Western Cape Education Department

Curriculum (FET)

ACCOUNTING
REVISION
2023 TERM 1

Grade 11
ACTIVITIES

This revision program is designed to assist you in revising the critical content and skills covered during term 1.
The purpose is to prepare you to understand the key concepts and to provide you with an opportunity to establish
the required standard and the application of the knowledge necessary to succeed in the NCS (Gr 12) examination.

The 2023 Gr 11 revision program (3 sets of booklets*) will cover the following topics:

• Term 1: Reconciliations; Fixed assets; Partnership accounts (this set of booklets)

• Term 2: Partnership Financial statements; Analysis & interpretation; Cost accounting
• Term 3 & 4: Budgeting; Inventory systems; VAT
* A set of booklets = Activities book (solutions via QR code & link) and Workbook
 Gr 11 Accounting T1, 2023 2 Revision Activities

RECONCILIATIONS
favourable bank balance | bank overdraft (unfavourable bank balance) | EFT (Electronic funds transfer)
Basic debit order | stop order | bank charges | interest on current account | interest on overdue accounts
concepts creditor | monthly statement | creditors control account | creditors ledger account | creditors list
interest on overdue account | internal control

NOTE: The bank reconciliation process is an effective way to control cash (receipts & payments) (comparing the bank
account of the business (internal) with the bank statement from the bank (external))
'Outstanding' deposits and EFTs mean it did not appear on the latest bank statement (or transaction history) due to
various reasons, but it was recorded in the cash journals.

ACTIVITY 1 (Bank reconciliation)

Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to
the question number (1.1–1.5) in the Workbook.
1.1. A favourable balance on the Bank Statement is indicated as a debit.
1.2 A post-dated EFT received must be entered on the date received.
1.3 Credit card sales are entered in the DJ
1.4 Interest credited on the bank statement will be recorded in the CRJ.
1.5 An EFT made by another business appearing on our bank statement is shown as an bank
error in the bank reconciliation statement in the credit column.
5

ACTIVITY 2 (Bank reconciliation) (27 marks; 21 minutes)

The information relates to Plyster Traders for April 2020.
REQUIRED
(10
2.1 Show the entries to be recorded in the Cash Journals.
)
2.2 Calculate the Bank account balance in the ledger on 30 April 2020. (4)
2.3 Prepare the Bank Reconciliation Statement on 30 April 2020. (7)
2.4 As the internal auditor you are not happy with the control of cash in this business.
• Explain TWO problems to confirm your concerns. Quote figures. (6)
• Give advice on how EACH problem can be avoided in future.
INFORMATION
A Information for the Bank Reconciliation Statement prepared on 31 March 2020
Unfavourable balance as per Bank Statement R19 500
Deposit in the Cash Journal, but not on March 2020 bank statement 50 400
EFTs entered in CPJ Nr 615 22 500
Nr 690 11 850
Unfavourable balance on the Bank account in the Ledger 350
NOTE: The deposit appeared on the bank statement on 3 April 2020.
EFT 690 was reflected on the April Bank Statement on 2 April 2020 as R14 550.
The Bank Statement was correct.
B Provisional Cash Journal totals on 30 April 2020 before receiving the April Bank
Statemen via email from the bank:
• Cash Receipts Journal (CRJ): R65 570
Cash Payments Journal (CPJ): R64 790
C. Information on April 2020 Bank Statement not recorded in the April Cash Journals
Debit Credit
EFT (Z. Nkosi - tenant) R31 350
Debit order (Quick Insurers) R9 750
EFT (X GlassFit - repairs to shop windows) R2 975
Interest 150
Internet banking fees 800
Internet banking fees 800
NOTE: The bank duplicated the internet banking fees in error. It will be corrected in May 2020.
Gr 11 Accounting T1, 2023 3 Revision Activities

D. Deposit entries In the April CRJ that did not agree with the April Bank Statement:
• R27 750 on 28 April 2020
• R44 000 on 29 April 2020. The Bank Statement reflected this as R33 500. An investigation
revealed that the cash slips added to R44 000, but only R33 500 was deposited. The shortfall
cannot be traced and must be written off
E. Entries In the April CPJ that did not appear In the April Bank Statement:
• EFT 880 (PNP Suppliers) 29 April, R8 600
• EFT 889 (P. Sithole - owner, for private use) on 30 April, R7 300

F. Bank Statement balance on 30 April 2020 is the balancing figure.

27

ACTIVITY 3 (Bank Reconciliation) (42 marks; 34 minutes)

The following information relates to Marion Traders for March 2021.
REQUIRED
3.1 Complete the Cash Receipt Journal and Cash Payment Journal for March 2021 (29)
3.2 Prepare the Bank Account on 31 March 2021. (6)
3.3 Prepare the Bank Reconciliation Statement on 31 March 2021. (7)
INFORMATION
A. Extract from the Bank Reconciliation Statement on 28 February 2021:
Outstanding deposits: 18 February 2021 R15 900
28 February 2021 23 000
Outstanding EFT 123 5 700
Favourable balance as per Bank account 11 400
NOTE:
• The outstanding deposit of R15 900 appeared on the March 2021 bank statement.
• The outstanding deposit of R23 000 on the Bank Reconciliation Statement was in respect of
sales. It was reflected as R18 000 in the March Bank statement. Atter an investigation, it was
decided to write-off the missing R5 000.
• EFT 123 appeared on the Bank Statement for March 2021.
B. Provisional totals from the Cash Journals on 31 March 2021:
• Cash Receipt Journal, R49 000
• Cash Payment Journals, R48 000
C. Information on the March 2021 Bank Statement that did not appear in the March 2021
Cash Journals:
EXTRACT: BANK STATEMENT - WW BANK AMOUNT
Debit order: Town Councll- Water and electricity R3200
Cash handling fees 444
EFT fees 113
Deposit: W.__Western: Rent 8300
Direct deposit - Loan repayment 19000
EFT - payment: BB Traders 5900
B. Bennie 2750
Service fees 555
Interest on a positive current account balance 232
Boabab Insurers 6600
Gr 11 Accounting T1, 2023 4 Revision Activities

D. Additional Information
• W. Western made a direct deposited for his monthly rent.
• The EFT for R5 900 to creditor BB Traders was omitted in the Journals, in error.
• A deposit of R19 000 reflected on the business Bank Statement, is a bank error. They will
rectify this on the next statement
• A deposit from debtor B. Bennie was a part payment on his account.
• The debit order to Boabab Insurers includes R1 500 for the owner's private vehicle.
E. The following Information in the March 2021 Cash Journals did not appear on the Bank
Statement for March 2021:
• Outstanding deposit, R17 400
• EFT 222 for R6 600 to XY Stores for trading stock purchased
42

ACTIVITY 4 (Bank Reconciliation; Internal control) (20 marks; 15 minutes)

The information relates to Twinkle Traders on 30 April 2020.
REQUIRED
4.1 Analyse each transaction below by completing the columns in the table in your Workbook. (14)
4.2 Answer the problem-solving question:
All cash transactions are controlled by Karen Jones. She has been solely responsible for
this job for the past few years.
• Explain TWO problems you have identified from the transactions below which show a
lack of control of cash. Quote figures to support your answer.
• Provide a different solution for each problem identfied. (6)
INFORMATION
Example (see the Workbook):
The bank statement showed bank charges of R158 which has not yet been recorded by the business.
BANK RECONCILIATION NO ENTRY
BANK ACCOUNT (show with
No STATEMENT
Contra account details Dr Cr Dr Cr X)
E.G. Bank charges R158

Transactions:
A. A deposit of R53 000 made on 20 April 2020 was in the cash journal but did not appear on the
bank statement.
B. A stop-order payment of R5 500 for the monthly repayment on the loan from Rand Bank must still
be recorded by the business.
C. EFT 283 for R1 500 issued to a creditor as part-payment of account of R2 500 appeared in the
cash journal only.
D. EFT 288 for R265 appeared on the bank statement. This cheque was issued to Matt Suppliers for
stock purchased on 12 April 2020. It was incorrectly entered as R256 in the cash journal.
E A cheque for R680 was received from J. Brady (a debtor), post-dated to 25 June 2020. This will be
deposited at the bank on the due date.
F EFT 293 for R920 from the previous month's Reconciliation Statement Issued to Telkom for the
monthly telephone account appeared on the April 2020 bank statement.
G A deposit of R20 000 for rent received from BB Traders did not appear on the bank statement for
April. Ifvtlen Investigated, Karen stated that she was robbed on her way to the bank. The owner
authorised the cancellation of this deposit as she was not certain if any of this money will ever be
recovered
20
 Gr 11 Accounting T1, 2023 5 Revision Activities

ACTIVITY 5 (Creditors Reconciliation) [24 marks; 20 minutes]

The information relates to Solomons Traders. The balance in the account of VDM Suppliers in the
Creditors Ledger does not correspond with the closing balance indicated on the statements of account
received from them on 28 February 2021.
REQUIRED
5.1 Prepare the correct account of VDM Suppliers in the Creditors Ledger on (12)
28 February 2021
5.2 Prepare the Creditors Reconciliation Statement on 28 February 2021. (8)
5.3 Name TWO tasks of the Creditors' clerk to maintain or improve the iternal control of
creditors. (4)

INFORMATION
1. Balances on 28 February 2021:
VDM Suppliers' account in the Creditors Ledger R23 410 (credit)
Montly statement received from VDM Suppliers R25 364 (debit)

2. Errors and omissions Identified after the relevant comparisons were made:
2.1 An EFT payment of R3 200 appeared in the Creditors Ledger, but not on the statement of
account. On investigation, it appears that this was actually a payment by Solomons Traders to
KZN Suppliers.
2.2 The bookkeeper did not record invoice 621 (R4 366) received from VDM Suppliers on
22 February 2021.
2.3 Solomons Traders incorrectly credited a debit note to the Creditors Ledger account of VDM
Suppliers, R340 on 3 February 2021.
2.4 EFT 2041 for R6 260, issued to VDM Suppliers, was incorrectly recorded in the CPJ as R2
620 and posted as such.
2.5 The statement of account reflects interest of R114, charged by VDM Suppliers on the overdue
account. The interest has to be recorded and posted to the Creditors Ledger.
2.6 An invoice for R5 885 was entered correctly in the Creditors Ledger, but the statement of
account received from VDM Suppliers showed the invoice entered as R8 558. The creditors
clerk did contact VDM and they promised to correct the error.
2.7 Transactions after the statement date of 26 February 2021:
- Invoice no. 2130 for goods purchased, R5 127
- Goods retumed to VDM, R1 048
24

ACTIVITY 6 (Creditors Reconciliation) (20 marks; 15 minutes)

The information below relates to Busby Stores for September 2018.
REQUIRED
6.1 Provide TWO reasons why it is important for the business to prepare the Creditors'
Reconciliation Statement each month. (4)
6.2 Calculate the correct Creditors' Control Account balance after taking into account the
relevant errors and omissions. (6)
6.3 Calculate the correct balances for creditors Zebo Suppliers and Leo Wholesalers, by taking
into account the errors and omissions. (10)

INFORMATION
A Balance and totals on 30 September 2018 (before errors and omissions).
Creditors control account in the General Ledger R87 690
Creditor's list: (before errors and omissions)
Zebo Suppliers R16 580
Leo Wholesalers R29 520
 Gr 11 Accounting T1, 2023 6 Revision Activities

B ERRORS AND OMISSIONS

(a) The Creditors control was under-cast by R5 020.
(b) A credit invoice for trading stock purchased from Zebo Suppliers for R12 800 on
28 September 2018 was not recorded at all.
(c) A payment of R3 150 to Leo Wholesalers was posted as an invoice in the Creditors'
ledger. The CPJ was correct.
(d) A debit note of R1 280 for goods returned to Zebo Suppliers was recorded in the
Creditors' Journal in error and posted to the General Ledger accordingly. Posting to
the Creditors' ledger was correctly done from the document.
(e) VAT of R1 720 was omitted from an invoice from Zebo Suppliers.
(f) Equipment purchased on credit from Blackwood Manufacturers, R4 900, was
incorrectly posted to the account of Leo Wholesalers.
(g) An invoice for R3 575 from Zebo Suppliers was incorrectly posted as R3 375 to their
account in the Creditors' Ledger. The posting to the general ledger was correct.
40

ACTIVITY 7 (CREDITORS RECONCILIATION & INTERNAL CONTROL) (26 marks; 20 minutes)

We-R-Healthy Traders buys and sells fresh fruit and vegetables. A statement of account received on
28 March 2020 from creditor Vegan Wholesalers, showed a different balance to the one in the Creditors
Ledger account of Vegan Wholesalers.
REQUIRED
7.1 Adjust Vegan Wholesalers account in the Creditors Ledger by correcting the errors and
omissions. Give a short explanation in the details column. (10)

7.2 Prepare the Creditors Reconciliation Statement for Vegan Wholesalers for March 2020 (12)
7.3 The owner of We-R-Healthy Traders is unhappy about all the errors and inaccurate records.
Explain TWO internal control measures that We-are-Healthy Traders can implement in order
to have efficient control over creditors and to prevent this from happening again. (4)
INFORMATION
CREDITORS LEDGER OF WE-R-HEALTHY TRADERS
VEGAN WHOLESALERS C4
Debit Credit Balance
2020
March 1 Account rendered 18 190
6 EFT 321 17 051 1 139
Discount 1 139 0
8 Invoice 590 18 187 18 187
10 Debit note 9 848 17 339
14 Invoice 810 25 745 43 084
16 Joumal voucher 50 2 055 41 029
17 Debit note 2 1 737 39 292
19 Invoice 41 675 39 967
22 EFT 410 18 255 21 712
29 Invoice 56 32 859 54 571
 Gr 11 Accounting T1, 2023 7 Revision Activities

Statement of Account from Vegan Wholesalers:

VEGAN WHOLESALERS
P.O. Box 468, Franschhoek 7640 Tel: 076 485 22 223
We-R-Healthy Traders Date of Statement: 25 March 2020
P.O. Box 72
Simondium, 7960 Credit limit: R40 000
Debit Credit Amount
2020
Mar 1 Account rendered 18 190
6 EFT 321 17 051 1 139
8 Invoice 590 18 187 19 326
10 Credit note 38 794 18 532
10 Credit note 42 4 155 14 377
16 Invoice 810 26 159 40 536
17 Credit note 39 1 737 38 799
19 Credit note 41 675 38 124
22 EFT 410 18 255 19 869
Discount 1 155 18 714

ADDITIONAL INFORMATION:
1. Vegan Wholesalers rejected the discount claimed by We-R-Healthy Traders on 6 March.They indicated
that We-R-Healthy Traders do not qualify for discount as their payment was late.
2. There is a dispute over goods returned by We-R-Healthy Traders per debit note 9. Vegan Wholesalers
indicated that We-R-Healthy Traders are at fault. Credit note 38 is correct.
3. Credit note 42 on Vegan Wholesalers' statement was issued to one of their other customers, Healthy
Stores.
4. Invoice 810 is correct in the records of We-R-Healthy Traders.
5. Vegan Wholesalers also bought goods on credit from We-R-Healthy Traders. They agreed that the
smaller balance will be recovered from the bigger balance. The accountant of We-R-Healthy Traders
received instructions to transfer the debit balance of R2 055 on Vegan Wholesalers' account in the
Debtors ledger to their account in the Creditors' ledger. Vegan Wholesalers will make this transfer entry
in the next month.
6. Credit note 41, R675, received from Vegan Wholesalers was incorrectly entered as invoice 41 in the
Creditors ledger.
7. We-R-Healthy Traders did not enter the discount due to them on 22 March 2020.
8. Vegan Wholesalers closed their statement of account on 25 March 2020 and emailed it to We-R-Healthy
Traders.
Gr 11 Accounting T1, 2023 8 Revision Activities

FIXED ASSETS
Fixed assets | lifespan (economical/useful life) of assets | historical cost | carrying value (book value)
Basic
residual value | fully depreciated asset | replacement value | asset disposal | accumulated depreciation
concepts
depreciation | % on cost | straight line method | % on carrying value | diminishing balance method

ACTIVITY 1 Asset disposal - Ledger accounts (40 marks; 32 minutes)

The information relates to TLC for the financial year ending 31 December 2020.
REQUIRED
1. Prepare the accounts in the Genera Ledger for the financial year. Close off all the accounts
on 31 December 2020.
1.1 Equipment (9)
1.2 Accumulated depreciation on Equipment (17)
1.3 Asset disposal (8)
2. Name TWO risks that fixed assets are exposed to and TWO control measures to prevent
(6)
these risks.
INFORMATION
Saldo's op 1 Januarie 2020 (die eerste dag van die financial year)
Equipment R320 000
Accumulated depreciation on Equipment R172 200
Depreciation on equipment is calculated at 20% p.a. on carrying value.
TRANSACTIONS during 2020
July 1 Old equipment was sold for R38 000 and an EFT was received. The equipment was
original bought for 1 September 2018 at R60 000.
Oct 31 New equipment was purchased. 10% of the cost price was paid to IHU and the balance
will be paid in six monthly instalments of R11 700.
Dec 31 Provide depreciation for the 2020 financial year. 40

ACTIVITY 2 (Fixed asset note & Asset disposal) (30 marks; 25 minutes)
The information relates to PPE Traders.Their financial year ended on 28 February 2020.
REQUIRED
2.1 Provide a reason as to why Land & Buildings is usually not depreciated. (2)
2.2 Briefly explain why depreciation is described as a 'non-cash item' (2)
2.3 Refer to Information B.
Prepare the Asset Disposal account on 28 February 2020. (10)
2.4 Calculate the missing amounts labelled (A) to (I) in the Fixed assets note. (16)
INFORMATION
A. Tangible / Fixed Assets:
Land &
Buildings
Vehicles Equipment
Carrying value: beginning of financial year 160 000 57 800 (F)
Cost 160 000 80 000 52 000
Accumulated depreciation 0 (22 200) (G)
Movements
Additions at cost (A) 60 000 5 000
Disposals at carrying value 0 (B) 0
Depreciation 0 (8 670) (4 800)
Carrying value: end of financial year 250 000 (E) (I)
Cost 250 000 (C) (H)
Accumulated depreciation 0 (D) (37 300)
Gr 11 Accounting T1, 2023 9 Revision Activities

B. Asset disposal
An old vehicle was traded-in and a new vehicle was bought to replace it on
28 February 2020. The old vehicle cost R30 000 several years ago and was depreciated
by R20 382 at the date of sale (this includes the depreciation for the current year). A small
profit of R200 was made on the trade-in.
30

ACTIVITY 3 (Fixed asset note) (17 marks; 15 minutes)

The information relates to Twala Computer Shop. The financial year ended on 28 February 2020.
REQUIRED
Complete the Fixed/Tangible Asset note. (17)
INFORMATION
Extract of balances on 28 February 2019
Land & Buildings 1 147 800
Equipment 540 000
Accumulated depreciation on equipment 210 000

Adjustments / Additional information

A. The shop premises were extended at a cost of R160 000. This was paid and recorded in
July 2019. However, the bookkeeper had incorrectly debited the Repairs account in the
ledger.
B. Equipment
• Certain unused equipment was scrapped at book value on 30 November 2019. The cost
price was R72 000 and the accumulated depreciation at the beginning of the year was
R40 000. No entry has been made.
• Depreciation are written off at 10% p.a. on cost.
17

ACTIVITY 4 (Fixed asset note & Fully depreciated asset) (20 marks; 17 minutes)
The information relates to Adler Traders. Their financial year ended on 28 February 2021.
REQUIRED
4.1 Complete the Fixed asset note by calculating and filling in the missing amounts in the (17)
Answer book.
4.2 Calculate the profit or loss (indicate your choice) on the sale of the asset on (3)
31 October 2020.
INFORMATION
VEHICLES
March 2020 1 The business owned only one vehicle.
Nov 2020 1 A second vehicle was purchased.
Vehicles are depreciated at 15% p.a. on the cost price.

EQUIPMENT
• Depreciation is written off at 20% p.a. on the diminishing balance method.
• Unused equipment was sold for R42 000 on 31 October 2020. The cost price of the equipment
sold was R70 000. Accumulated depreciation on 1 March 2020 on these items amounted to
R36 250.
• On 1 January 2021 new equipment was purchased for R78 000. 20
 Gr 11 Accounting T1, 2023 10 Revision Activities

PARTNERSHIPS: ACCOUNTS
accounting cycle | accounting equation | capital account (per partner) | current account (per partner)
Basic drawings (per partner) | salary (per partner) | interest on capital | appropriation account | profit
concepts sharing | primary division of profit | final accounts | gross profit | net profit | trading account
profit & loss account | appropriation account

BASELINE KNOWLEDGE
Sole trader vs. Partnerships: unique accounts and final accounts
SOLE TRADER PARTNERSHIPS
ONE owner: One Capital account TWO or more owners: (for EACH owner/partner)
Capital: Partner A; Capital: Partner B
One Drawings account Drawings: Partner A; Drawings: Partner B
Current a/c: Partner A; Current a/c: Partner B
The net profit is transferred... The net profit is transferred...
FROM: Profit and Loss a/c (final a/c) FROM: Profit and Loss a/c (final a/c)
TO: Capital a/c (balance sheet a/c; owners TO: Appropriation a/c (final a/c) to record
euity a/c) the distribution of the net profit between partners
according to the partnership agreement
Drawings a/c is closed off to Capital a/c at the end Drawings a/c of each partner is closed of the
of the financial year (the capital contribution of the Current a/c of each partner at the end of the
owner is decreased) financial year.

Capital a/c balance varies every year as net profit is Capital a/c balances will only change if a partner
added and drawings subtracted. increases or decreased his/her capital contribution.

Final accounts: Final accounts:

Trading a/c; Profit and loss a/c Trading a/c; Profit and loss a/c
Appropriation a/c

REVERSING ENTRIES
• Reversing entries are made at the beginning of the new accounting period.
• Some adjustment entries made at the end of the previous accounting period are simply reversed
• The ONLY adjustments that are reversed are:
Adjustment entry Reversing entry
Accrued income Dr Accrued income Cr Accrued income
Prepaid expenses Dr Prepaid expenses Cr Prepaid expenses
Accrued expenses Cr Accrued expenses Dr Accrued expenses
Income received in advance Cr Income received in advance Dr Income received in advance

NOTE:
Adjustments for depreciation, bad debts and other adjustments are never reversed.
 Gr 11 Accounting T1, 2023 11 Revision Activities

ACTIVITY 1 (GAAP; AOL / Ledger) (35 marks; 25 minutes)

1.1 GAAP PRINCIPLES
Choose an explanation from COLUMN B that matches the GAAP principle in COLUMN A.
Write only the letter (A-E) next to the question number in the ANSWER BOOK.
COLUMN A COLUMN B
1.1.1 Historical cost A Income and expenses must be recorded in the correct
financial period.
1.1.2 Prudence B The assumption is that the business is financially strong
enough to continue for the foreseeable future.
1.1.3 Matching C An asset is recorded at its original cost price.
1.1.4 Going concern D Financial results are reported in a conservative manner.
E The business transactions are to be treated separately
from the owner’s personal transactions.
(4)

1.2 TRANSACTION ANALYSIS

MD Stores is owned by two partners, M. Marks and D. Davids.
REQUIRED
Show the effect of the following transactions on the accounting equation. The bank balance
is favourable at all times and the perpetual stock system is used. The first transaction has
been completed as an example.
E.G. Paid wages by cheque, R8 000.
1.2.1 Received R455 from a debtor in settlement of his account of R500.
1.2.2 Davids took stock at cost for personal use, R2 000.
1.2.3 Marks contributed an additional R20 000 capital in cash.
1.2.4 Marks contributed a vehicle worth R180 000 to be used for delivery purposes as
additional capital contribution.
1.2.5 Received an invoice from PNA for goods R5 000, and stationery for office use
R200. (31)

35

ACTIVITY 2 (Parntership - Ledger) (45 marks; 30 minutes)

Harry and William are in partnership trading as Prince Traders that sell sporting goods to the general public.
REQUIRED
2.1 Refer to Information B:
Calculate the correct net profit for the year ended 28 February 2019. (7)
2.2 Complete the following General Ledger accounts, properly closed off at the end of
February 2019:
• Capital: William (5)
• Current account: William (17)
• Appropriation account (16)
INFORMATION
A. Balances/Totals on 28 February 2019:
Capital: Harry R660 000
Capital: William 520 000
Current account: William (1 March 2018) (Dr) 8 800
Drawings: William 214 500
Gross Sales 4 820 000
Debtors allowances 20 000
 Gr 11 Accounting T1, 2023 12 Revision Activities

GENERAL LEDGER OF PRINCE TRADERS

Dr Current account: Harry (B3) Cr
2018
Mar
1 Balance b/d 14 000
2019
Feb
28 Interest on Capital 59 400

B. Adjustments
The bookkeeper has calculated the net profit as R735 425 but has failed to consider the
following adjustments:
• William introduced an extra vehicle worth R220 000 as capital on 31 January 2019
• The provision for bad debts needs to be decreased by R2 600
• An annual insurance premium of R8 100 was paid and recorded on 1 December 2018.
No adjustment entry has been made.
• Commission income received, R4 100 is for the next financial year. Make the
necessary adjustment.
• William earns a fixed monthly salary. He has withdrawn his salary for 13 months.
There are no other drawings.

C. Partnership agreement
The partnership agreement provides for the following:
• Interest on capital is paid to both partners at a fixed % per year.
• Harry earns R2 500 per month more than William as a salary.
• William earns a bonus of 1% of the net sales.
• Remaining profit will be divided equally between Harry and William.

45

ACTIVITY 3 (AOL & Partnership ledger) (30 marks; 24 minutes)

(NOTE: This activity consists of two seperate questions)

REQUIRED
3.1 Analyse the transactions according to the accounting equation in your Answer Book.
3.1.1 Trading stock, R50 000 were bought on credit.
3.1.2 Stationery, R350, previously bought on credit, were returned to the supplier as it
was not according to order.
3.1.3 Partner Jabu withdrew her monthl salary of R11 000.
3.1.4 A bonus of R20 000 was granted to Partner Cherryl.
3.1.5 Cash sales amounted to R12 000. A 50% profit margin on cost was applied. (6)
The information relates to J&B Stores, with partners Becca and Janet. Their financial year ended on
31 March 2021.
3.2 Complete the following ledger accounts, properly closed off on 31 March 2021:
• Appropriation account (15)
• Current account: Becca (9)
 Gr 11 Accounting T1, 2023 13 Revision Activities

INFORMATION
Balances and totals on 31 March 2021
Capital: Becca R800 000
Capital: Janet 500 000
Current account: Becca (1/4/2020) 5 600 (Dr)
Current account: Janet (1/4/2020) 36 000 (Cr)
Drawings: Becca ?
Drawings: Janet ?
Profit and Loss (profit) 800 750
Interest on capital (Janet) 25 000
Sales 2 400 000

Information from the partnership agreement:

1. Becca earns a salary of R15 000 per month and Janet R144 000 per annum. Becca withdrew
75% of her salary and Janet the full amount. It was their only drawings for the year.
2. Interest on capital is paid at a fixed % on capital contributions. Note the following:
• Becca contributed an extra R200 000 capital on 1 January 2021. It was correctly
entered.
• Janet's capital contribution remained unchanged during the year.
3 Janet earns an annual bonu of 1% of sales.
4. The final distribution of profit is in the ratio of the capital balances on 31 March 2021.
30

ACTIVITY 4 (Partnerships - Final accounts) (50 marks; 50 minutes)

The information relates to Zuzter Traders, with partners Zuzuko and Terry. Their financial year ended on
28 February 2021.
REQUIRED
4.1 Prepare the following accounts in the General Ledger (Show workings in brackets):
Trading account (9)
Profit & Loss account (33)
NOTE: Some amount have been entered in the Answer Book.
4.2 Calculate the final distribution amount approriated to EACH partner. (8)
Tip: You may draw up an Appropriation account.

INFORMATION
PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2021
Statement of Financial Position Section DR CR
Capital:Zuzuko 260 000
Capital: Terry 200 000
Current account: Zuzuko 8 900
Current account: Terry 22 100
Drawings: Zuzuko 20 000
Drawings: Terry 30 500
Gr 11 Accounting T1, 2023 14 Revision Activities

Vehicles 130 000

Equipment 210 000
Accumulated depreciation on equipment 46 400
Fixed Deposit: GDP Bank 324 000
Trading stock 77 705
Debtors control 46 480
Creditors control 15 000
Accrued income (Commission) (1 March 2020) 1 000
Provision for bad debts 2 500
Pension fund 600
SARS - PAYE 1 900
Bank overdraft 12 177
Loan: PDP Bank (12 % p.a.) 180 000
Nominal Accounts Section
Sales 730 685
Cost of sales 497 700
Debtors allowance 18 800
Advertising 31 605
Bank charges 10 500
Bad debts 8 900
Commission income 2 000
Discount received 13 880
Pension fund contribution 3 395
Insurance 18 000
Interest on overdraft 3 400
Interest on fixed deposit 1 723
Packing material 29 800
Rent income 21 300
Salaries and wages 39 580
1 510 265 1 510 265

Adjustments and additional information

A. An annual insurance premium of R11 400 was paid on 1 January 2021.
B. Interest on the mortgage loan is capitalised. The annual loan statement from PDP Bank
on 28 February 2021 reflected:
Balance on 1 March 2020 R194 000
Interest for the year capitalised ?
Repayments including interest (5 500 x 12) (66 000)
Balance on 28 February 2021 R150 000

R54 800 of the loan will be repaid in the next financial year.
C. Debtor, G. Fisch, whose debt had previously been written off, paid R120. The bookkeeper
incorrectly credited the amount to Bad debts.Correct the error.
D. Stanley, a debtor who still owes R2 520 must be written off. Adjust the provision for bad
debts to 5% of the outstanding debts.
E. Commission for 2021 not received yet, R1 200. Note that the reversal entry for the 2020
commission was not made on 1 March 2020.
F. A stock-take on 28 February 2021 revealed the following:
• Packing material on hand, R190
• A trading stock deficit of R4 800
 Gr 11 Accounting T1, 2023 15 Revision Activities

G. Rent received from the tenant included the rent for March 2021. The rent was increased
by R450 per month on 1 December 2020.
H. Provide for depreciation for the year:
• Vehicles at 10% p.a. on cost price. All vehicles were purchased at the beginning of the
fnancial year.
• Equipment at 15% p.a. on the diminishing balance method. New equipment of
R16 000 was purchased and correctly recorded on 1 November 2020.
I. An employee did not receive her February salar as she was in self-isolation due to Covid.
Her details was left out of the February Salaries journal:
Gross Salaries R9 000
Less: PAYE deduction 1 560
Less: Pension deduction 800
Net Salaries ?
Zuzter Traders contribute to the Rights Pension Funds on a rand-for-rand basis.
J. It is confirmed the business has a bank overdraft at the end of the financial year.
K. The partnership agreement allows for the following:
• Salaries to each partner: R3 000 per month
• Interest on capital at 10% p.a.
NOTE: Terry increased his capital by R50 000 on 1 September 2020. It was properly
recorded.
• Zuzuko is entitled to an annual bonus of 20% of the net profit.
•
• Remaining profits or losses are shared equally between the partners.
L. The final net profit for the year amounted to R42 090.
50

Solutions:
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