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FAC1601/101/3/2016

Tutorial letter 101/3/2016


Financial Accounting Reporting

FAC1601
Semesters 1 & 2
Department of Financial Accounting

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

CONTENTS
Page
1

INTRODUCTION AND WELCOME ..............................................................................................4

PURPOSE AND OUTCOMES OF THE MODULE ........................................................................4

LECTURER(S) AND CONTACT DETAILS ...................................................................................4

COMMUNICATION WITH THE UNIVERSITY...............................................................................5

MODULE-RELATED RESOURCES .............................................................................................5

5.1

Inventory letter ............................................................................................................................5

5.2

Study material .............................................................................................................................5

5.3

Calculator policy .........................................................................................................................6

STUDENT SUPPORT SERVICES ................................................................................................6

6.1

Contact with fellow students ......................................................................................................6

6.1.1

Study groups ...............................................................................................................................6

6.1.2

myUNISA .....................................................................................................................................6

6.2

Tutor assistance .........................................................................................................................7

6.2.1

Face to face tutoring...................................................................................................................7

6.2.2

E-Tutor .......................................................................................................................................11

ASSESSMENT ...........................................................................................................................11

7.1

Assignments and learning .......................................................................................................11

7.2

Submission of assignments .....................................................................................................11

7.3

Unique assignment numbers ...................................................................................................12

7.4

Due dates of assignments ........................................................................................................12

7.5

Feedback on assignments .......................................................................................................13

7.6

Study process ...........................................................................................................................13

7.7

Important aspects regarding assignments .............................................................................14

7.8

Plagiarism ..................................................................................................................................14

EXAMINATIONS ........................................................................................................................14

8.1

Examination admission ............................................................................................................14

8.2

Year mark and final examination mark ....................................................................................15

8.3

Examination period ...................................................................................................................16

8.4

Examination paper ....................................................................................................................16

8.5

Previous examination papers...................................................................................................16

8.6

Tutorial letter with information on the examination ...............................................................16

PROPOSED STUDY PROGRAMME FOR 2016 .........................................................................16

9.1

First semester ...........................................................................................................................16

9.2

Second semester ......................................................................................................................17

FAC1601/101
10

ADDENDUMS

ADDENDUM A

Assignment 01 (compulsory) first semester..........................................................18

ADDENDUM B

Assignment 02 (compulsory) first semester..........................................................27

ADDENDUM C

Assignment 01 (compulsory) second semester ....................................................35

ADDENDUM D

Assignment 02 (compulsory) second semester ....................................................43

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 distance education and information 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 start.
We trust 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 module the focus will be on financial reporting and the analysis of financial statements of
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.
Furthermore, you will be introduced to companies. You should be able to record the accounting entries
to the capital structure of companies. You should be able to record the transactions relating to
businesses with branches and to know how to record the transactions between head office and the
branch. Lastly, you must be able to prepare calculations relating to the time value of money.
3.

LECTURERS AND CONTACT DETAILS

The following lecturers are responsible for this module:


Mr MT Hlongoane
Mr A Eysele
Mr S Mnguni
Mrs B Ntoyanto-Ceki
Mr C N Chikutuma
Module Telephone Number: 012 429 4176
Module E-mail Address:
fac1601@unisa.ac.za

FAC1601/101
Postal address:
The module leader (FAC1601)
Department of Financial Accounting
PO Box 392
UNISA
0003
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.
NB:

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

4.

COMMUNICATION WITH THE UNIVERSITY

The following contact details may be used for any enquiries within the College of Accounting Sciences
(CAS)
College e-mail Addresses:

CASenquiries-Postgraduate@unisa.ac.za

CASenquiries-Undergraduate@unisa.ac.za

CASenquiries-CTA@unisa.ac.za

College telephone number:

012 429 2982/2233

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 have 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.

MODULE RELATED RESOURCES

5.1

Inventory letter

You should have received an inventory letter indicating 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 such as 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 any enquiries about your
study material, please contact the UNISA despatch department by sending an sms to 43579 or
by e-mailing despatch@unisa.ac.za.
5.2

Study material

The despatch department 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 book

Your prescribed book for this module is:


About Financial Accounting, Volume 2, 5th Edition by Doussy F, et al. LexisNexis Butterworths.
Durban. 2014.
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.
5.3

Calculator policy

Unisas calculator policy is as follows:


Candidates may only use silent, electronic, battery-driven pocket calculators subject to the
following conditions:

6.

Calculators must be cordless, and may not have print-out facilities or alpha keys;
The calculator function on mobile telephones or any electronic device (i.e. laptops
and/or any Smart Phone) may not be used; and
Candidates may not share a calculator with another candidate in the examination room.

STUDENT SUPPORT SERVICES

For information on the various student support systems and services available for students at Unisa
(e.g. student counselling, tutorial classes, language support), please consult the publication
mySTUDIES@Unisa, which you have 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.
6

FAC1601/101
Please consult the publication mySTUDIES@Unisa, which you received with your study material, for
more information on myUnisa.
6.2

Tutor assistance

6.2.1

Face to face tutoring

Students are also provided with tutorial services at various learning centres. For more information,
please contact the learning centre situated closest to you.
Students who are interested in tutor assistance can obtain the telephone numbers and details from the
learning centres.

REGIONAL TUTORIAL SERVICES


CONTACT DETAILS
REGION: PHYSICAL ADDRESS

CONTACT DETAILS: TUTORIAL SERVICES


LIMPOPO

POLOKWANE
Tutorial Services Office
23A Landros Mare Street
Polokwane, 0742

Contact Persons: Mr M Rakoma


(015) 290 3443
E-mail: mrakoma@unisa.ac.za

Physical Address
Office no 11
Masingita Complex
Giyani Road

For more information:


(015) -812 2005
Fax: (015) -81 2 2405
E-mail: Giyani@unisa.ac.za

Physical Address
87 Krogh Street
Louis Trichardt
0920

For more information:


(015) 516 3334,
Fax: (015) 516 3414
E-mail: makhado@unisa.ac.za

MPUMALANGA
NELSPRUIT
Tutorial Services Office
Standard Bank Centre: 1st Floor
31 Brown Street
Nelspruit, 1201

Contact Person: Mr V Mkhwanazi


(013) 755 2476
Fax: (013) 7552489 / 086 519 6153
E-mail: vmkhwana@unisa.ac.za

MIDDLEBURG
Tutorial Services Office
Town Square Building
Cnr Walter Sisulu & Bhimy Damane Str
Middleburg, 1055

Contact Person: Mr F Serogole


(013) 282 4115
Fax: (013) 282 6221
E-mail: pserogole@unisa.ac.za

GAUTENG
THUTONG (Pretoria)
Tutorial Services Office

Contact Person: Ms K Prithipaul

REGIONAL TUTORIAL SERVICES


CONTACT DETAILS
REGION: PHYSICAL ADDRESS

CONTACT DETAILS: TUTORIAL SERVICES

Building 14, Sunnyside Campus


Cnr Justice Mahomed & Steve Biko Streets
Sunnyside

(011) 441 5723


E-mail: prithk@unisa.ac.za

BENONI
Tutorial Services Office
Corner R51 and Brazil Roads
Daveyton
1500

Contact Persons: Dr L Molepo


(011) 845-9306
Fax: 0865 084 359
e-mail: lmolepo@unisa.ac.za

FLORIDA
Tutorial Services OfficePhapha Building, 2nd Floor,
Science Campus
Cnr Christiaan de Wet & Pioneer Ave.
Florida, 1709

Contact Person: Ms T Zililo


(011) 471 2082
e-mail: zililot@unisa.ac.za

JOHANNESBURG
Tutorial Services Office
Bram Fischer Building
29 Rissik Street
Johannesburg, 2000

Contact Person: Mr N Mnguni


(011) 630-4504
E-mail: bmnguni@unisa.ac.za

VAAL
Tutorial Services Office
1st Floor Hangar Bldg
Cr Rhodes & Voortrekker Streets
Vereeniging

Contact Person: Mr TP Modibedi


(016) 455-6304
Fax: 0866 342 233
E-mail: modibtp@unisa.ac.za

KWA-ZULU NATAL
DURBAN
Tutorial Services Office
Unisa Kwa-Zulu Natal
230 Stalwart Simelane Street
Durban, 4001

Contact Person: Dr MV Ndlovu


(031) 335 8132
Fax: (031) 337-2026
E-mail: ndlovv@unisa.ac.za

RICHARDS BAY
Tutorial Services Office
Lot 11637, Block C
Via Verbana, Veldenvlei
Richards Bay

Contact Person : Mr T Miya


(035) 78983501
Fax: (035 7892587
E-mail: miyatn@unisa.ac.za

WILD COAST/MBIZANA
Tutorial Services Office
UNISA - Wild Coast Sun

Contact Person: Mr ZE Cebisa


(031) 335 8130

FAC1601/101

REGIONAL TUTORIAL SERVICES


CONTACT DETAILS
REGION: PHYSICAL ADDRESS

CONTACT DETAILS: TUTORIAL SERVICES

R51 Wild Coast Main Road


Bizana

Fax: (031) 337-2026


E-mail: cebisze@unisa.ac.za

PIETERMARITZBURG
Tutorial Services Office
1 Langalibalele Street
Pietermaritzburg, 3201

Contact Person: Mrs P Shezi


(033) 355-1734
E-mail: Pshezi@unisa.ac.za
Fax: (033) 394-3626

NEWCASTLE
Tutorial Services Office
Cnr Sutherland and Harding Str
Newcastle, 2940

Contact Person: Mr MB Ndaba


(034) 326 3105
e-mail: ndabamb@unisa.ac.za
Fax: (034) 312 4015

WESTERN CAPE
PAROW
Tutorial Services Office
15 Jean Simonis Street
Parow, 7499

Contact Person: Mr JJ Abrahams


(021) 936-4161
E-mail: abrahjj@unisa.ac.za

GEORGE
Tutorial Services Office
Joubert Plaza 1
100 Meade Street
George, 6530

Contact Person: Mrs P Mphasane


Tel: (044) 884 1300
Fax: (044) 884 1303
E-mail: mphaspj@unisa.ac.za
EASTERN CAPE

EAST LONDON
Tutorial Services Office
10 St Lukes Road
Southernwood
East London, 5201

Contact Person: Ms N Kenqu


(043) 743 9246
Fax: 043 743 9273
e-mail: kenqun@unisa.ac.za

MTHATHA
Tutorial Services Office
32 Cnr Victoria & York Rd Str
Economic Affairs Building
Umtata, 5100

Contact Person: Mrs NE Msengana


(047) 531-5002/6
Fax: (047) 531-5120
E-mail: msengne@unisa.ac.za

REGIONAL TUTORIAL SERVICES


CONTACT DETAILS
REGION: PHYSICAL ADDRESS

CONTACT DETAILS: TUTORIAL SERVICES

PORT ELIZABETH
Tutorial Services Office
Greyville House
Corner of Cape, Greyville and Ring Rds, Green Acres
Port Elizabeth, 6057

Contact Person: Ms N Lallie


(041) 363 1070
Fax: (041) 363 1071
E-mail: nomes@unisa.ac.za

MIDLANDS
RUSTENBURG
Tutorial Services Office
Forum Building (1st Floor)
Cnr. OR Tambo & Steen Street
Rustenburg, 0300

Contact Person: Mr M Khorombi


(014) 594 8800/8856
Fax: (014) 594-8863/086 518 5508
mkhoro@unisa.ac.za

MAFIKENG
Tutorial Services Office
29 Main Street
Cnr Warren & Main Streets
Opposite ABSA Bank, Mafikeng
Mafikeng, 2745

Contact Person: Prof S Shole


: (018) 381-6617/7318
Fax: (018) 381-7926
E-mail: sholejss@unisa.ac.za

POTCHEFSTROOM
Tutorial Services Office
12 Stil street
Cnr Stil and Goedtz streets
Potchefstroom, 2531

Contact Person: Mr MF Mavhungu


(018) 294 3362/41
Fax: (018) 297-2107
E-mail: mavhumf@unisa.ac.za

BLOEMFONTEIN
Tutorial Services Office
2nd Floor, NRE House
161 Zastron Street
Bloemfontein, 9301

Contact Person: Dr S Nhlapo


(051) 430-4353
Fax: (051) 430-3822
E-mail: snnhlapo@unisa.ac.za

KIMBERLEY
Tutorial Services Office
Suite 61A Northern Cape Mall
Memorial Road
Kimberley, 8301

Contact Person: Mrs M Louw


(053) 832 6391
Fax: 0865187125
e-mail: mmlouw@unisa.ac.za

KROONSTAD
Tutorial Services Office
NFS Building 1st floor
36 Brand Street

Contact Person: Ms K Thantsha


(056) 213-2053/4
Fax: (056) 213-1867

10

FAC1601/101

REGIONAL TUTORIAL SERVICES


CONTACT DETAILS
REGION: PHYSICAL ADDRESS

CONTACT DETAILS: TUTORIAL SERVICES

Kroonstad, 9500

E-mail: thantkm@unisa.ac.za

6.2.2

E- Tutor

Unisa offers online tutorials (e-tutoring) to students registered for modules at NQF level 5, 6 and 7 for
qualifying first year and second year modules. Please communicate with your module leader to find
out if any of the modules that you have registered for, falls in this category.
Once you have been registered for a qualifying module, you will be allocated to a group of students
with whom you will be interacting during the tuition period as well as an e-tutor who will be your tutorial
facilitator. Thereafter you will receive an sms informing you about your group, the name of your e-tutor
and instructions on how to log onto MyUnisa in order to receive further information on the e-tutoring
process.
Online tutorials are conducted by qualified E-Tutors who are appointed by Unisa and are offered free
of charge. All you need to be able to participate in e-tutoring, is a computer with internet connection. If
you live close to a Unisa regional Centre or a Telecentre contracted with Unisa, please feel free to visit
any of these to access the internet. E-tutoring takes place on MyUnisa where you are expected to
connect with other students in your allocated group. It is the role of the e-tutor to guide you through
your study material during this interaction process. For you to get the most out of online tutoring, you
need to participate in the online discussions that the e-tutor will be facilitating.
There are modules which students have been found to repeatedly fail. For these modules face-to-face
tutors are allocated and tutorials for these modules take place at the Unisa regional centres (refer
6.2.1). These tutorials are offered free of charge, however, it is important for you to register at your
nearest learning centre to secure attendance of these classes.
E-tutor is an online tutorial service introduced by UNISA to support students with their studies. As a
registered student for FAC1601, you will be allocated to an E-Tutor who will assist you with the module
if you so wish. You will need to logon to myUNISA to see your allocated E-Tutor
7.

ASSESSMENT

7.1

Assignments and learning

Compulsory assignments for all modules should be submitted by students at set due dates.
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. The assessment criteria included in your study guide
at the end of each study unit will help you to understand what is required of you when doing your
assignment.
7.2

Submission of assignments

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 gain access 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
11

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)
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 for assignments refer to the brochure mySTUDIES@Unisa, which you
have 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

Unique assignment numbers

In addition to the general assignment number (e.g. 02), assignments to be completed by means of a
mark-reading sheet (multiple choice questions) or by means of a written assignment must also have
their unique assignment number. The following are the unique assignment numbers for 2016:
Semester 1
Assignment 01
Assignment 02
Semester 2
Assignment 01
Assignment 02
7.4

Type
Multiple choice
Multiple choice
Type
Multiple choice
Multiple choice

Unique number
676185
873247
Unique number
766459
674828

Due dates for assignments

The two compulsory assignments for this module are attached as Addendum A and Addendum B for
the first semester and Addendum C and Addendum D for the second semester.
Assignments must reach the university not later than the dates specified below:
Assignment number
01/2015 Compulsory Addendum A
02/2015 Compulsory Addendum B
01/2015 Compulsory Addendum C
02/2015 Compulsory Addendum D

Semester 1
Due dates
14 March 2016
11 April 2016

Semester 2
Due dates

22 August 2016
12 September 2016

The receipt of assignments after the due date disrupts our marking programme and the uncontrolled
submission of assignments creates administrative problems. No extension or requests for extension of
assignments will be considered.

12

FAC1601/101
7.5

Feedback on assignments

You will automatically receive the correct answers 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
numbers 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.
7.6

Study process

You may encounter fewer problems when you work as follows:


Point 9 of this tutorial letter sets out the suggested study programme for semester 1 and 2. First
semester students: refer to paragraph 9.1 and second semester students: refer to paragraph 9.2.

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 points 7.7 and 8.2).

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 points 7.7 and 8.2).

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 included in this tutorial letter under point 9 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:

That study will commence on either 11 January 2016 for the first semester or 27 June 2016 for
the second semester and that the full 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 each study unit 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.
Addendums A and B contain the compulsory assignment 01 and 02 for students who are registered
for FAC1601 in the first semester.
Addendums C and D contain the compulsory assignment 01 and 02 for students who are registered
for FAC1601 in the second semester.
13

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 BE RETURNED UNMARKED
7.7

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 to UNISA through myUnisa or manually as this is proof
that you submitted the assignment.
Assignments constitute an integral part of the tutorial material. Study material on which assignment 01
is based is given in Addendum A (for students registered for the first semester) or Addendum C (for
students registered for the second semester). Assignments and tutorial letters must also be studied for
examination purposes.
7.8

Plagiarism

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 considered as 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, refer to the brochure
mySTUDIES@Unisa, which you have 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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FAC1601/101
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 will be 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:
(20% x year mark) + (80% x mark obtained in the examination)
Example:
A

Year mark
Average of marks
contribution to
for assignment
final
1&2
mark at 20%
(Year mark)
Student 1
Student 2
Student 3
Student 4
Student 5
Student 6
Student 7

100%
70%
50%
30%
20%
10%
0%

20%
14%
10%
6%
4%
2%
0%

C
Exam mark
contribution
required to pass
(50% minus
year mark
contribution)
32%
36%
40%
44%
46%
48%
50%

D
Minimum exam
mark required to
pass
(C 0,8)
40%
45%
50%
55%
58%
60%
63%

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
supplementary 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, you in effect, 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.

15

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 2016 and the supplementary examination
will be written in October/November 2016. If you are registered for the second semester, you will write
the examination in October/November 2016 and the supplementary examination will be written in
May/June 2017.
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. Theoretical and
multiple choice questions will also be asked. Exam questions are set on the contents 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 or memorandums 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 as 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 papers change 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.
9.

PROPOSED STUDY PROGRAMME FOR 2016

9.1

First semester
DATE
11/1 to 11/2
12/2 to 15/2
15/2
15/2 to 22/3
23/3 to 24/3
24/3
29/3 to 02/4
04/4 to 08/4

11/4 to examination

STUDY MATERIAL AND ASSIGNMENTS


Study: Study units 1 to 5
Do Assignment 01 (compulsory assignment): Due date 14/03/2016
Submit Assignment 01 (NB: DO NOT WAIT UNTIL 14/03/2016)
Study: Study units 6 to 10
Do Assignment 02 (compulsory assignment): Due date 11/04/2016
Submit Assignment 02 (NB: DO NOT WAIT UNTIL 11/04/2016)
Do and mark Assignment 03 (do not submit this assignment)
Do and mark Assignment 04 (do not submit this assignment)
The solutions to Assignments 03 and 04 are provided in the same
tutorial letter
Revision
During May/June 2016:
EXAMINATION

16

FAC1601/101
9.2

Second semester
DATE
27/6 to 28/7
29/7 to 1/8
3/8
3/8 to 25/8
25/8 to 27/8
27/8
29/8 to 3/9
5/9 to 9/9

STUDY MATERIAL AND ASSIGNMENTS


Study: Study units 1 to 5
Do Assignment 01 (compulsory assignment): Due date 22/08/2016
Submit Assignment 01 (NB: DO NOT WAIT UNTIL 22/08/2016)
Study: Study units 6 to 10
Do Assignment 02 (compulsory assignment): Due date 12/09/2016
Submit Assignment 02 (NB: DO NOT WAIT UNTIL 12/09/2016)
Do and mark Assignment 03 (do not submit this assignment)
Do and mark Assignment 04 (do not submit this assignment)
The solutions to Assignments 03 and 04 are provided in the same
tutorial letter
12/9 to examination
Revision
During October/November 2016:
EXAMINATION

We trust that you will enjoy this module and we wish you success with your studies.
Kind regards
Mr M Hlongoane
Mr A Eysele
Mrs B Ntoyanto-Ceki
Mr S Mnguni
Mr CN Chikutuma
LECTURERS:

FINANCIAL ACCOUNTING REPORTING (FAC1601)

17

ADDENDUM A

COMPULSORY ASSIGNMENT

ASSIGNMENT 01:

FIRST SEMESTER

UNIQUE NO:

676185

DUE DATE:

14 MARCH 2016

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 5 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. 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
identifies 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.
18

FAC1601/101
ASSIGNMENT 01 FIRST SEMESTER (continued)
QUESTION 1
Consider the following statements:
(a)

According to the Conceptual Framework, the objective of financial statements is to provide


information about the financial position, the performance and the changes in financial position
of an entity that is useful to a wide range of users in making economic decisions.

(b)

The Conceptual Framework sets out two underlying assumptions that must be taken into
account when preparing financial statements, namely the legal and the going concern
assumptions.

(c)

All recognised items must be disclosed in financial statements.

(d)

The elements that directly pertain to the financial position of a business entity are assets,
liabilities and equity.

(e)

All forms of business entities must legally adhere to the International Financial Reporting
Standards (IFRS) when the financial statements thereof are prepared.

Which one of the following alternatives represents the correct statement(s)?


1.
2.
3.
4.

(d)
(a), (b) and (d)
(c) and (e)
(a) and (d)

QUESTION 2
Consider the following statements:
(a)

A partnership is a separate legal entity and therefore also a separate tax entity.

(b)

A close corporation can continue to operate under its registered name when the membership
thereof changes.

(c)

If there is no written agreement between the partners of a partnership regarding the


appropriation of a profit/loss, it is assumed that the profit/loss will be apportioned to the
partners equally.

(d)

According to the legal approach towards accounting for partnerships, salaries to partners are
an appropriation of the profit of a partnership and not an operating expense.

(e)

A close corporation has an independent juristic personality and the taxable income of a close
corporation is subject to normal income tax at the rate which is applicable to a company.

Which one of the following alternatives represents the correct statement(s)?


1.
2.
3.
4.

(b)
(b), (d) and (e)
(b), (c), (d) and (e)
(a) and (c)

19

ASSIGNMENT 01 FIRST SEMESTER (continued)


GIVEN INFORMATION FOR QUESTIONS 3 5
You are approached to assist in the preparation of the financial statements of a partnership, trading as
Papi-Faith Traders.
List of balances of Papi-Faith Traders as at 28 February 2015:
R
Capital: Papiki.......................................................................................................................
300 000
Capital: Faith ........................................................................................................................
300 000
Current account: Papiki (Dr 1 March 2014) ........................................................................
17 500
Current account: Faith (Dr 1 March 2014)..........................................................................
25 000
Drawings: Papiki ...................................................................................................................
78 000
Drawings: Faith.....................................................................................................................
80 200
Mortgage-loan: A-Good Bank ..............................................................................................
872 000
Trade debtors control............................................................................................................
75 000
Trade creditors control .........................................................................................................
32 500
Bank (favourable) .................................................................................................................
33 350
Land and buildings at cost .................................................................................................... 2 000 000
Vehicles (delivery van at cost) (1 March 2014) .....................................................................
168 000
Equipment at cost (1 March 2014) ........................................................................................
48 000
Accumulated depreciation: Vehicle (delivery van) .................................................................
27 900
Accumulated depreciation: Equipment ..................................................................................
8 000
Sales .................................................................................................................................... 1 925 000
Cost of sales .........................................................................................................................
555 000
Advertising expenses............................................................................................................
7 800
Bank charges .......................................................................................................................
3 250
Telephone expenses ............................................................................................................
28 800
Stationery consumed ............................................................................................................
2 500
Administrative expenses .......................................................................................................
17 000
Vehicle maintenance costs ...................................................................................................
34 500
Salaries to employees ..........................................................................................................
165 000
Insurance expenses..............................................................................................................
24 080
Municipal charges.................................................................................................................
42 000
Inventory ..............................................................................................................................
60 420
Additional information
While you paid a visit to the offices of Papi-Faith Traders, you were informed of the following:
1. EZY Computers CC, one of the trade debtors of the partnership, was liquidated and no cash was
received to settle the outstanding balance of the Close Corporation, which amounted to R16 500.
The bookkeeper has not yet taken this event into account.
2. Papi-Faith Traders has placed an order for inventory with a cost price of R32 000 on 15 February
2015. The invoice and inventory were received by the partnership on 27 February 2015. The
bookkeeper did not record this credit purchase by the partnership.
3. On 28 February 2015, a customer returned faulty inventory which he had purchased (at the selling
price) for R500, cash. The cashier refunded him R500 in cash. Papi-Faith Traders bought the
inventory for R400. The bookkeeper was unaware of this sales return.
4. The partners decided to provide for credit losses at 8% of the balance of the outstanding trade
debtors control account. It was further decided to record the provision against the credit losses
account.
20

FAC1601/101
ASSIGNMENT 01 FIRST SEMESTER (continued)
5. Depreciation for the year was not yet provided for. It is the accounting policy of the partnership to
provide for depreciation as follows:
Delivery van:

Equipment:

According to the straight line method, at 20% per annum. Estimated residual
value after 5 years: R75 000.
At 25% per annum, according to the diminishing-balance method.

6. The mortgage loan from A-Good Bank was obtained on 1 April 2014 to finance the land and
buildings which were purchased on this date. No interest on the loan was provided for the financial
year. The interest rate that was agreed upon is 10,5% per annum, payable annually in arrears, on
31 March.
QUESTION 3
Which one of the following alternatives represents the correct amount that must be disclosed as
revenue in the statement of profit or loss and other comprehensive income of Papi-Faith Traders for
the year ended 28 February 2015?
1.
2.
3.
4.

R1 925 000
R1 924 500
R1 908 000
R1 908 500

QUESTION 4
Which one of the following alternatives represents the correct amount that must be disclosed as
depreciation in the statement of profit or loss and other comprehensive income of Papi-Faith Traders
for the year ended 28 February 2015?
1.
2.
3.
4.

R18 600
R28 600
R151 500
R19 900

QUESTION 5
What will the correct amount for cost of sales be in the calculation of gross profit for the year ended 28
February 2015?
1.
2.
3.
4.

R586 600
R587 000
R555 000
R554 600

QUESTION 6
Gift and Thandi are in a partnership, trading as GT Traders. They decided to admit Lucky to the
partnership. The new partnership will trade as GTL Traders. It was agreed that Lucky will contribute
R225 000 in cash as well as equipment with a fair value of R5 000 for a 1/5 interest in the fair value of
the net assets of GTL Traders.
The sum of the equity that Gift and Thandi will contribute to GTL Traders is R900 000. It was decided
that Gift, Thandi and Lucky will share in the profits/losses of GTL Traders in the ratio of 2:1:1
respectively.
21

ASSIGNMENT 01 FIRST SEMESTER (continued)


Which one of the following alternatives represents the correct amount that will be calculated as the
purchased goodwill of GTL Traders?
1.
2.
3.
4.

R670 000
R210 000, negative goodwill
R20 000
Nil

QUESTION 7
Abe and Adobe were in a partnership and shared in the profits/losses of the partnership in the ratio of
3:1 respectively. On 31 July 2015, the financial year-end of the partnership, the books of the
partnership were closed off. On this date the debit balances of the current accounts of Abe and Adobe
were R19 200 and R22 500 respectively, and the credit balances on the capital accounts of Abe and
Adobe were R60 000 and R100 000 respectively. On 1 August 2015 Abe personally sold a quarter of
the balances on his capital and current accounts in the partnership to Dolby for a cash amount of
R12 700. Dolby paid this amount into the personal bank account of Abe.
Which one of the following general journal entries (narrations omitted) to record the transfer of the
interest that was sold by Abe to Dolby in the books of the partnership, is correct?
1.

2015
Aug 1 Capital: Abe
Current account: Dolby
Capital: Dolby
Current account: Abe

Debit
R
45 000
14 400

Credit
R

45 000
14 400

2.

2015
Aug 1 Capital: Abe
Current account: Dolby
Capital: Dolby
Current account: Abe

Debit
R
15 000
4 800

Credit
R

15 000
4 800

3.

2015
Aug 1 Capital: Abe
Current account: Abe
Capital: Dolby
Current account: Dolby

Debit
R
15 000
4 800

Credit
R

15 000
4 800

22

FAC1601/101
ASSIGNMENT 01 FIRST SEMESTER (continued)
4.
Debit
R
12 700

2015
Aug 1 Bank
Capital

Credit
R
12 700

QUESTION 8
Thabu and Joe are in a partnership, trading as TJ Stunts. They share equally in the profits/losses of
the partnership. For the purpose of admitting Rama to the partnership on 1 April 2015, goodwill to the
amount of R50 000 was created by recording it directly against the capital accounts of the partners.
The land and buildings, with a carrying amount of R300 000, were valued at a fair value of
R1 000 000. The equipment, with a carrying amount of R60 000, was valued at a fair value of
R45 000. Thabu, Joe and Rama will share in the profits/losses of the new partnership, which will trade
as Trio Stunts, in the ratio of 3:2:1 respectively.
Which one of the following alternatives is the correct valuation account in the general ledger of
TJ Stunts to record the above valuations?
1.
Dr
2015
Mar 31 Equipment at carrying
amount
Capital: Thabu
Capital: Joe
Capital: Rama

Valuation account
R
15 000
342 500

2015
Mar 31

Cr

Land and buildings

228 333
114 167
700 000

R
700 000

700 000

2.
Dr
2015
Mar 31 Equipment at carrying
amount
Capital: Thabu
Capital: Joe

Valuation account
R

Cr

2015
Mar 31 Land and buildings
15 000
Goodwill
367 500
367 500

R
700 000
50 000

750 000

750 000

23

ASSIGNMENT 01 FIRST SEMESTER (continued)


3.
Dr
2015
Mar 31 Land and buildings

Valuation account

Cr

R
2015
700 000 Mar 31 Equipment at carrying
amount
Capital: Thabu
Capital: Joe
700 000

R
15 000
342 500
342 500
700 000

4.
Dr
2015
Mar 31 Equipment at carrying
amount
Capital: Thabu
Capital: Joe

Valuation account
R
15 000
342 500
342 500

Cr
R
700 000

2015
Mar 31 Land and buildings

700 000

700 000

QUESTION 9
Alpha, Beta and Theta were in a partnership which traded as Aquilla Services, and they shared in the
profits and losses of the partnership in the ratio of 3:2:1 respectively. They decided to liquidate the
partnership on 1 July 2015 by means of a simultaneous liquidation.
On 30 June 2015, the following trial balance was prepared:
Aquilla Services
Trial balance as at 30 June 2015
Debit
R
Capital: Alpha ....................................................................................................
Capital: Beta ......................................................................................................
Capital: Theta ....................................................................................................
Current account: Alpha ......................................................................................
Current account: Beta ........................................................................................
Current account: Theta ......................................................................................
Long-term loan ..................................................................................................
Trade creditors ..................................................................................................
Land and buildings at fair value ........................................................................
Equipment at carrying amount ...........................................................................
Bank ..................................................................................................................

Credit
R
540 000
300 000
176 000

36 000
24 000
12 000
216 000
72 000
960 000
240 000
80 000
1 328 000

1 328 000

On 1 July 2015 the following liquidation transactions took place:


Land and buildings were sold for R960 000 cash. Equipment with a carrying amount of R60 000 was
taken over but not paid for immediately by Beta at an agreed amount of R54 000. The remaining
equipment was sold for R204 000 in cash. The long-term loan was repaid in full and R66 000 was paid
to the trade creditors in full settlement of their accounts.

24

FAC1601/101
ASSIGNMENT 01 FIRST SEMESTER (continued)
Which alternative shows the correct net profit/loss made on the liquidation of Aquilla Services?
1.
2.
3.
4.

R24 000, net loss


The partnership broke even
R24 000, net profit
R30 000, net profit

QUESTION 10
Fortune, Ever and Young are in a partnership, trading as Cloud Creations. They share in the
profits/losses of the partnership in the ratio of 4:2:1 respectively. On 31 July 2015 they decided to
dissolve the partnership piecemeal. It is anticipated that the liquidation expenses will amount to
R3 500. The partners are all solvent and each one of them will be able to settle any final deficit on his
capital account.
All of the assets will be sold for cash. The anticipated liquidation expenses must be provided for in full
and the cash must be retained in the bank account until the date that it is payable. The trade creditor
is to be paid with a once-off payment after the liquidation expenses have been provided for. As further
cash becomes available, interim repayments to the partners must be made in such a manner that no
partner will have to repay an interim repayment that was received.
Cloud Creations
Trial balance as at 31 July 2015
Debit
R
Capital: Fortune .................................................................................................
Capital: Ever ......................................................................................................
Capital: Young ...................................................................................................
Current account: Fortune ...................................................................................
Current account: Ever ........................................................................................
Current account: Young .....................................................................................
Bank ..................................................................................................................
Trade debtors ....................................................................................................
Motor vehicle at carrying amount ......................................................................
Trade creditor ....................................................................................................

Credit
R
12 000
6 000
3 000

7 000
6 000
2 500
3 000
4 000
20 500
34 500

5 000
34 500

The assets were liquidated as follows:


Date

3 August 2015
17 August 2015
23 August 2015

Asset

Trade debtors
Motor vehicle
Motor vehicle

Value

Selling
price/Cash
received
R
R
4 000
4 000
10 000
13 500
10 500
10 500

Profit

R
3 500
-

No discount was received on the payment made to the trade creditor. On 23 August 2015 the
liquidation expenses were settled in full.

25

ASSIGNMENT 01 FIRST SEMESTER (continued)


Which one of the following alternatives discloses the correct balances of the general ledger accounts
of the partnership on 17 August 2015, after the liquidation of the motor vehicle and the settlement of
the trade creditor were recorded, but prior to any interim repayments to the partners?
Bank

1.
2.
3.
4.

R
3 000
20 500
15 500
12 000

Motor
Trade
vehicles
debtors
R
R
20 500
4 000
10 500
10 500
10 500
-

Trade
creditor
R
(5 000)
(5 000)
-

Capital:
Capital: Capital:
Fortune
Ever
Young
R
R
R
(5 000)
(12 000) (5 500)
(7 000)
(13 000) (6 000)
(7 000)
(13 000) (6 000)
(5 000)
(12 000) (5 500)

END OF ASSIGNMENT 01 FIRST SEMESTER

26

FAC1601/101
ADDENDUM B

COMPULSORY ASSIGNMENT

ASSIGNMENT 02:

FIRST SEMESTER

UNIQUE NO:

873247

DUE DATE:

11 APRIL 2016

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 6 10 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. 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 02 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 identifies the unique number, it
identifies it as Assignment 02 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.

27

ASSIGNMENT 02 FIRST SEMESTER (continued)


QUESTION 1
(a) A members interest usually represents a members right to share in a certain percentage of the
profit(s)/loss(es) of the close corporation.
(b) The interest of any member in a close corporation must be a single interest which is expressed as
a percentage of the total membership of the close corporation.
(c) Not every member of a close corporation stands in a fiduciary relationship to the close
corporation.
(d) The members of a close corporation, having more than one member, may at any time enter into a
written association agreement.
(e) A close corporation must specify the date on which its financial year will end in its founding
statement.
Which one of the following alternatives represents the incorrect statement(s)?
1.
2.
3.
4.

(a) and (c)


(c)
(a) and (b)
(a), (b), (d) and (e)

QUESTION 2
Fred, Frank and Frieda are the only three members of the close corporation, Funky Enterprises CC.
They have equal interests in the profit(s)/loss(es) of the close corporation. The financial year-end of
the Close Corporation is 28 February. On 1 March 2014 the balances of the members contribution
accounts were R20 000 each. During the financial year ended 28 February 2015 the following
transactions were, amongst others, recorded in the accounting records of the Close Corporation:
Transactions:
Fred made an additional members contribution of two new computers, worth R13 500 each. An
amount equal to R90 000 of the profit for the year ended 28 February 2015 was distributed to the
members according to their members interest in the Close Corporation - these amounts were not paid
out in cash, but recorded as loans to the Close Corporation. Frieda made an additional members
contribution to the Close Corporation of R10 000 in cash.
Which one of the following alternatives reflects the correct balances on the members contribution
accounts of Funky Enterprises CC as at 28 February 2015?
1.
2.
3.
4.

Fred: R33 500; Frank: R20 000 and Frieda: R20 000
Fred: R38 500; Frank: R25 000 and Frieda: R25 000
Fred: R68 500; Frank: R55 000 and Frieda: R65 000
Fred: R47 000; Frank: R20 000 and Frieda: R30 000

28

FAC1601/101
ASSIGNMENT 02 - FIRST SEMESTER (continued)
QUESTION 3
Loot and Lollie are the only two members of Moneybags CC. At 31 December 2015 (the financial yearend) the following information was extracted from the pre-adjustment trial balance of the Close
Corporation:
EXTRACT OF BALANCES AS AT 31 DECEMBER 2015
Debit
R
Members contribution: Loot ..............................................................
Members contribution: Lollie ............................................................
Loan to member: Loot .......................................................................
Loan from member: Lollie .................................................................
Long-term loan (Virtual Bank) ...........................................................

Credit
R
30 000
30 000

10 000
15 000
50 000

The following must still be taken into account:


1.

Interest must be calculated at 10% per annum on the loan to the member, and must be
capitalised. The loan of R10 000 was granted to Loot on 1 July 2015 and is immediately callable.

2.

The interest on the loan from Lollie must be calculated at 12% per annum, and is payable
annually on 31 December. The loan from Lollie was obtained on 1 January 2015. Lollie agreed to
receive the interest for the 2015 financial year in cash on 1 January 2016.

3.

The long-term loan from Virtual Bank bears interest at 15% per annum, payable annually on
30 June. The loan was granted to the Close Corporation on 1 July 2014. On 30 June 2015 the
annual interest was paid in cash to Virtual Bank; this payment was correctly recorded in the
accounting records of the Close Corporation.

Which one of the following amounts must be disclosed as finance costs in the statement of profit or
loss and other comprehensive income of Moneybags Close Corporation for the year ended
31 December 2015?
1.
2.
3.
4.

R9 300
R9 800
R10 300
R 5 550

GIVEN INFORMATION FOR QUESTIONS 4 and 5


On 1 March 2013 Game Park Ltd was registered with an authorised share capital of 500 000 ordinary
and 300 000 12% preference shares. The founders of the company subscribed to 20% of the ordinary
shares and paid R100 000.
On 1 June 2013, Game Park Ltd offered 40% of the authorised ordinary share capital and 35% of the
authorised preference share capital to the public at R500 000 and R315 000 respectively, considered
to be market value. A-BIG Bank was appointed as the underwriter of the issue of ordinary shares at a
commission of 1%. By 15 June 2013, the closing date for the applications, 250 000 ordinary shares
and 105 000 preference shares were applied for. On 30 June 2013 all of the offered shares were
allotted by the board of directors, the cash of the unsuccessful applicants were repaid and the
underwriters account was settled in full.

29

ASSIGNMENT 02 - FIRST SEMESTER (continued)


During a board meeting on 28 February 2014, the directors declared a dividend of R0,20 per share on
all ordinary shares issued at 28 February 2014. The dividends were paid on 2 March 2014. Game
Park Ltds financial year end is 28 February.
QUESTION 4
Which one of the following amounts represents the underwriters commission?
1.
2.
3.
4.

Underwriters commission paid to Game Park Ltd, R5 000


Underwriters commission paid to A-BIG Bank, R8 150
Underwriters commission paid to Game Park Ltd, R8 150
Underwriters commission paid to A-BIG Bank, R5 000

QUESTION 5
The total amount of dividends that were paid by Game Park Ltd on 2 March 2015 amounts to:
1.
2.
3.
4.

R97 800
R85 200
R61 000
R50 000

Information pertaining to questions 6 - 8


In respect of Building Contractors CC, all the financial statements (and notes thereto), with exception
of the cash flow statement, pertaining to the 2015 financial year were correctly prepared.
The following trial balance of Building Contractors are presented to you:

Property, plant and equipment ..................................................................


Investment at fair value .............................................................................
Trade debtors ...........................................................................................
Inventories ...............................................................................................
Cash and cash equivalents (Bank- favourable) .........................................
Members contributions .............................................................................
Retained earnings .....................................................................................
Loans from members ................................................................................
Mortgage loan ...........................................................................................
Trade creditors..........................................................................................
Income tax payable ...................................................................................
Bank overdraft ..........................................................................................

2015
30 June
R
2 800 000
200 000
180 000
45 000
2 000
506 000
229 000
1 950 000
350 000
116 000
72 000

2014
30 June
R
235 000
35 000
12 000
13 000
1 000
78 000
150 000
43 500
22 500
-

30

FAC1601/101

ASSIGNMENT 02 - FIRST SEMESTER (continued)


The note pertaining to property, plant and equipment for the year ended 30 June 2015 is as follows:
Land
and
Building Computer
buildings Equipment Equipment Vehicle
Total
R
R
R
Carrying amount at 1 July 2014.
180 000
11 000
44 000 235 000
Cost price
200 000
12 000
50 000 262 000
Accumulated depreciation
(20 000)
(1 000)
(6 000) (27 000)
Additions during the year. 2 500 000
9 000 180 000 2 689 000
Disposals during the year
- (44 000) (44 000)
Depreciation for the year.
(40 000)
(4 000) (36 000) (80 000)
Carrying amount at 31 June 2015.. 2 500 000
140 000
16 000 144 000 2 800 000
Cost price 2 500 000
200 000
21 000 180 000 2 901 000
Accumulated depreciation
(60 000)
(5 000) (36 000) (101 000)
You have also obtained the following information in respect of the Close Corporation. (All transactions
were correctly recorded.):
1. The profit before tax for the year ended 30 June 2015 was R579 000.
2. Interest:

The loans from the members are interest bearing. The interest for the 2015 financial
year amounted to R22 740 and was paid in cash to the members.
The interest expense in respect of the mortgage loan for the 2015 financial year
amounted to R99 600. According to the loan agreement, the interest was capitalised.
Interest earned to the amount of R12 000 on the investment that was made.

3. The income tax expense was disclosed as R121 000 in the statement of profit or loss and other
comprehensive income for the year ended 30 June 2015.
4. The members decided to distribute R30 000 of the profit. On 30 June 2015 this amount was paid
out to the member in cash.
5. The truck of the business was stolen on 1 July 2014. During the financial year, the insurance
company paid the carrying amount of the stolen truck out in cash to the Close Corporation. The
close corporation purchased a new truck in cash to replace the stolen truck.
6. The Close Corporation purchased a warehouse during the year it was paid for with a cash
payment from the Close Corporations own resources and a mortgage loan from GBank.
7. The additions to the computer equipment were paid for in cash. The computer equipment was
acquired to maintain operations.
8. The fair value of the investment is equal to the cost price thereof.
9. During the 2015 financial year a new member was admitted to the Close Corporation, she
contributed R1 000 in cash as her members contribution.

31

ASSIGNMENT 02 - FIRST SEMESTER (continued)


QUESTION 6
Which one of the following amounts represents the net cash from operating activities in the statement
of cash flows of Building Contractors CC for the year ended 30 June 2015?
1.
2.
3.
4.

R897 840
R769 340
R829 600
R859 600

QUESTION 7
Which one of the following amounts represents the net cash from investing activities of the statement
of cash flows of Building Contractors CC for the year ended 30 June 2015?
1.
2.
3.
4.

R2 845 000
R2 689 000
R2 889 000
R2 680 000

QUESTION 8
Which one of the following amounts represents the net cash from financing activities of the statement
of cash flows of Building Contractors CC for the year ended 30 June 2015?
1.
2.
3.
4.

R1 900 400
R1 929 400
R1 930 400
R1 950 000

QUESTION 9
The following information pertains to the head office and the branch of Big-Jessy clothing
Branch inventory on hand at selling price
R
1 January 2015 ...........................................................................................................
31 December 2015 ............................................................................................................

74 500
99 140

Transactions of the branch for the year ended 31 December 2015


Inventory transferred to the branch (cost price) ............................................................ ..
Cash sales at the branch ............................................................................................. ..
Cash receipts from branch debtors ............................................................................ .
Settlement discount granted to branch debtors ..............................................................
Branch administrative expenses paid by head office ......................................................
Damaged inventory written off (at cost) ..........................................................................

R
350 000
451 200
315 324
6 000
51 365
4 000

Additional information
1. Inventory is purchased by the head office and supplied to its branches at selling price, which is
cost price plus 20%.

32

FAC1601/101
ASSIGNMENT 02 - FIRST SEMESTER (continued)

2. On 15 June 2015, a burglary took place at the branch. Inventory with a selling price of R21 000
and R75 000 in cash (from cash sales) were stolen. No entries have been made to record this
theft.
3. The branch held a clearance sale during April 2015. Inventory was sold at selling price less 15%.
The proceeds of the sale amounted to R78 000 and were included in the cash sales
amount of R451 200 above.
Which one of the following alternatives represents the correct entry to be made in the branch
adjustment account, in terms of a burglary that took place on 15 June 2015?
1.

2015
June 15 Branch adjustment account
Branch inventory account
Recording of the mark-up on the inventory stolen at the branch

Debit
R
3 500

Credit
R
3 500

2.

2015
June 15 Branch adjustment account
Branch inventory account
Recording of the mark-up on the inventory and cash stolen at
the branch

Debit
R
16 000

Credit
R
16 000

3.

2015
June 15 Branch expense account
Branch adjustment account
Recording of the mark-up on the inventory and cash stolen at
the branch

Debit
R
16 000

Credit
R
16 000

4.

2015
June 15 Branch inventory account
Branch adjustment account
Recording of the mark-up on the inventory and cash stolen at
the branch

Debit
R
96 000

Credit
R
96 000

33

ASSIGNMENT 02 - FIRST SEMESTER (continued)


QUESTION 10
Abey is considering buying a car for R400 000. The bank has quoted him an interest rate of
11 percent per annum (compounded monthly). If he wishes to repay the principal amount over
60 months, how much will the monthly instalment be?
1.
2.
3.
4.

R6 667
R8 697
R7 400
R3 667
END OF ASSIGNMENT 02 FIRST SEMESTER

34

FAC1601/101
ADDENDUM C

COMPULSORY ASSIGNMENT

ASSIGNMENT 01:

SECOND SEMESTER

UNIQUE NO:

766459

DUE DATE:

22 AUGUST 2016

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 5 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. 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 identifies the unique number, it
identifies it as Assignment 01 for FAC1601 second 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.

35

ASSIGNMENT 01 SECOND SEMESTER (continued)


QUESTION 1
Consider the following statements:
(a) According to the conceptual framework, comparability is one of the enhancing qualitative
characteristics of financial statements.
(b) An asset is a resource controlled by an entity as a result of past events and from which future
economic benefits are expected to flow to the entity.
(c) According to the Conceptual Framework, elements of financial statements include the statement
of financial position, statement of profit or loss and other comprehensive income, the statement of
changes in equity and notes, comprising a summary of significant accounting policies and other
explanatory notes.
(d) The heading of the statement of financial position of a business entity is disclosed for a financial
period.
(e) The heading of the statement of profit or loss and other comprehensive income of a business
entity is disclosed at a specific date.
Which one of the following alternatives represents the incorrect statement(s)?
1.
2.
3.
4.

(a) and (b)


(c)
(c), (d) and (e)
(a), (b), (d) and (e)

QUESTION 2
Consider the following statements:
(a) The two principal ways of establishing a partnership is by action or agreement.
(b) The withdrawal of capital in cash by a partner must be recorded by debiting the drawings account
of the partner and by crediting the bank account of the partnership.
(c) The drawings of partners are expenses of the partnership which must be disclosed in the
statement of profit or loss and other comprehensive income of the partnership.
(d) At the end of a financial year, the salary of a partner for the year is provided for by debiting the
salary account of the partner and by crediting the current account of the partner.
(e) At the end of a financial year, the salary account of a partner is closed off to the appropriation
account.
(f) Cash drawn by a partner during a financial year as his salary is recorded by debiting the drawings
account (or the current account if no drawings account was opened) of the partner and crediting
the bank account of the partnership.
Which one of the following alternatives represents the correct statements?
1.
2.
3.
4.

(a), (b), (d), (e) and (f)


(a), (c), (d), (e) and (f)
(a), (d), (e) and (f)
(d), (e) and (f)

36

FAC1601/101
ASSIGNMENT 01 SECOND SEMESTER (continued)
Given information for Questions 3 to 5:
You are approached to assist in the preparation of the financial statements of a partnership, trading as
Papi-Faith Traders.
List of balances of Papi-Faith Traders as at 28 February 2015:
R
Capita: Papiki......................................................................................................................
300 000
Capital: Faith.......................................................................................................................
300 000
Current account: Papiki (Dr 1 March 2014) ......................................................................
17 500
Current account: Faith (Dr 1 March 2014) ........................................................................
25 000
Drawings: Papiki .................................................................................................................
78 000
Drawings: Faith ...................................................................................................................
80 200
Mortgage-loan: A-Good Bank .............................................................................................
872 000
Trade debtors control ..........................................................................................................
75 000
Trade creditors control .......................................................................................................
32 500
Bank (favourable) ...............................................................................................................
33 350
Land and buildings at cost .................................................................................................. 2 000 000
Vehicles at cost (1 March 2014) ..........................................................................................
168 000
Equipment at cost (1 March 2014) ......................................................................................
48 000
Accumulated depreciation: Vehicle .....................................................................................
27 900
Accumulated depreciation: Equipment ................................................................................
8 000
Sales................................................................................................................................... 1 925 000
Cost of sales .......................................................................................................................
555 000
Advertising expenses ..........................................................................................................
7 800
Bank charges ......................................................................................................................
3 250
Telephone expenses...........................................................................................................
28 800
Stationery consumed ..........................................................................................................
2 500
Administrative expenses .....................................................................................................
17 000
Vehicle maintenance costs .................................................................................................
34 500
Salaries to employees .........................................................................................................
165 000
Insurance expenses ............................................................................................................
24 080
Municipal charges ...............................................................................................................
42 000
Inventory ............................................................................................................................
60 420
Additional information
While you paid a visit to the offices of Papi-Faith Traders, you were informed of the following:
1. EZY Computers CC, one of the trade debtors of the partnership, was liquidated and no cash was
received to settle the outstanding balance of the Close Corporation, which amounted to R16 500.
The bookkeeper has not taken the liquidation into account.
2. Papi-Faith traders has placed an order for inventory with a cost price of R32 000 was placed via
e-mail on 15 February 2015. The invoice and inventory were received by the partnership on 27
February 2015. The bookkeeper did not record this credit purchase by the partnership.
3. On 28 February 2015 a customer returned faulty inventory which he had purchased for R500,
cash. The cashier refunded him R500 in cash. The bookkeeper was unaware of this sales return.
Papi-Faith Traders bought the inventory for R400.
4. The partners decided to provide for credit losses at 8% of the balance of the trade debtors control
account. It was further decided to record the provision against the credit losses account.

37

ASSIGNMENT 01 SECOND SEMESTER (continued)


5. Depreciation for the year was not yet provided for. It is the accounting policy of the partnership to
provide for depreciation as follows:
Delivery vehicle:

According to the straight line method, at 20% per annum. Estimated


scrap value after 5 years: R75 000.

Equipment:

At 25% per annum, according to the diminishing-balance method.

6. The mortgage loan from A-Good Bank was obtained on 1 April 2014 to finance the land and
buildings which were purchased on this date. No interest on the loan was provided for the financial
year. The interest rate that was agreed upon is 10,5% per annum, payable annually in arrears on
31 March.
QUESTION 3
Which one of the following alternatives represents the correct amount that must be disclosed as credit
losses in the statement of profit or loss and other comprehensive income of Papi-Faith Traders for the
year ended 28 February 2015?
1.
2.
3.
4.

R16 500
R21 640
R22 500
R21 180

QUESTION 4
Which one of the following alternatives represents the correct amount that must be disclosed as the
carrying amount of the equipment as at 28 February 2015 in the notes to the financial statements of
Papi-Faith Traders for the year ended 28 February 2015?
1.
2.
3.
4.

R10 000
R30 000
R28 000
R40 000

QUESTION 5
Which one of the following alternatives represents the correct amount at which the trade and other
payables must be disclosed in the statement of financial position of Papi-Faith Traders as at
28 February 2015?
1.
2.
3.
4.

R64 500
R156 060
R148 430
R19 430

QUESTION 6
Jack and Jill were in a partnership, sharing the profits and losses of the partnership in the ratio of 2:1
respectively. They formed a new partnership by admitting Hill as a partner. Hill obtained a 1/6 share in
the profits/losses of the new partnership. Jack and Jill relinquished the 1/6 share to Hill according to
their existing profit-sharing ratio.

38

FAC1601/101
ASSIGNMENT 01 SECOND SEMESTER (continued)
Which alternative shows the profit-sharing ratio of the partners in the new partnership?
1.
2.
3.
4.

The profit-sharing ratio of Jack, Jill and Hill is 3:2:1 respectively


The profit-sharing ratio of Jack, Jill and Hill is 10:5:3 respectively
The profit-sharing ratio of Jack, Jill and Hill is 4:3:1 respectively
The profit-sharing ratio of Jack, Jill and Hill is 4:2:1 respectively

QUESTION 7
Maxi and Million are in partnership, trading as Maximillion Traders. They share the profits/losses in the
ratio of 3:1 respectively. For the purpose of admitting Minnie and Tickie to the partnership on
1 May 2015, Maxi and Million decided to create goodwill to the amount of R75 000 by recording it
directly against the capital accounts of the partners. The land and buildings with a carrying amount of
R3 500 000 were valued at a fair value of R4 000 000, and the furniture and equipment, with a
carrying amount of R860 000, were valued at a fair value of R900 000. Maxi and Million decided to
provide for credit losses, to the amount of R46 000. Maxi, Million, Minnie and Tickie will share in the
profits/losses of the new partnership, which will trade as Zillion Traders, in the ratio of 4:3:2:1
respectively.
Which one of the following alternatives discloses the correct entry (narration omitted) in the general
journal of Maximillion Traders to record the goodwill?
1.

2015
April 30

Goodwill
Current account: Maxi
Current account: Million

Debit
R
75 000

Credit
R
56 250
18 750

2.

2015
April 30

Capital: Maxi
Capital: Million
Goodwill

Debit
R
56 250
18 750

Credit
R

75 000

3.

2015
April 30

Goodwill
Capital: Maxi
Capital: Million
Capital: Minnie
Capital: Tickie

Debit
R
75 000

Credit
R
30 000
22 500
15 000
7 500

39

ASSIGNMENT 01 SECOND SEMESTER (continued)


4.

2015
April 30

Goodwill
Capital: Maxi
Capital: Million

Debit
R
75 000

Credit
R
56 250
18 750

QUESTION 8
Alpha, Beta and Theta were in a partnership which traded as Aquilla Services, and they shared in the
profits and losses of the partnership in the ratio of 3:2:1 respectively. They decided to liquidate the
partnership on 1 July 2015 by means of a simultaneous liquidation.
On 30 June 2015 the following trial balance was prepared:
Aquilla Services
Trial balance as at 30 June 2015
Debit
R
Capital: Alpha ....................................................................................................
Capital: Beta ......................................................................................................
Capital: Theta ....................................................................................................
Current account: Alpha ......................................................................................
Current account: Beta ........................................................................................
Current account: Theta ......................................................................................
Long-term loan ..................................................................................................
Trade creditors ..................................................................................................
Land and buildings at fair value ........................................................................
Equipment at carrying amount ...........................................................................
Bank ..................................................................................................................

Credit
R
540 000
300 000
176 000

36 000
24 000
12 000
216 000
72 000
960 000
240 000
80 000
1 328 000

1 328 000

On 1 July 2015 the following liquidation transactions took place:


Land and buildings were sold for R960 000 cash. Equipment with a carrying amount of R60 000 was
taken over by Beta at an agreed amount of R54 000 but not paid for immediately. The remaining
equipment was sold for R204 000 in cash. The long-term loan was repaid in full and R66 000 was paid
to the trade creditors in full settlement of their accounts.
Which alternative shows the correct balances of the capital accounts of Alpha, Beta and Theta,
immediately prior to the final settlement thereof?
1.
2.
3.
4.

Alpha: R516 000 (Cr); Beta: R278 000 (Cr); Theta: R168 000 (Cr)
Alpha: R516 000 (Cr); Beta: R332 000 (Cr); Theta: R168 000 (Cr)
Alpha: R492 000 (Cr); Beta: R262 000 (Cr); Theta: R160 000 (Cr)
Alpha: R516 000 (Dr); Beta: R332 000 (Dr); Theta: R168 000 (Dr)

40

FAC1601/101
ASSIGNMENT 01 SECOND SEMESTER (continued)
Given information for Questions 9 and 10:
Ecks, Whye and Zed are in a partnership, sharing in the profits and losses of the partnership in a ratio
of 5:3:2 respectively. They decided to liquidate the partnership by selling the assets piecemeal. At the
commencement of the liquidation, the list of balances of the partnership was as follows:
Debit
R
Capital: Ecks..
Capital: Whye......
Capital: Zed..
Current account: Ecks
Current account: Whye......
Current account: Zed..
Goodwill.
Furniture and equipment at carrying amount ........
Inventory....................................
Trade creditors.....
Bank

Credit
R
20 000
55 000
60 000
9 640

2 440
3 600
6 800
127 200
24 000
16 200
4 000
164 440

164 440

At the first liquidation of the assets, all the inventory was sold for R21 000, cash. Thereafter, the
accounts of the trade creditors were settled in full at a total discount of R1 200.
Any interim repayments to the partners must be made in such a manner that it will not be necessary
for a partner to repay an interim payment by him, to the partnership at a later stage.
QUESTION 9
Which one of the following alternatives represents the cash that is available for a first interim
repayment to the partners?
1.
2.
3.
4.

R4 000
R25 000
R10 000
R40 000

QUESTION 10
Which one of the following statements is correct?
1.

The correct balances of the general ledger accounts of the partnership, after the liquidation of the
inventory and the settlement of the trade creditors were recorded, but immediately prior to the
recording of any interim repayments, are as follows:
Bank

Furniture and
equipment

Capital:

Capital:

Capital:

Ecks

Whye

Zed

25 000

127 200

(63 600)

(38 160)

(25 440)

41

ASSIGNMENT 01 SECOND SEMESTER (continued)


2.

The available cash for a first interim repayment must be apportioned to Ecks, Whye and Zed
according to their profit-sharing ratio.

3.

According to the loss-absorption-capacity method, an amount of R10 000 must be repaid solely to
Zed as the first interim repayment made by the partnership.

4.

When applying the loss-absorption-capacity method to calculate the apportionment of available


cash to the partners, as an interim repayment, all the remaining assets (that need to be liquidated)
are assumed to be worthless. The recorded balances of these asset accounts are apportioned to
the partners capital accounts. According to the given information, R127 200 must be apportioned
to Ecks, Whye and Zed equally when the first interim repayment to the partners is calculated
according to the loss-absorption-capacity method.
END OF ASSIGNMENT 01 SECOND SEMESTER

42

FAC1601/101
ADDENDUM D

COMPULSORY ASSIGNMENT

ASSIGNMENT 02:

SECOND SEMESTER

UNIQUE NO:

674828

DUE DATE:

12 SEPTEMBER 2016

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 6 10 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.
No correspondence or telephone conversations will be conducted in this regard.

5.

Important aspects regarding multiple-choice assignments answered on a markreading 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 02 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 identifies the unique number, it
identifies it as Assignment 02 for FAC1601 second 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.

43

ASSIGNMENT 02 SECOND SEMESTER (continued)


GIVEN INFORMATION FOR QUESTIONS 1 3
On 28 February 2015 the following information was obtained from the accounting records of Water
Sport CC, who owns a ski boat training facility. Y Suzuki and D Marina have an interest in the
corporation of 60% and 40% respectively.
Balances as at 28 February 2015
Members contribution: Y Suzuki .....................................................................................
Members contribution: D Marina ....................................................................................
Loan from member: Y Suzuki ..........................................................................................
Loan to member: D Marina .............................................................................................
Retained earnings (1 March 2014) ..................................................................................

R
16 000
9 000
70 000
32 000
95 200

Additional information
The loan to the member bears interest at 12% per annum and the interest is paid by the member at
each financial year-end of the Close Corporation.
During the financial year ended 28 February 2015 the following events took place and were all
correctly recorded in the accounting records of the Close Corporation:
1. The engine of the personal ski boat of D Marina ceased. On 1 April 2014 she borrowed
R60 000 from Water Sport CC to repair the engine. Interest is charged at 12% per annum.
2. On 28 February 2015 Y Suzuki made an additional members contribution of R4 000 in cash.
3. D Marina received R10 000 from her father as a gift. On 1 October 2014 she used it to make a
down-payment on her loan from the Close Corporation. She also repaid 30% of the original loan
on 1 February 2015. These transactions were correctly recorded.
4. On 28 February 2015 a total profit distribution of R50 000 was paid out to the members.
5. For the year ended 28 February 2015, the profit before tax of Water Sport CC was R200 500, and
the actual normal income tax of the Close Corporation amounted to R58 145.
QUESTION 1
Which one of the following alternatives represents the correct disclosure of the interest income in the
statement of profit or loss and other comprehensive income of Water Sport CC for the year ended
28 February 2015?
1.
2.
3.
4.

Under the heading Finance costs as interest on loan from member R5 920.
Under the heading Distribution, administration and other expenses as interest received
R5 920.
Under the heading Other income as interest income: loan to member R5 920
Under the heading Revenue: as interest income: loan to member R5 920.

44

FAC1601/101
ASSIGNMENT 02 SECOND SEMESTER (continued)
QUESTION 2
The closing balance of the members contributions as disclosed in the statement of changes in net
investment of members of Water Sport CC for the year ended 28 February 2015, will be as follows:
1.
2.
3.
4.

R25 000
R29 000
R79 000
R121 355

QUESTION 3
The closing balance of the retained earnings as disclosed in the statement of changes in net
investment of members of Water Sport CC for the year ended 28 February 2015, will be as follows:
1.
2.
3.
4.

R237 555
R92 355
R245 700
R187 555

GIVEN INFORMATION FOR QUESTIONS 4 AND 5


On 1 March 2014, Game Park Ltd was registered with an authorised share capital of 500 000 ordinary
and 300 000 12% preference shares. The founders of the company subscribed to 20% of the ordinary
shares and paid R100 000.
On 1 June 2014, Game Park Ltd offered 40% of the authorised ordinary share capital and 35% of the
authorised preference share capital to the public at R500 000 and R315 000 respectively, considered
to be market value. A-BIG Bank was appointed as the underwriter for the issue of ordinary shares at a
commission of 1%. By 15 June 2014, the closing date for the applications, 250 000 ordinary shares
and 105 000 preference shares were applied for. On 30 June 2014, all of the offered shares were
allotted by the board of directors, the cash of the unsuccessful applicants were repaid and the
underwriters account was settled in full. On 30 August 2014, a special meeting was convened by the
board where an interim ordinary dividend of 15 cents per share was declared and paid on
2 September 2014.
During a board meeting on 28 February 2015, the directors of Game Park Ltd made the following
resolutions:

To issue capitalisation shares at a ratio of 3 ordinary shares for every 10 ordinary shares held on 1
March 2015.
To declare a final dividend of 20 cents per share on all ordinary shares in issue at 28 February
2015. The dividends were paid on 2 March 2015. Game Park Ltds financial year-end is
28 February.

QUESTION 4
Which one of the following amounts represents the total number of shares issued as capitalisation
shares?
1.
2.
3.
4.

90 000 ordinary shares


90 000 ordinary shares and 31 500 12% preference shares
60 000 ordinary shares
60 000 ordinary shares and 31 500 12% preference shares

45

ASSIGNMENT 02 SECOND SEMESTER (continued)


QUESTION 5
The total amount of dividends that will be shown as declared in the statement of changes in equity
by Game Park Ltd for the financial year ended 28 February 2015 is:
1.
2.
3.
4.

R105 000
R148 200
R152 190
R113 400

GIVEN INFORMATION FOR QUESTIONS 6 8


In respect of Building Contractors CC, all the financial statements (and notes thereto), with exception
of the cash flow statement, pertaining to the 2015 financial year were correctly prepared.
The following trial balances of Building Contractors were presented to you
2015
2014
28 February 28 February
R
R
Land and buildings ....................................................................................
Equipment .............................................................................................
Accumulated depreciation on Equipment ..................................................
Trade debtors ...........................................................................................
Provision for credit losses .........................................................................
Prepayments.............................................................................................
Inventories.. ..............................................................................................
Bank.................................................................................
Petty cash.. ...............................................................................................
Members contributions ..............................................................................
Retained earnings .....................................................................................
Mortgage loan ...........................................................................................
Trade creditors..........................................................................................
Accrued expenses ....................................................................................
Income tax receivable ..............................................................................
Income tax payable ..................................................................................
Distribution to members payable ...............................................................
Bank overdraft ..........................................................................................

835 000
700 000
52 500
55 200
3 312
4 800
178 500
1 500
1 100 000
211 520
300 000
8 188
6 000
9 000
75 000
9 480

400 000
240 000
90 000
160 000
9 600
3 200
130 600
90 000
1 000
600 000
65 000
200 000
20 000
5 000
4 800
40 000
-

You have also obtained the following information in respect of the Close Corporation. (All transactions
were correctly recorded.):
1. The increase in the loan took place on 1 December 2014. Interest is charged at 10% per annum.
2. On 1 September 2014 all equipment was sold at a loss of R5 200. The new equipment was
purchased on the same date. Depreciation is calculated at 20% per annum on diminishing balance
method.
3. The statement of changes in net investment of members for the year ended 28 February 2015
showed an amount of R135 000 distributed to members.
4. The net profit before tax amounted to R391 000.
5. Assume the SA normal tax rate to be 28%.

46

FAC1601/101
ASSIGNMENT 02 SECOND SEMESTER (continued)
QUESTION 6
Which one of the following amounts represents the distribution paid to be disclosed in the
statement of cash flows of Building Contractors CC for the year ended 28 February 2015?
1.
2.
3.
4.

R135 000
R100 000
R170 000
R115 000

QUESTION 7
Which one of the following amounts represents the income tax paid to be disclosed in the
statement of cash flows of Building Contractors CC for the year ended 28 February 2015?
1.
2.
3.
4.

R95 680
R105 280
R137 320
R123 280

QUESTION 8
Which one of the following amounts represents the proceeds on sale of equipment to be disclosed
in the statement of cash flows of Building Contractors CC for the year ended 28 February 2015?
1.
2.
3.
4.

R129 800
R144 800
R120 800
R114 800

GIVEN INFORMATION FOR QUESTIONS 9 AND 10


The following items are extracted from the accounting records of Marley CC
2015
2014
28 February 28 February
R
R
Land and buildings ....................................................................................
Equipment .............................................................................................
Accumulated depreciation on equipment ..................................................
Trade debtors ...........................................................................................
Prepayments.............................................................................................
Inventories.. ..............................................................................................
Bank.................................................................................
Petty cash.. ...............................................................................................
Members contributions .............................................................................
Retained earnings .....................................................................................
Mortgage loan ...........................................................................................
Trade creditors..........................................................................................
Income tax receivable ..............................................................................
Bank overdraft ..........................................................................................

85 000
70 000
22 500
???
4 800
98 000
1 500
500 000
224 220
90 000
???
9 480

40 000
40 000
15 000
40 000
3 200
80 600
90 000
1 000
400 000
65 000
90 000
20 000
4 800
-

47

ASSIGNMENT 02 SECOND SEMESTER (continued)


You have also obtained the following information in respect of the Close Corporation. (All transactions
were correctly recorded.):
1. Purchases for 2015 and 2014 amounted R207 100 and R231 952, respectively. Credit purchases
amounts to 80% of all purchases.
2. Trade debtors, trade creditors and inventory for the financial year ended 28 February 2013
amounted to R50 000, R45 000, R90 000 respectively.
3. The statement of changes in net investment of members for the year ended 28 February 2015
showed an amount of R130 500 distributed to members.
4. The net profit before interest and tax for the year ended 28 February 2015 amounted to
R391 000.
5. Trade payables payment period was calculated as 72 days, on average.
QUESTION 9
Which one of the following statements is correct in terms of the inventory holding period of Marley CC
for the financial year ended 28 February 2015?
1.
2.
3.
4.

Deteriorated by 43 days
Improved by 43 days
Deteriorated by 129 days
Improved by 129 days

QUESTION 10
How much additional loan should Marley CC acquire to achieve a debt equity ratio of 50% at 28
February 2015?
1.
2.
3.
4.

R160 000
R217 266
R262 630
R272 110
END OF ASSIGNMENT 02 SECOND SEMESTER

FAC1601_2016_TL_101_3_E.doc

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