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TSHWANE WEST DISTRICT

D15
GR 11 CONTROLLED TEST: MARCH 2023

INSTRUCTIONS AND INFORMATION:

Read the following instructions carefully and follow them precisely.

1. Answer ALL the questions.

2. A special ANSWER BOOK is provided in which to answer ALL the questions.

3. Show ALL workings to earn part-marks.

4. You may use a non-programmable calculator.

5. You may use a dark pencil or blue ink to answer the questions.

6. Where applicable, show all calculations to ONE decimal point.

7. Write neatly and legibly.

Q1 FIXED ASSETS 47 marks 44 minutes

Q2 BANK RECONCILIATION 35 marks 32 minutes

Q3 CREDITOR’S RECONCILIATION 18 marks 14 minutes

TOTAL 100 marks 90 minutes

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QUESTION 1 FIXED ASSETS (47 Marks: 44 Minutes)

1.1 Match Column A (GAAP principle) with column B (description)

Only write the applicable letter next to the question number e.g 1.1.1 E (7)

COLUMN A COLUMN B
1.1.1 Going concern Once it has been decided to depreciate computers
A by 25% p.a. on cost price, the same method must
be used every year

1.1.2 Matching B All assets are entered in the books at the original
cost price as this can be proved and is not
dependent on anyone’s valuation
1.1.3 Prudence C If an asset has only been used for 6 months, it will
be depreciated for 6 months as it will only have
contributed to 6 month’s earnings

1.1.4 Historic cost D The owner bought a new car for his son and paid
for it out of the business bank account. This
amount would be debited to Drawings and not to
Vehicles

1.1.5 Materiality E The value of an asset in the balance sheet is the

reasonable value of an asset still in use in a
business which will continue for the foreseeable
future, not the actual amount it could be sold for

1.1.6 Entity F Assets, with the exception of land and buildings,

will be depreciated as they lose value because of
normal wear and tear. Although land and buildings
usually increase in value, the profit will not be
entered in the books until it is realized - until they
are actually sold.

1.1.7 Consistency G Tangible assets are items used by the business for
longer than 12 months. However, if the business
buys a stapler for the accountant costing R150 it
will last him forever. It will not be considered an
asset as the cost is too small to warrant a page in
the asset register and depreciation calculations for
years.

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1.2 The following information was extracted from the books of KMC Fitness
1.2.1 Prepare the Asset Disposal Account for the vehicle that was
sold on 1 February 2022. (13)
1.2.2 Prepare the Tangible Asset Note in the Balance Sheet as at

28 February 2022. (27)

INFORMATION:

A . List of balances on 28 February 2022

Land and Buildings 11 800 000

Vehicles 810 000
Equipment ?
Accumulated depreciation on vehicles (1 March 2021) 387 600
Accumulated depreciation on equipment (1 March 2021) 80 325

B. Land and Buildings

A building was purchased during the financial year for R2 000 000.
This has been properly recorded.
Land and buildings to the value of R980 000 were sold at cost on the
last day of the financial year. The entry has not yet been recorded.

C. Equipment

The following information appeared in the asset register regarding

Gym equipment:

Date Cost price Accumulated

purchased depreciation
1 March 2021
ITEM 1 1 March 2015 R70 000 63 000
ITEM 2 1 June 2018 R50 000 17 325

ITEM 3 1 August 2021 R42 000

• All equipment is depreciated at 15% p.a. on cost.

• Item 3 was purchased during the financial year. The transaction

was recorded properly in the books of the business.

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 D. Vehicles

• A new vehicle costing R230 000 was purchased and paid for on 28
February 2022. This entry has not been recorded.
• On 1 February 2022 a vehicle costing R200 000 was sold on credit for
R72 000. The vehicle had an accumulated depreciation of R140 000
on 1 March 2021. This entry was properly recorded
• Depreciation on vehicles is calculated at 20% p.a. on the
diminishing balance method.

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QUESTION 2: BANK RECONCILIATION AND CONTROL (35 marks, 32 minutes)

The information relates to Zane Traders.

REQUIRED:

2.1 Since banks do not accept cheques as valid payment any more people are mainly
using EFT’s for making payments.

2.1.1 State TWO advantages of internet banking. (4)

2.1.2 Jane, the bookkeeper, has been assigned the duty of processing and
controlling all EFT’s.

Explain why the internal auditor is concerned about this.

What suggestion would you give him to solve this problem? (6)

2.2 Show changes in the Cash Journals for June 2022. (11)

2.3 Calculate the correct Bank Account balance on 30 June 2022. (4)

2.4 Prepare the Bank Reconciliation Statement on 30 June 2022. (10)

INFORMATION:

A. Extract: Bank Reconciliation Statement on 31 May 2022

Outstanding deposit R9 500
Outstanding EFT’s
No. Date
7 14 May 2022 R2 900
14 27 May 2022 R4 670
16 28 May 2022 R7 950
Favourable balance on Bank Account R9 200

NOTE:

The outstanding deposit appeared on the June Bank Statement.

EFT 7 did not appear on the June Bank Statement. The payment was stopped
by us but never cancelled in our books.
EFT 14 did not appear on the June Bank Statement. It is set as a future payment
for 1 July 2022
EFT 16 appeared on the June Bank Statement with the correct amount of R5
250.

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B. Provisional totals in the Cash Journals on 30 June 2022 before receiving the Bank
Statement:

Cash Receipts Journal: R23 470

Cash Payments Journal: R42 400

C. Entries in the Cash Journals NOT on the June Bank Statement:

Deposit, R9 000

EFT 34 (30 June 2022), R3 800

D. Entries on the June 2022 Bank Statement NOT in the Cash Journals:

DATE DETAILS R
15 Debit order: Micro Insurance* 1 125
Debit order: Micro Insurance* 1 125
25 M Malan (EFT by tenant) 2 880
30 Interest on debit balance 130
Credit card levy 125
Service fees 175

*Insurance appeared twice in error. This will be rectified next month.

E: The Bank statement balance on 30 June 2022 is a balancing amount

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 QUESTION 3: CREDITORS' RECONCILIATION (18 marks, 14 minutes)

Roche Stores buys goods on credit from Staxs Suppliers, the information relates to
February 2023.

REQUIRED:

3.1 Use the table in the ANSWER BOOK to indicate how the relevant
balances will change when reconciling the statement from the creditor
and the creditor’s ledger account. Indicate the figure as well as (+) for
increase and (–) for decrease.
(14)

3.2 An investigation into the transaction on 12 February 2023 revealed that invoice
no. 668 on the statement included goods valued at R1 230 ordered by the
warehouse manager for his own personal use

State TWO actions that can be taken against the warehouse manager.
(4)

INFORMATION:

A. Creditors' Ledger of Roche Stores

Staxs Suppliers

DATE DETAILS FOL DEBIT CREDIT BALANCE

Feb 01 Balance b/d 35 700
05 Invoice no. 560 CJ 4 770 40 470
10 EFT CPJ 15 000 25 470
Discount
CPJ 750 24 720
received
12 Invoice no. 668 CJ 5 640 30 360
18 Debit Note 52 CAJ 980 29 380
28 Invoice no. 690 CJ 7 120 36 500

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 B. Statement of account received from STAXS Suppliers

STAXS SUPPLIERS No. 2732

77 Unicorn street
Jo’ville

Debtor: Roche Stores

DATE DETAILS DEBIT CREDIT BALANCE
January 28 Balance 38 830
30 Invoice 376 3 370 42 200
February 01 Receipt 110 8 000 34 200
05 Invoice 560 7 740 41 940
10 Receipt 122 15 000 26 940
12 Invoice 668 6 640 33 580
18 Credit Note 09 980 34 560
22 Invoice 772 3 860 38 420

INFORMATION:

The following errors and omissions were discovered during an

investigation:

A. Invoice 560: The amounts in the statement and ledger differ.

The statement is correct

B. STAXS Suppliers did not award the discount on the payment

made on the 10th. According to them they received the payment
after the due date for discount. STAXS is in the right until
ROCHE can prove otherwise

C. STAXS Suppliers omitted to deduct the trade discount on

invoice 668

D. Invoice 772 was accidentally included in the statement for

Roche Stores. It was for a transaction with Rock Stores

E. The return on the 18th was recorded wrong by one of the

bookkeepers

F. The statement was sent on the 22nd.

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