Accounting

QUESTION 1

(BANK RECONCILIATION)

The following information is available after the Cash Book of Windhoek Stores was compared with their Bank Statement at 28 February 2010. Information 

The Cash Book showed an overdraft of N$10 100.



The Bank Statement showed a debit balance of N$10 568.



The deposit of N$7 654 does not appear on the Bank Statement.



Cheques not yet presented for payment: Nr. 511 N$805 Nr. 516 N$690



The bank recorded the following in the current bank account of Windhoek Stores: Credit card levy N$150 Service fee N$243 Interest on overdraft N$163



A cheque for N$260 received from P. Peters was dishonoured by the bank. Discount allowed on this cheque was N$30.



A payment by a debtor, D. Sunshine, for N$3 000 appears in the Bank Statement and not in the Cash Book.



The Bank Statement showed a debit order for N$693 in favour of Deadsure for an insurance premium.



T. Strong, a tenant, deposited his monthly rent directly into the bank account, N$4 200.

You are required to: 1.1 1.2

Make supplementary entries in Cash Book of Windhoek Stores on 28 February 2010.

(17)

Draw up the Bank Reconciliation Statement on 28 February 2010.

(8)

MEMORANDUM: QUESTION 1 CASH BOOK OF WINDHOEK STORES – FEBRUARY 2010 CB2 DOC DAY DETAILS BANK DOC DAY DETAILS B/S 28 D. SUNSHINE 3 000 28 BALANCE   B/D B/S RENT INCOME 4 200 B/S BANK CHARGES  (150+243) B/S BALANCE 4 409 B/S INTEREST ON  C/D OVERDRAFT B/S INSURANCE B/S P. PETER (R/D) 11 609 MARCH 2009  CB3 1 BALANCE

BANK 10 100 393 163 693 260 11 609

4 409

BANK RECONCILIATION STATEMENT AS AT 28 FEBRUARY 2010. CREDIT BALANCE ACCORDING TO CASH BOOK LESS: UNPRESENTED CHEQUES: NO 511 516

805



690

1 495 2914 7 654

ADD: OUTSTANDING DEPOSIT DEBIT BALANCE ACCORDING TO BANK STATEMENT

4409

 



10568

QUESTION 2

(TRIAL BALANCE)

The following balances were taken from the books of John’s General Stores on 31 December 2010. N$ 12 000 105 400 6 000 13 000 9 600 70 000 1 800 68 500 3 500 8 800 ?

Stock (1 January 2010) Sales Bank (dr) Debtors Rent Income Equipment Returns Outwards Purchases Insurance Creditors Capital Required: Prepare a Trial Balance for John’s General Stores as at 31 December 2010.

(12)

MEMORANDUM: QUESTION 2 Trial Balance of John’s General Stores as at 31 fol BALANCE SHEET SECTION CAPITAL STOCK BANK DEBTORS EQUIPMENT CREDITORS NOMINAL ACCOUNTS SALES RENT INCOME RETURNS OUTWARDS PURCHASES INSURANCE

No totals or Capital calculation – 0. (List) Sections left out – 2.

December 2010 Debit Credit N$ NS 47 400 12 000 6 000 13 000 70 000 8 800 105 400 9 600 1 800 68 500 3 500 173 000

173 000

(WAGES JOURNAL)

QUESTION 3

Required: Use the following information and draw up the Wages Journal of USA Traders for the week ending 21 March 2010. Close off the Wages Journal and post it to the given accounts in the General Ledger. A normal working week is 40 hours. Employees Hours worked S Knowall P Nobody

52 48

Rate normal time N$40 N$30

Rate overtime 1½times normal time rate

PAYE 15 % of Gross wage

Deductions Pension Social Security 9% of N$21 Normal N$14 wage

(31)

MEMORANDUM: QUESTION 3 Wages Journal of USA Traders for the week ending 21 March 2010 Details

Normal Time

Overtime

Gross

WJ Pension

PAYE

wages Hours

Rate

Amount

Hours

Rate

Social

Total

Net Wages

Security

Deductions

Amount

S Knowall

40

40

1 600

12 60

720

2 320

144

348

21

513

1 807

P Nobody

40

30

1 200

8 45

360

1 560

108

234

14

356

1 204

1 080

3 880

252

582

35

869

3 011

GL7

GL6



2 800

GL5

General Ledger of USA Traders Dr

Creditors for Wages

GL5

Cr

2010 MAR

21

WAGES

Pension Fund

WJ

3 011

GL6

2010 MAR Wages 2010 MAR

21

GROSS WAGES

WJ



3 880

21

WAGES

WJ GL7

252

(ACCOUNTING EQUATION)

QUESTION 4

Analyse the given transactions on the answer sheet. Show an increase with a (+), a decrease with a (-) and no effect with (0). Give the amount concerned in each case. TRANSACTIONS: 1. 2. 3. 4.

Goods sold on credit to A. Anna, N$600. A Anna returned damaged goods, N$250, issued credit note. Purchased stock on credit, N$7 000 from ABC Traders. The owner, B. Bennie, provide a vehicle as part of his capital contribution, N$280 000. 5. Tax deducted from employees in the Wages Journal for the month was N$2 500. Sent a cheque to the Receiver of Revenue(PAYE) for the amount deducted. 6. Purchased stationery, N$300, paid from Petty Cash. 7. Interest on fixed deposit received and deposited into the bank account, N$400. (28)

MEMORANDUM: QUESTION 4 EFFECT ON O’E L +600 0

1

ACCOUNT DEBITED A ANNA

ACCOUNT CREDITED SALES

A +600

2

RETURNS INWARDS

A ANNA

-250

-250

0

3

PURCHASES

ABC TRADERS

0

-7 000

+7 000

4

VEHICLES

CAPITAL

+280 000

+280 000 0

5

RECEIVER OF REVENUE

6



(PAYE)

BANK

-500

0

-500

STATIONERY

PETTY CASH

-300

-300

0

+400

+400

0

INTEREST ON FIXED 7

BANK

DEPOSIT

QUESTION 5

(RATIO’S)

The following amounts were taken from the books of Tsumeb Stores on 30 July 2010. Sales Cost of Sales Other Income Expenses Fixed Assets Investments Current Assets (including stock) Current Liabilities Stock Long-term Liabilities Opening Capital

N$ 250 000 175 000 5 000 30 000 150 000 15 000 30 900 9 000 8 000 60 000 126 900

Calculate to two decimal places: 5.1

Mark-up

[3]

5.2

Margin

[2]

5.3

Solvency

[6]

5.4

Quick ratio

[4]

5.5

ROCE

[4]

MEMORANDUM: QUESTION 5 5.1

Mark-up

[3]

GP% of Cost of Sales =

75 000 175 000

x 100%

= 42,86%

5.2

Margin

[2]

GP% of Sales =

75 000 250 000

x 100%

= 30%

5.3

Solvency Solvency = Total Assets : Total Liabilities = (150 000 + 15 000 + 30 900) : (60 000 + 9 000)  = 195 900 : 69 000 = 2.84 : 1

[6]

5.4

Quick ratio

[4]

(Current assets – stock) : Current liabilities =

(30 900 – 8000) : 9000

=

22 900 : 9 000

= 5.5

2.54 : 1

ROCE

[4] 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡

𝑂𝑝𝑒𝑛𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑥 100% =

50 000

= 39.40%

126 900 𝑥 100%