MIDLANDS STATE UNIVERSITY FACULTY OF BUSINESS SCIENCES DEPARTMENT OF ACCOUNTING SCIENCES FINANCIAL ACCOUNTING FOR BUSINESS 1A CODE: ACC135/ACC105 SESSIONAL EXAMINATIONS. NOVEMBER/DECEMBER 2022 DURATION: 3 HOURS INSTRUCTIONS TO CANDIDATES ‘The paper consis of 3 questions Lnswor i question Secton ond any two (2) questions section. ‘Moke and state any reasonable assumptions mde in ‘answering the question ‘Non: programmable silent finan coleulator moe used.SECTION A LUESTION 1 [40 MARKS) ‘at 31 December 2021. [Mr Matiki i operating sole trader business in Rusape, He extracted a pre — adjusted trial balance (@) Inventory on 31 December 2021 ‘Trading inventory $6 500 Debit Credit 3 3 Capital 250 000 Drawings 4400 Land and buildings (at cost) 180 000 Vehicles (at cost) 120.000 Furniture (at cost) 15.000 Inventory: Trading — 1 Jan 2021 4.000 Debtors control 40140 Bank 5.900 Accumulated depreciation: vehicles 26 | Accumulated depreciation: furniture 3 Creditors control 30750 Sales 253615 Sales returns 615 670 480 2 170 550 5 Carriage on purchases 400, Credit losses (Bad debts) 230 Insurance 2750 Packaging material 800 Salaries 38.500 Water and electricity 3.300 387255_| 587255 ADDITIONAL INFORMATION: Page 2 ofPackaging material S175 () Debtor $ Sorry is insolvent; irrecoverable. to him in advance. (6) Delivery fees of $100 on purchases have not been paid yet. 2021 (0, Rent income has been paid until the end of January 2022. outstanding (@) Provision must be made for depreciation as follows: Vehicles — $15750 Furniture — $1275 to prepare: ended 31 December 2021 (15 marks) 'b. A Statement of changes in Equity forthe year ended 31 December 2021 marks) ‘c. A Statement of Financial position as at 31 December 2021 (15 marks) ‘4. Property, Plant and equipment note as 31 December 2021 (7 marks) SECTION B- ANSWER ANY THREE QUESTIONS )UESTION 2 [20 marks} came, (© Anemployee is on leave and his January 2022 salary of $1 500 has been paid (©) Aninsurance premium of $250 per month has been paid until the end of March (@) $880 commission was eared on 28 December 2021; the amount is still ‘a, A Statement of profit or loss and other comprehensive income for the year Draw and complete the following table outlining the contents and purpose of each source ‘SOURCE DOCUMENT | CONTENTS PURPOSE ‘Quotation Purchase Order age 316ales Order Goods delivery note joods received nove Tatement of accounts edit note Debit note rmittance advice STION 3 [20 marks} following transactions transpired during October 2021 relating to Jones Electricians: Date ‘Transactions ‘Amount 0920 5 1 | Jones, the owner, deposited as opening capital 10 000 1 | Obsained loan from SA Bank 6.000 3 Bought equipment on credit from Sparks Dealers 1000 9 Issued a cheque for an advertisement ina local news Paper 200 2 Paid the telephone account by cheque 15 B Received a cheque from H House for services rendered 500 7 Drew a cheque for private use 2.000 ery ‘As an additional capital contribution W Blits transferred his motor vehicle to the business 9.000 a salaries by cheque 2000 30 Issued a cheque to SA Bank as a repayment on the loan 1500 ‘sng the above information prepare a Trial Balance as at 31 October 2021. (20 marks) rage 406eee 4 [20 marks] following information relates to Marshal: Balances at 30 June 2021 (extract) (@ Only 11 months’ rent was received. () Stationery on hand on 30 June 2021 amounted to $50. (©) R600 commission was received in advance. () Anadditional amount of $150 must be written off as irrecoverable. (© Provision must be made for depreciation of $30 000 on machinery. (9 June 2021's water and electricity account of $160 has not yet been ps ‘You are required to open the above in the general ledger @o JUESTION § [20 marks} i. Cash made for all expenses eg. by cheque “Transactions not recorded in other journals e.g. ereit losses Returns of goods by debtors jv. Credit sale of goods ¥, Returns of goods to creditors vi, Cash received; electronic receipts vii Credit purchases of goods bb) State and explain any three reasons for preparing a tril balance mi Debit 3 5 Rent income 6600 Stationery 350 Water and electricity 1800 ‘Commission income 5.600 Credit losses 280 ‘Accumulated depreciation: machinery 30 000' Debtors control 11150 Machinery at cost 200.000 ADDITIONAL INFORMATION: fa) Name the book of prime entry forthe transactions below (7 marks) yarks) Pages of{9} State 7 errors that does not affect atrial balance Crmarts 192 6 of 6