90% x mark obtained in the examination)

Example:
A B C D

Average of marks
for assignment
1 & 2
(Year mark)
Year mark
contribution to
final
mark at 10%
Exam mark
contribution
required to pass
(50% minus
year mark
contribution)
Minimum exam
mark required to
pass
(C 0,9)
Student 1 100% 10% 40% 45%
Student 2 70% 7% 43% 48%
Student 3 50% 5% 45% 50%
Student 4 30% 3% 47% 52%
Student 5 20% 2% 48% 53%
Student 6 10% 1% 49% 54%
Student 7 0% 0% 50% 56%

If you obtain between 40% and 49% as a final mark, you will be allowed to write a supplementary
examination. The supplementary examination will be written at the end of the next semester. This
means that if you qualify for a supplementary examination in May/June, you will write the FAC1601
paper in October/November. Similarly, students who qualify for a supplementary examination in
October/November will write this paper in May/June of the following year. A student may, however,
write only one supplementary examination per enrolment.

If, for any reason, you transfer your exam period for FAC1601 to a following semester, you need to
submit Assignment 01 and 02 before the due date in the semester for which you originally registered
for the course. The year mark you obtain will then be carried forward to the next semester because
you will not be allowed to submit any assignments in the semester to which you have changed. By
applying to have your semester changed to a following semester, in effect, you are applying for an
aegrotat examination. However, you still need a year mark that will be taken into account as explained
above hence the need to submit the compulsory assignments in the semester for which you
originally registered.
FAC1601/101
13
8.3 Examination period

This module is offered in a semester period of 15 weeks. This means that if you are registered for the
first semester, you will write the examination in May/June 2014 and the supplementary examination
will be written in October/November 2014. If you are registered for the second semester, you will write
the examination in October/November 2014 and the supplementary examination will be written in
May/June 2015.

During the semester, the Examination Section will provide you with information regarding the
examination in general, examination venues, examination dates and examination times. This
information can also be obtained from the myUnisa site. Click on Examinations when you are logged
into the site.

8.4 Examination paper

At the end of the semester you will be required to write a two hour examination paper. No theoretical
or multiple choice questions will be asked. You will only be required to apply the theoretical knowledge
acquired in the questions asked. Exam questions are set on the content of the whole course not only
on assignments 1 and 2.

You are advised to consult the examination time-table timeously in order to plan your revision
programme accordingly. Please start early to avoid cramming at the last moment.

8.5 Previous examination papers

There will be no previous years examination papers to be made available to students as part of
tutorial or study material. However, additional questions will be provided in a form of a tutorial letter.
These questions will be of same standard with the examination questions. We advise you, however,
not to focus only on these questions as your only source in your preparation for the examination as the
content of examination paper changes from year to year. You may, however, accept that the type of
questions that will be asked in the examination will be similar to those asked in the activities in your
study guide and in the assignments.

8.6 Tutorial letter with information on the examination

To help you in your preparation for the examination, you will receive a tutorial letter that will explain the
format of the examination paper and set out what and how to study for examination purposes.

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9. PROPOSED STUDY PROGRAMME FOR 2014

9.1 First semester
DATE STUDY MATERIAL AND ASSIGNMENTS
13/1 to 13/2 Study: Study units 1 to 5
14/2 to 17/2 Do Assignment 01 (compulsory assignment): Due date 14/03/2014
17/2 Submit Assignment 01 (NB: DO NOT WAIT UNTIL 14/03/2014)
31/3 to 04/4 Do and mark Assignment 03 (do not submit this assignment)
The solutions to Assignments 03 and 04 are provided in the same
tutorial letter
14/4 to examination Revision
During May/June 2014: EXAMINATION

9.2 Second semester
DATE STUDY MATERIAL AND ASSIGNMENTS
The solutions to Assignments 03 and 04 are provided in the same
tutorial letter
15/9 to examination Revision
During October/November 2014: EXAMINATION

We hope that you will enjoy this module and we wish you success with your studies.

Kind regards

Mr M Hlongoane
Mrs FM Osman
Mr A Eysele
Mr J van Staden
Mrs B Ntoyanto-Ceki

LECTURERS: FINANCIAL ACCOUNTING REPORTING (FAC1601)
FAC1601/101
15
ANNEXURE A COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (FIRST SEMESTER 2014)

UNIQUE NO: 856974

DUE DATE: 14 MARCH 2014

1. This assignment must be answered on a mark-reading sheet if submitted by post. It can also
be submitted electronically through myUnisa.

2. Before answering this assignment, please read paragraphs 7 and 8 of this tutorial letter.

3. This assignment covers study units 1 4 of the study guide.

4. We cannot grant any extension for the late submission of this assignment since the due
date is set in accordance with the marking date of this assignment. Regrettably, no
correspondence or telephone conversations will be conducted in this regard.

5. Important aspects regarding multiple-choice assignments answered on a mark-reading
sheet

For detailed information and requirements as far as assignments are concerned, see
mySTUDIES@Unisa which you received with your study package.

Work carefully through the relevant tutorial matter before you do the assignment.

Calculate your answer on a separate piece of paper before completing the mark-reading
sheet.

REMEMBER:

There is only one correct answer for each question. Do not make more than one mark per
question.
All questions are equal in value.
Indicate your student number correctly.
Indicate the assignment number correctly.
Indicate the unique assignment number for Assignment 01 correctly. Every assignment which
is marked by the computer is given a unique number. The number contains information on the
course code and the assignment number. When the computer reads the unique number, it
classifies it as Assignment 01 for FAC1601 first semester.

FOR HARD COPY SUBMISSION:

Only the provided mark-reading sheets may be used.
Colour in the correct block clearly with a HB pencil.
Do not colour outside the block, or colour in the block with a pen.
Do not make corrections with correction fluid.
Do not tear or fold the mark-reading sheet. Do not try to repair a torn mark-reading sheet with
sticky tape use another one.
Do not staple the mark-reading sheet to another piece of paper.
Do not submit answers on a written sheet of paper.
Send only your mark-reading sheet to the Assignments Division in the appropriate envelope.

16
ASSIGNMENT 01 FIRST SEMESTER (continued)

Question 1

According to the Conceptual Framework (4.59), which one of the following does not form part of
concepts of capital maintenance?

a) Accrual basis capital maintenance
b) Financial capital maintenance
c) Physical capital maintenance

1. a) only
2. a) and b) only
3. a) and c) only
4. b) and c) only
5. None of the above

Given information for questions 2 4

Zak and Adam decided to start a business, trading as Soccer Fanatics. The following information
pertains to the business activities of the partnership for the year ended 30 June 2013:

1. Trial balance as at 30 June 2013
R
Capital: Zak ............................................................................................................................. 187 500
Capital: Adam .......................................................................................................................... 187 500
Current Account: Zak (Cr; 1 July 2012) .................................................................................... 13 875
Current Account: Adam (Dr; 1 July 2012) ................................................................................ 10 875
Drawings: Zak.......................................................................................................................... 89 375
Drawings: Adam ..................................................................................................................... 109 125
Asset replacement reserve ..................................................................................................... 56 250
Mortgage ................................................................................................................................. 187 500
Long-term loan: Zak ................................................................................................................ 50 000
Creditors control ...................................................................................................................... 37 500
Bank (Cr) ................................................................................................................................. 16 875
Land and buildings at cost ....................................................................................................... 775 000
Equipment at cost .................................................................................................................... 107 500
Vehicles at cost ....................................................................................................................... 123 125
Accumulated depreciation: Equipment ..................................................................................... 32 375
Accumulated depreciation: Vehicles ........................................................................................ 62 500
Inventory .................................................................................................................................. 12 500
Debtors control ........................................................................................................................ 27 500
Allowance for credit losses ...................................................................................................... 21 875
Petty cash ................................................................................................................................ 625
Profit for the year (before additional information) ..................................................................... 421 563

2. Terms of the partnership agreement:

2.1 Interest is calculated at 10% per annum on the opening balances of the partners capital and
current accounts

2.2 Both partners are entitled to a salary of R87 500 per annum

3. Additional information:

3.1 The long-term loan from Premier Bank was acquired on 1 July 2012 and bears interest at a
rate of 10% per annum, payable on at the end of July every year. The loan is secured by a first
FAC1601/101
17
ASSIGNMENT 01 - FIRST SEMESTER (continued)

mortgage over land and buildings and is repayable in equal instalments over 10 years. The first
repayment is due on 2 July 2013.

3.2 Zak granted an unsecured loan to the partnership on 1 May 2013. According to the terms of
the loan agreement, interest at 15% per annum will be charged and is payable in December of
every year. The total amount of the loan will be repaid in full on 30 April 2016.

3.3 On 30 June 2013, a cheque was made out to Incredible Computers Ltd for R15 000. This
payment was for the rental of a server from 1 July 2013 to 30 June 2014. The transaction must
still be recorded in the books of the entity.

3.4 During the year each partner received R68 750 as a salary and these amounts were debited to
salaries and wages of the partnership

Question 2

Which one of the following alternatives represents the amount of the total comprehensive income
available for distribution to the partners for the year ended 30 June 2013?

1. R326 563
2. R327 513
3. R326 263
4. R363 763

Question 3

Which one of the following amounts represents the long term borrowings balance disclosed in the
statement of financial position of Soccer Fanatics as at 30 June 2013?

1. R218 750
2. R237 500
3. R168 750
4. R230 750

Question 4

Which one of the following amounts represents the trade and other payables balance disclosed in the
statement of financial position of Soccer Fanatics as at 30 June 2013?

1. R38 750
2. R57 500
3. R37 500
4. R43 750

18

Question 5

On 2 November 2012 Sedisa Trading CC purchased 11 000 preference shares for a consideration of
R33 000 from Mashabane Ltd. Mashabane Ltd was listed on the Johannesburg Securities Exchange
(JSE) since 1 April 2011. Sedisa Trading CC purchased these shares to earn short term profits.
Brokerage fee of R3 000 was paid by Sedisa Trading CC. On 31 October 2013, the market value of
these shares was established on JSE to be R29 730.

Which one of the following amounts will be disclosed as other financial assets in the statement of
financial position of Sedisa Trading CC as at 31 October 2013?

1. R 3 270
2. R36 000
3. R32 730
4. R29 730

Question 6

On 1 January 2013 Andre, Jacques and Moses formed a partnership, each contributing R62 500 as
capital. The financial year of the partnership ends on 31 December. On 1 July 2013 Andre contributed
a further R31 250 as capital and Jacques withdrew R12 500 of his capital. Moses decided to
contribute a vehicle with a value of R25 000 to the partnership on 1 January 2014 as additional capital.
Interest is calculated at 8% per annum on a monthly basis, and is not capitalised.

What was the total interest expense for the partnership in respect of capital for the financial year
ended 31 December 2013?

1. R15 000
2. R19 000
3. R15 750
4. R16 500

Given information for questions 7 9:

Margaret and her neighbor, Dorris, are in a partnership, trading as Simply Delicious Catering; they
share in the profits/losses of the partnership in the ratio of 3:2 respectively. Recently they signed a
catering contract with the local municipality. They urgently needed somebody to join the partnership
who could assist with the preparation of the food and who could provide capital to help sustain the
growth of the business. Mary, another friend of Margaret, offered to join the partnership.

On 31 December 2013 the following list of balances was prepared for Simply Delicious Catering:
R
Capital: Margaret ..................................................................................................................... 181 050
Capital: Dorris .......................................................................................................................... 123 000
Current account: Margaret (Cr) ................................................................................................ 18 750
Current account: Dorris (Dr) ..................................................................................................... 24 300
Asset replacement reserve ...................................................................................................... 37 500
Vehicle at carrying amount ...................................................................................................... 90 000
Equipment at carrying amount ................................................................................................. 14 250
Furniture and fittings at carrying amount .................................................................................. 210 000
Inventory .................................................................................................................................. 25 950
Debtors control (trade debtors) ................................................................................................ 9 750
Bank (Overdraft) ...................................................................................................................... 13 162
Allowance for credit losses ...................................................................................................... 788
FAC1601/101
19

Additional information:

1. It was agreed that Mary will join the partnership on 1 January 2014 and that the new
partnership will trade as Simply Scrumptious Catering. Mary will acquire a third share in the
profits/losses of the new partnership. Margaret and Dorris will relinquish a third share to Mary
according to their existing profit-sharing ratio. On 1 January 2014, Mary will contribute a vehicle
with a value of R150 000 as well as cash to the amount of R112 500 for her third share in the
net assets of the new partnership.

2. In preparation of the change in the ownership structure of Simply Delicious Catering, Margret
and Dorris decided to record the following valuations:
R
Vehicle ........................................................................................................................... 67 500
Equipment ...................................................................................................................... 6 000
Furniture and fittings ....................................................................................................... 333 150
Inventory ........................................................................................................................ 23 250

The allowance for credit losses must be adjusted to 5% of the trade debtors.

Creditors offered an 8% discount for payments made on or before 31 January 2014. Simply
Delicious Catering will settle 60% of its creditors on 15 January 2014 and 20% on
30 January 2014.

Question 7

Which one of the following alternatives represents the balance in the valuation account in the general
ledger of Simply Delicious Catering on 31 December 2013? (All amounts should be rounded up to the
nearest rand)

1. R98 250
2. R90 000
3. R92 700
4. R92 099

Question 8

Which one of the following alternatives represents the balance transferred to the capital account of
Dorris as a result of the revaluation of the partnerships assets and liabilities on 31 December 2013?
(All amounts should be rounded up to the nearest rand)

1. R35 880
2. R37 080
3. R36 000
4. R36 840

Question 9

Which one of the following alternatives represents the goodwill of Simply Delicious Catering as at 31
December 2013? (All amounts should be rounded up to the nearest rand)

1. R99 000
2. R136 500
3. R94 502
4. R96 901

20


Question 10

Nadal, Federer and Jokovich were in a partnership which traded as Grand Slam Traders, and they
shared in the profits and losses of the partnership in the ratio of 1:2:1 respectively. They decided to
liquidate the partnership piecemeal as from 2 January 2013.

The following information pertains to the partnership:

GRAND SLAM TRADERS
TRIAL BALANCE AS AT 31 DECEMBER 2012
Debit
R
Credit
R
Capital: Nadal 10 000
Capital: Federer 20 000
Capital: Jokovich 10 000
Creditors control 18 000
Vehicle at cost 20 000
Accumulated depreciation: Vehicle 12 000
Debtors control (trade debtors) 26 000
Inventory 24 000
70 000 70 000

The partners decided that Federer can take over the vehicle on 2 January 2013 at its carrying amount.
His capital account must be debited accordingly. As soon as sufficient cash becomes available, interim
repayments must be made to the partners in such a manner that no partner will have to make any
repayments thereof to the partnership.

The inventory and trade debtors were realised as follows:

Date Carrying amount Cash proceeds Expenses
31 January 2013 R24 000 (Inventory) R22 000 -
15 February 2013 R26 000 (Debtors control) R23 000 R440

On 1 February 2013 the creditors were paid in full.

Which alternative shows the correct amounts that must be repaid to the partners as interim
repayments on 1 February 2013?

1. Nadal: R1 780; Federer: R0; Jokovich: R1 780
2. Nadal: R2 000; Federer: R0; Jokovich: R2 000
3. Nadal: R5 500; Federer: R11 000; Jokovich: R5 500
4. Nadal: R1 000; Federer: R2 000; Jokovich: R1000

END OF ASSIGNMENT 01 FIRST SEMESTER

FAC1601/101
21
ANNEXURE B COMPULSORY ASSIGNMENT

ASSIGNMENT 02: (FIRST SEMESTER 2014)

UNIQUE NO: 856365

DUE DATE: 11 APRIL 2014





sheet



sheet.

REMEMBER:

question.
classifies it as Assignment 02 for FAC1601 first semester.



22
ASSIGNMENT 02 FIRST SEMESTER (continued)

Given information for questions 1 to 2:

Julia and Lydia are the only members of Travel Easy CC. They have an equal interest in the
corporation and distribute profits accordingly. The following information is extracted from the
accounting records of the CC as at 28 February 2014, the financial year-end of the corporation.

R
Members contribution: Julia .................................................................................................... 80 000
Members contribution: Lydia ................................................................................................... 60 000
Retained earnings (1 March 2013) ........................................................................................... 285 817
Loan from member: Julia (1 March 2013) ................................................................................ 46 900
Loan to member: Lydia ............................................................................................................ 35 250
Inventory ( 1 March 2013) ....................................................................................................... 33 006
Debtors control ........................................................................................................................ 45 900
Bank (Dr) ................................................................................................................................. 36 200
Sales ....................................................................................................................................... 552 262
Investment (Lion Ltd) ............................................................................................................... 130 000
Interim profit distribution paid to members ............................................................................... 40 000
Income received in advance .................................................................................................... 7 330
Prepaid expenses .................................................................................................................... 5 500
Rental income.......................................................................................................................... 36 650
Purchases ...............................................................................................................................
Carriage on purchases ............................................................................................................
300 090
9 450
Administrative, distribution and other expenses ....................................................................... 57 900
Settlement discount on sales ................................................................................................... 5 700
SARS (Income tax) (Dr) ........................................................................................................... 36 348


1. The costs for carriage on purchases were not paid at year end. The closing inventory
amounted to R40 500.

2. The investment in Lion Ltd consist of 80 000 shares bought for R130 000 and was acquired in
February 2012. The investment was acquired for trade purposes, on 15 February 2014 Lion Ltd
declared a dividend of 20 cents per share payable on April 2014. On 28 February 2014 the fair
value of the investment amounted to R170 000.

3. Each member received a monthly salary of R4 500 paid in cash. Lydia the managing member
of Travel CC is entitled to a bonus of R10 000 payable in March 2014. These transactions were
not recorded in the books of the close corporation.

4. The actual income tax for the financial year amounted to R68 900 and must still be recorded.

5. Interest must be recorded on the loan accounts to members at 11% per annum on the opening
balance of any existing loans as well as on any additional loans granted. On 30 September
2013, an additional loan of R18 800 was granted to Lydia and was correctly accounted for in
the books of the close corporation. Interest on the loans to members is capitalized. All loans
are unsecured and immediately callable.

6. Interest on loans from members is calculated at 10% per annum and is not capitalized.
FAC1601/101
23

Question 1

Which one of the following alternatives represents the correct amount that must be disclosed as
retained earnings in the statement of financial position of Travel Easy CC as at 28 February 2014?

1. R375 565
2. R336 164
3. R384 945
4. R384 999

Question 2

Which one of the following alternatives represents the correct amount to be disclosed as trade and
other payables in the statement of financial position of Travel Easy CC as at 28 February 2014?

1. R2268 800
2. R259 330
3. R276 190
4. R283 520


Londs Ltd has a financial year end of 31 January. The company has the following share capital
structure:

Authorised share capital:

500 000 ordinary shares
200 000 10% preference shares

Issued share capital:

350 000 ordinary shares valued at R550 000, 150 000 of these shares remained unchanged for the
full year while the remainder was allotted and issued on 1 January 2014 at a consideration of
R400 000 by an underwriter at a 1.5% commission which was paid on the same date. However,
210 000 applications were received for these shares.

120 000 10% preference shares, 60 000 of these shares remained unchanged for the full year and
were issued for R120 000 while the remainder were allotted and issued on 31 July 2013 at a
consideration of R180 000.

On 31 January 2014, the board of Londs Ltd decided to issue capitalisation shares to ordinary
shareholders in the ratio of 1 share for every 4 ordinary share held at R2,20 per share. The
capitalisation issue to ordinary shareholders was funded from retained earnings. The preference
shareholders were paid a cash dividend.

According to the companys solvency and liquidity test, it had sufficient cash and retained earnings to
pay the dividends to ordinary and preference shareholders.

24

Question 3

Which one of the following alternatives represents the correct amount of commission paid to the
underwriter for the issue of ordinary shares as at 1 January 2014?

1. R2 250
2. R6 000
3. R10 500
4. R3 000

Question 4

Which one of the following alternatives represents the value of the capitalization issue of ordinary
shares for ordinary shareholders and the preference share dividend paid to preference shareholders
for the year ended January 2014?

1. R192 500 and R21 000
2. R82 500 and R10 000
3. R175 000 and R9 000
4. R190 000 and R12 000


The following information was extracted from the accounting records of MVT CC:

MVT CC

EXTRACT OF BALANCES AS AT 28 FEBRUARY 2014
2014 2013
R R

Property, plant and equipment ...................................................................... 154 300 129 300
Investment in SAN ....................................................................................... - 135 000
Inventories .................................................................................................... 18 000 12 000
Trade and other receivables ......................................................................... 30 000 10 000
Prepayments (Rent) ...................................................................................... 900 400
Other financial assets ................................................................................... 14 000 12 000
Cash and cash equivalents ........................................................................... 80 000 4 000
Members contributions ................................................................................. 52 000 52 000
Retained earnings ......................................................................................... 142 500 100 000
Long-term borrowings ................................................................................... 55 200 129 700
Trade and other payables ............................................................................. 30 000 8 000
Current tax payable ...................................................................................... 17 500 13 000

FAC1601/101
25

MVT CC

EXTRACT FROM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2014
R
Revenue ........................................................................................................................... 191 000
Cost of sales ..................................................................................................................... (70 000)
Gross profit .................................................................................................................... 121 000
Dividend income ...............................................................................................................
Profit on sale of investment ..............................................................................................
3 300
15 000
Distribution, administrative and other expenses ................................................................ (59 550)
Depreciation ................................................................................................................... 5 000
Credit losses ................................................................................................................... 5 500
Rent expenses ................................................................................................................ 6 000
Water and electricity ....................................................................................................... 2 500
Salaries and wages......................................................................................................... 40 550
Finance costs ................................................................................................................... (3 000)
Interest on long-term loan ............................................................................................... 3 000

Profit before tax .............................................................................................................. 76 750
Income tax expense .......................................................................................................... (34 250)


1. All sales and purchases are on credit.
2. Other financial assets consist of shares purchased in Mango Ltd.
3. An interim profit distribution of R6 000 was paid during the year.
4. MVT CC uses the indirect method to prepare their statement of cash flows.
5. The allowance for credit losses increased from R10 000 in 28 February 2013 to R15 500 in
February 2014.

Question 5

Which one of the following alternatives represents the amount that must be disclosed as net cash
generated from/(used in) operating activities in the statement of cash flows of MTV CC for the year
ended 28 February 2014?

1. R31 700
2. R37 700
3. R24 500
4. R40 700

Question 6

Which one of the following alternatives represents the correct amount that must be disclosed as
proceeds from sale of investments in investing activities in the statement of cash flows of MVT CC for
the year ended 28 February 2014?

1. R64 500
2. R15 000
3. R135 000
4. R150 000

26

Question 7

Which one of the following alternatives represents the correct amount that must be disclosed as net
cash from financing activities in the statement of cash flows of MVT CC at 28 February 2014?

1. R55 500
2. R71 400
3. R74 500
4. R129 700

Question 8

The following is information is extracted from the accounting records of Abyss Ltd as at
29 February 2014, the end of the financial year:
R
Share capital: ordinary shares ........................................................................................... 200 000
Land and buildings ............................................................................................................. 530 500
Asset replacement reserve ................................................................................................ 30 000
Retained earnings (1 March 2013) ..................................................................................... 98 000
Equipment at cost .............................................................................................................. 200 000
Accumulated depreciation: Equipment ............................................................................... 40 000
Long-term loan ................................................................................................................... 150 000
Debtors control .................................................................................................................. 70 000
Creditors control ................................................................................................................ 20 000
Sales..................................................................................................................................
Allowance for settlement discount granted .........................................................................
350 000
5 500
Profit for the year ............................................................................................................... 108 000

Additional information

1. The corporation is taxed at a rate of 28%.
2. The long-term loan was obtained on 31 October 2013 and bears interest at a rate of 12% per
annum.

Which of the following alternatives represents the correct ratio for return on assets of Abyss Ltd for the
year ended 28 February 2014?

1. 13.42%
2. 14.16%
3. 20.66%
4. 14.06%
5. None of the above.

Question 9

The following information pertains to the head office and the branch of Afsal Ltd:

1. Branch inventory on hand (selling price):
R
1 February 2013 ......................................................................................................... 5 200
31 January 2014 ......................................................................................................... 5 000
FAC1601/101
27

2. Transactions during the year ended 31 January 2014:
R
Inventory sent to branch (selling price) ............................................................................ 156 200
Sales by the branch:
Cash sales ................................................................................................................ 71 600
Credit sales ............................................................................................................... 57 600
Returns to head office (cost price) ................................................................................... 7 400
Cash received from branch debtors ................................................................................. 11 200
Settlement discount granted to branch debtors ................................................................ 1 000
Inventory stolen at the branch (selling price) .................................................................... 7 500
Sundry expenses of the branch paid by head office ......................................................... 18 500


3.1 All inventories are purchased by the head office and supplied to the branch at selling price,
which is cost price plus 25%.

3.2 Due to the current economic downturn, there has been a significant decline in sales at the
branch. As a result, the head office has allowed the branch to sell certain products at selling
price less 30%. The net proceeds of the products sold at discount amounted to R8 400. This
amount is included in the above cash sales figure of R71 600.

3.3 During the year a burglary took place at the branch and R1 400 in cash (in respect of cash
sales) was stolen. No entries regarding the burglary were made in the books.

3.4 Inventory invoiced to the branch at R5 600 included in the above amount of R156 200
pertaining to inventory sent to branch at selling price was in transit at 31 January 2014, and
therefore not included in the branchs inventory on hand of R5 000 at 31 January 2014.

Which of the following alternatives represents the correct surplus / deficit in the branch inventory
account of Afsal Ltd for the year ended 31 January 2014?

1. R20 930 deficit
2. R 5 750 (surplus)
3. R10 750 deficit
4. R 150 (surplus)

Question 10

You are planning to travel to Asia in 2 years time and the travel package will cost you R100 000.
Which of the alternatives represents the correct amount to invest monthly in an investments that yields
12% compounded monthly to yield R100 000 in 2 years time?

1. R 3 707
2. R 4 707
3. R12 847
4. R 846

END OF ASSIGNMENT 02 FIRST SEMESTER

28
ANNEXURE C COMPULSORY ASSIGNMENT

ASSIGNMENT 01: (SECOND SEMESTER 2014)

UNIQUE NO: 794867

DUE DATE: 22 AUGUST 2014





sheet



sheet.

REMEMBER:

question.
classifies it as Assignment 01 for FAC1601 second semester.


FAC1601/101
29
ASSIGNMENT 01 SECOND SEMESTER (continued)

Given information for questions 1 and 2:

D-J Traders is a partnership with Derek and Jeeter as partners. The following information below
pertains to the business activities of the partnership for the year ended 30 June 20.14:

Balances as at 30 June 20.14:
R
Capital: Derek .................................................................................................................... 135 000
Capital: Jeeter .................................................................................................................... 105 000
Current account: Derek (Cr: 1 July 20.13) .......................................................................... 3 750
Current account: Jeeter (Dr: 1 July 20.13) ......................................................................... 1 875
Asset replacement reserve ................................................................................................ 61 000
Drawings (during the year): Derek ..................................................................................... 6 735
Drawings (during the year): Jeeter ..................................................................................... 10 500
Trade and other creditors ................................................................................................... 82 395
Bank (Dr) ........................................................................................................................... 124 860
Inventory (30 June 20.14) .................................................................................................. 33 750
Trade and other receivables .............................................................................................. 57 750
Allowances for credit losses ............................................................................................... 375
Vehicles at cost .................................................................................................................. 144 000
Accumulated depreciation: Vehicles (30 June 20.14) ......................................................... 17 400
Prepayment: Equipment hire .............................................................................................. 58 200
Profit for the year ............................................................................................................... 109 750


All the following information must still be taken into account:

1. Dereks mother-in-law granted a R150 000 loan to the partnership on 30 June 20.14 to enable
them to buy land for development. The loan will be repayable in equal instalments over 10
years and bears interest at 8% per annum. The first repayment is due on the 30 June 20.15.

2. A transfer to the value of R16 000 needs to transferred to the asset replacement reserve.

3. Terms of the partnership agreement:

3.1 The partners Derek and Jeeter share profits and losses in the ratio 3:2 respectively.

3.2 Interest is calculated at 12% per annum on the opening balances of the partners capital and
current accounts.

3.3 Both partners are entitled to a salary of R22 500 per annum.

Question 1

Which one of the following alternatives represents the correct total column amount of the statement of
changes in equity for the year ended 30 June 20.14 of DJ Traders?

1. R318 390
2. R395 390
3. R410 000
4. R412 625

30

Question 2

Which one of the following alternatives represents the correct amount of the total assets of the
statement of financial position of DJ Traders as at 30 June 20.14?

1. R530 550
2. R545 550
3. R550 785
4. R580 650

Given information for questions 3, 4 and 5:

Tyde, Fayde and Thor are in a partnership, trading as Tit-For-Tat Traders. Tyde, Fayde and Thor
share in profits/losses of the partnership in the ratio of 5:3:2 respectively.

Tyde wants to retire from the partnership on the 30 June 20.14 and the partners decided to admit
Algor to the partnership on 1 July 20.13 so as to get him acquainted with the business before Tyde
retires. The profit-sharing ratio between Tyde, Fayde, Thor and Algor will be 2:1:1:1 respectively. The
new partnership will trade as FATT Traders.

Algor will pay R60 000 cash and contribute equipment to the value of R60 000 for his 1/5 interest in
the fair value of the net assets of the new partnership.

The statement of financial position of Tit-For-Tat Traders as at 30 June 20.13, the end of the financial
year and immediately prior to yearend adjustments and the recording of the valuation adjustments in
preparation for the change in ownership structure of the partnership, is as follows:

TIT-FOR-TAT TRADERS
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20.13
R
ASSETS
Non-current assets ....................................................................................................... 220 000
Property, plant and equipment .................................................................................... 220 000
(Land and buildings, R160 000; equipment, R60 000)
Current assets ............................................................................................................... 240 000
Inventories (Merchandise) ............................................................................................ 130 000
Trade and other receivables ........................................................................................ 60 000
Cash and cash equivalents (Bank) ............................................................................... 50 000

Total assets .................................................................................................................. 460 000

EQUITY AND LIABILITIES
Total equity .................................................................................................................... 340 000
Capital (Tyde: R120 000; Fayde: R80 000; Thor: R40 000) ......................................... 240 000
Asset replacement reserve .......................................................................................... 100 000
Total liabilities ............................................................................................................... 120 000
Current liabilities........................................................................................................... 120 000
Trade and other payables ............................................................................................ 120 000

Total equity and liabilities ........................................................................................... 460 000

FAC1601/101
31

Year-end adjustments 30 June 20.13:

The following year-end adjustments are still to be recorded in the books of Tit-For-Tat Traders for the
year end 30 June 20.13:

1. Allowance for credit losses ...................................................................................... R10 000
2. Rental accrual ......................................................................................................... R20 000
3. Prepayments (Insurance) ........................................................................................ R30 000

In preparation of the change in the ownership structure of Tit-For-Tat Traders, the following valuations
were made on 30 June 20.13:

1. Inventory ................................................................................................................. R110 000
2. Land and buildings .................................................................................................. R240 000
3. Trade and other receivables .................................................................................... R100 000
4. Trade and other payables ....................................................................................... R170 000

Question 3

Which of the following alternatives represents the valuation adjustments to be transferred to the capital
account accounts of each partner, in the general ledger of Tit-For-Tat Traders on 30 June 20.13?

1. Tyde: R22 500 Fayde: R13 500 Thor: R 9 000
2. Tyde: R40 000 Fayde: R24 000 Thor: R16 000

Question 4

Which one of the following alternatives represents the correct goodwill amount of Tit-For-Tat Traders
on 30 June 20.13?

1. R 60 000
2. R100 000
3. R200 000
4. R500 000

Question 5

Which one of the following alternatives represents the correct capital account balance of Tyde after it
was correctly prepared and balanced in the general ledger of Tit-For-Tat Traders on 30 June 20.13?

1. R100 000
2. R240 000
3. R250 000
4. R300 000

32

Given information for question 6:

Frank and Levitt are in a partnership, trading as FL Wholesalers. The partners share in profits and
losses of the partnership equally and the following information pertains to the business at
31 December 20.13:

Furniture and equipment at carrying amount ............................................................................
Inventory ..................................................................................................................................
Trade and other receivables .....................................................................................................
Capital: Frank ...........................................................................................................................
Capital: Levitt ...........................................................................................................................
Bank (Cr) ..................................................................................................................................
Trade and other payables ........................................................................................................
R
300 000
157 500
30 000
225 000
187 500
18 000
57 000

On 2 January 20.14 the partners agreed to liquidate the partnership simultaneously. Frank took over
the furniture and equipment at the carrying amount of R210 000. This amount must be debited in his
capital account. The remainder of the furniture and equipment was sold for R142 500, cash.

The inventory was returned to the supplier and a cash refund, less a handling fee of R9 000, was
received. The trade and other receivables were offered a settlement discount of 10% if they settled
their accounts by 10 January 20.14. Only 90% of the debtors settled their accounts by the due date
and the remainder of the debtors is regarded as irrecoverable.

Liquidation expenses to the amount of R15 000 was paid and on the cash settlement of the creditors
accounts, a total settlement discount of R3 000 was received.

Question 6

Which one of the following alternatives represents the cash payments to be made to the partners on
completion of the liquidation of the partnership?

1. Frank: R18 600, Levitt: R133 600
2. Frank: R27 900; Levitt: R200 400
3. Frank: R35 900; Levitt: R250 400
4. Frank: R40 500; Levitt: R300 400

Given information for question 7

Rusty, Ross and Dusty were in a partnership which traded as Rusty-Dusty Traders, and they shared in
the profits and losses in the ratio of 1:2:1 respectively. They decided to liquidate the partnership
piecemeal as from 2 January 20.14.
FAC1601/101
33

The following information pertains to the partnership:

RUSTY-DUSTY TRADERS
TRIAL BALANCE AS AT 31 DECEMBER 20.13
Debit Credit
R R
Capital: Rusty ............................................................................................... 25 000
Capital: Ross ................................................................................................ 50 000
Capital: Dusty ............................................................................................... 25 000
Trade and other payables ............................................................................. 45 000
Vehicle at cost .............................................................................................. 50 000
Accumulated depreciation: Vehicle ............................................................... 30 000
Trade and other receivables ......................................................................... 65 000
Inventory ....................................................................................................... 60 000
175 000 175 000

The partners decided that Ross can take over the vehicle on 2 January 20.14 at its carrying amount.
His capital account must be debited accordingly. As soon as sufficient cash becomes available, interim
repayments must be made to the partners in such a manner that no partner will have to make any
repayments thereof to the partnership.

The inventory and trade debtors were realised as follows:

Date Carrying amount Cash proceeds
31 January 20.14 R60 000 (Inventory) R55 000
28 February 20.14 R65 000(Trade debtors) R57 500

On 1 February 20.14 the trade creditors were paid in full.

Question 7

Which alternatives shows the correct amounts that must be repaid to the partners as interim
repayments on 1 February 20.14?

1. Rusty: R5 000 Ross: R0 Dusty: R5 000
2. Rusty: R10 000 Ross: R20 000 Dusty: R10 000

Given information for question 8 and 9:

Tony and Gilbert are in a partnership, trading as Toni-Gilbert Sports Warehouse. The business was
not awarded a lucrative contract to supply rugby kits to Old Greys rugby club and as a result the
partners decided to liquidate the partnership on 30 April 20.14, simultaneously. On this date,
immediately prior to the liquidation, the following information was used to prepare a post adjustment
trial balance for the partnership:

34

Balances as at 30 April 20.14:
R
Capital: Tony ................................................................................................................... 1 500 000
Capital: Gilbert ................................................................................................................ 1 000 000
Current account: Tony (Cr) ............................................................................................. 150 000
Current account: Gilbert (Cr) ........................................................................................... 400 000
Land and buildings at cost .............................................................................................. 1 500 000
Furniture at carrying amount ........................................................................................... 175 000
Goodwill .......................................................................................................................... 675 000
Asset replacement reserve ............................................................................................. 525 000
Inventory ......................................................................................................................... 150 000
Trade and other receivables ........................................................................................... 800 000
Bank (Dr) ........................................................................................................................ 700 000
Long-term loan (GBI Bank) ............................................................................................. 425 000


1. The partnership agreement did not stipulate the ratio according to which the profits and losses
must be apportioned to the partners.

2. On 30 April 20.14:
The land and buildings were sold for R2 250 000, cash.
The long-term loan was repaid in full.
The furniture was sold for cash at a profit of R15 000.
95% Of the trade debtors settled their accounts at a discount of 10%. The outstanding balance
of 5% was regarded as irrecoverable.
The liquidation costs amounted to R30 000, and were paid for in cash.
It was decided to regard R100 000 of the recorded inventory as obsolete. The remaining
inventory was taken over by Tony at the recorded value thereof.

Question 8

Which one of the following alternatives represents the correct amount to be transferred to each
partners capital account from the liquidation account in the general ledger of Tony-Gilbert Sports
Warehouse on 30 April 20.14?

1. Tony: R250 000 Gilbert: R138 500
2. Tony: R311 400 Gilbert: R207 600
3. Tony: R350 000 Gilbert: R250 000
4. Tony: R365 500 Gilbert: R285 500

Question 9

Which one of the following alternatives represent the correct cash payment to be made to Tony after
hes capital account was correctly prepared and balanced in the general ledger of Tony-Gilbert Sports
Warehouse on 30 April 20.14?

1. R1 100 400
2. R1 245 400
3. R1 650 000
4. R1 821 400
FAC1601/101
35

Given information for question 10:

Rose and her best friend, Blossom is in a partnership, trading as Rose-Blossom Florists; they share in
profits/losses of the partnership in the ratio of 3:2 respectively. Recently they signed a huge bouquet
delivery contract with the manager of the office blocks across the street. They were in desperate need
of some assistance to join their partnership to assist with the preparation of the deliveries and who
could provide capital to help sustain the growth of the business. Bloom, another friend of Rose, offered
to join the partnership.


It was agreed that Bloom will join the partnership on 1 July 20.14 and that the new partnership will
trade as Rose-Blossom-Bloom Florists. Bloom will acquire a third share in the profit/losses of the new
partnership. Rose and Blossom will relinquish a third share to Bloom according to their existing profit-
sharing ratio. On 1 July 20.14 Bloom will contribute a vehicle with the value of R250 000 as well as
cash to the amount of R140 000 for her third share in the net assets of the new partnership.

Question 10

Which one of the following alternatives represents the correct new profit sharing ratio for Rose,
Blossom and Bloom in the partnership Rose-Blossom-Bloom Florists as at 1 July 20.14?

1. New profit sharing ratio for Rose, Blossom and Bloom is: 3:2:1

END OF ASSIGNMENT 01 SECOND SEMESTER

36
ANNEXURE D COMPULSORY ASSIGNMENT

ASSIGNMENT 02: (SECOND SEMESTER 2014)

UNIQUE NO: 859022

DUE DATE: 12 SEPTEMBER 2014





sheet



sheet.

REMEMBER:

question.
classifies it as Assignment 02 for FAC1601 second semester.


FAC1601/101
37

Given information for questions 1 - 2:

The following information relates to Ncesh CC for the year ended 30 September 2014:

1. R80 000 loan was granted to Nceza, a member of the CC on 1 May 2014. Interest is calculated
at 10% per annum and is capitalized at the end of the financial period. The loan is unsecured
and immediately callable.

2. Investments consist of:

30 000 ordinary shares in Menthol Ltd, purchased on 1 April 2011 for R50 000. On
30 September 2014 the fair value of shares held in Menthol Ltd was determined at R90 000.
These shares were purchased for speculative purposes.

25 000 ordinary shares in Sizwe (Pty) Ltd purchased at a cost of R55 000. On
30 September 2014, these shares were valued at R40 000.

Fixed deposit of R50 000 at BASA Bank made on 31 December 2009 for 60 months at
12% interest per annum.

Question 1

Which of the following alternatives represents the correct amount to be disclosed as other financial
assets in the current assets section of the statement of financial position of Nceza CC as at
30 September 2014?

1. R220 000
2. R223 333
3. R222 667
4. R173 333

Question 2

Which of the following alternatives represents the correct amount to be disclosed as financial assets in
the non-current assets section of the statement of financial position of Nceza CC as at
30 September 2014?

1. R55 000
2. R90 000
3. R180 000
4. R40 000

38

Question 3

AFCON Ltd was registered on 1 June 2013 with an authorised share capital consisting of 100 000
ordinary shares.

The company offered 20 000 ordinary shares to the incorporators of the company at a deemed value
of R40 000, all of which were taken up and paid for on 1 August 2013. On 1 September 2013, AFCON
Ltd shares traded at 25% more than the previously recorded price and the company decided to offer
ordinary shares to the general public. This public offering was underwritten by ATM Merchant Bank at
a commission of 2% which had to be settled by 30 October 2013. The companys accounting records
indicate an expense amounting to R3 000 as underwriters commission. The shares to the public were
allotted and finalised on 31 December 2013. On 1 January 2014, AFCON Ltd received a cheque
amounting to R40 000 from ATM Merchant Bank as a final settlement.

Which one of the following alternatives represents the correct number of shares subscribed for by the
general public?

1. 42 800 shares
2. 47 000 shares
3. 37 000 shares
4. 70 000 shares

Question 4

The following information pertains to Charlie Ltd:

Charlie Ltd was incorporated on 1 January 2014 with an authorized share capital of 55 000 ordinary
shares.

On 1 February 2014, the incorporators of the company subscribed to 5 000 ordinary shares at a
deemed value of R5 000 and paid it in full. On 20 February 2014, the remaining shares were offered to
the public. The board of the company deemed that a fair consideration for all issued shares is
R67 500.

The full public issue is underwritten by Nugget Underwriters Ltd for a 1% underwriters commission.
The public subscribed to 45 000 shares and the full amounts payable were received on the closing
date of 15 April 2013. All the shares were allotted on 20 April 2014 and all transactions with the
underwriter were concluded by 30 April 2014.

Which one of the following alternatives represents the correct balance of the Share Capital: Ordinary
Shares account in the general ledger of Charlie Ltd on 30 April 2014.

1. R61 250
2. R67 500
3. R78 320
4. R92 800
FAC1601/101
39


The following information pertains to Alex CC:

1. Selected items from the statement of financial position as at 30 June:

2014
R
2013
R
Member's contribution: Dee ............................................................................. 300 000 200 000
Member's contribution: Sam ................................................................................ 400 000 350 000
Creditors control (Trade creditors) ................................................................... 30 560 59 400
Non-current portion of long-term loan (Afri Bank) ................................................ 80 000 120 000
Current portion of long term loan (Afri Bank) ....................................................... 40 000 80 000
Retained earnings ................................................................................................ 80 760 65 700
Current tax payable ............................................................................................. 8 900 4 400
Land and buildings at cost ................................................................................... 259 050 153 600
Furniture and equipment at carrying amount ....................................................... 23 200 33 600
Fixed deposit ................................................................................................... 90 000 -
Accrued expense (Water and electricity) ............................................................. 10 040 5 100
Inventory ................................................................................................................... 39 400 40 600
Investment: Shares in Bruma Limited ................................................................. 105 000 -

2. Selected items from the statement of profit or loss and other comprehensive income of Alex CC for
the year ended 30 June 2014:

R
Profit on sale of furniture and equipment .................................................................................. 800
Depreciation (furniture and equipment) ..................................................................................... 4 800
Cost of sales ............................................................................................................................. 68 400
Water and electricity ............................................................................................................................ 25 000
Insurance .................................................................................................................................. 8 000
Salaries ..................................................................................................................................... 33 500


3.1 No land and buildings were sold during the year; it is the policy of the company to only sell
fixed assets for cash. Land with a cost of R50 000 was bought on credit.

3.2 The fixed deposit and additional member's contribution was made in cash.

3.3 Alex CC uses the direct method when preparing the cash flow statement.

3.4 All purchases of stock are on credit.

Question 5

Which one of the following alternatives represents the correct amount to be disclosed as proceeds
from sale of furniture and equipment in investing activities section of the statement of cash flows of
Alex CC for the year ended 30 June 2014?

1. R 6 400
2. R 5 600
3. R24 000
4. R11 200

40

Question 6

Which one of the following alternatives represents the correct amount to be disclosed as additions to
land and buildings in investing activities section of the statement of cash flows of Alex CC for the year
ended 30 June 2014?

1. R 50 000
2. R 55 450
3. R105 450
4. R216 500

Question 7

Which one of the following alternatives represents the correct amount relating to the net cash from
financing activities, which is to be disclosed in the statement of cash flows of Alex CC for the year
ended 30 June 2014?

1. R 60 000
2. R 70 000
3. R110 000
4. R100 000


The following information pertains to the head office and the branch of AAT.

Branch inventory on hand at selling price:
R
1 January 2013................................................................................................................
31 December 2014 ............................................................................................................
33 500
38 900

Transactions of the branch for the year ended 31 December 2014:
R
Inventory transferred to the branch (selling price) ..............................................................
Cash sales at the branch ...................................................................................................
Settlement discount granted to branch debtors ..................................................................
Branch administrative expenses paid by head office ..........................................................
Damaged inventory written off (at cost) ..............................................................................
200 000
190 200
2 796
15 965
3 000

Additional information

1. Inventory is purchased by the head office and supplied to the branch at selling price, which is
cost price plus 25%.

During August 2012 inventory with a selling price of R2 175 was stolen at the branch. No
entries have been made to record this theft.
FAC1601/101
41

Question 8

Which of the following alternatives represents the correct surplus/deficit in the branch inventory
account?

1. R 610 surplus
2. R 610 deficit
3. R1 525 surplus
4. R 525 deficit

Question 9

This additional information relates only to question 9.

Inventory is purchased by the head office AAT and supplied to the branch at selling price, which is
cost price plus 20%.

The branch held a clearance sale during June 2014. Inventory was sold at selling price less 25%.The
proceeds of the sale amounted to R51 000.

Which of the following alternatives represents the correct amount of mark down on cost due to the
clearance sale?

1. R11 333
2. R 5 667
3. R10 000
4. R 5 000

Question 10

Mr Bin wants to go on a holiday in 5 years time. He currently has R10 000 to invest and wants to
invest this money in a portfolio that will yield 12% per year. You have located a suitable investment for
Mr Bin to invest his money at 12% compounded half yearly.

Use the tables provided in the study guide in your calculations.

How much will Mr Bins investment be worth in 5 years time if he invests in the investment you
located?

1. R17 910
2. R 8 810
3. R13 380
4. R 6 000

END OF ASSIGNMENT 02 SECOND SEMESTER

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