CACN011: FINANCIAL ACCOUNTING IA- JUNE 2022 Question 1 [35 marks | 52,5 Minutes] Financial Fitness (FF) is a small finan

[answerhappygod]

Cacn011 Financial Accounting Ia June 2022 Question 1 35 Marks 52 5 Minutes Financial Fitness Ff Is A Small Finan 1 (65.03 KiB) Viewed 30 times

Cacn011 Financial Accounting Ia June 2022 Question 1 35 Marks 52 5 Minutes Financial Fitness Ff Is A Small Finan 2 (63.91 KiB) Viewed 30 times

Cacn011 Financial Accounting Ia June 2022 Question 1 35 Marks 52 5 Minutes Financial Fitness Ff Is A Small Finan 3 (65.83 KiB) Viewed 30 times

Cacn011 Financial Accounting Ia June 2022 Question 1 35 Marks 52 5 Minutes Financial Fitness Ff Is A Small Finan 4 (66.01 KiB) Viewed 30 times

Cacn011 Financial Accounting Ia June 2022 Question 1 35 Marks 52 5 Minutes Financial Fitness Ff Is A Small Finan 5 (60.82 KiB) Viewed 30 times

CACN011: FINANCIAL ACCOUNTING IA- JUNE 2022 Question 1 [35 marks | 52,5 Minutes] Financial Fitness (FF) is a small financial consulting practice owned and managed by Musa Lefu and Davis Musk as its shareholders. The pre-adjustment trial balance of Financial Fitness on 31 March 2022 is as follows: Bank balances Accounts receivable Rent paid in advance Office supplies on hand Office computers and printers Motor vehicles Call deposit held with FNB Wesbank wheels loan Financial Fitness (PTY) Limited Trial Balance 31 March 2022 Trade creditors Fees received in advance Share capital as of 1 March 2022 Distributions Fees earned Petrol expense Advertising expense Salaries expense Interest expense Account No. 101 112 115 118 122 125 128 312 309 318 401 721 502 501 21 Page 505 507 518 DR 48 075 4 000 4 000 1500 40 000 100 000 10 000 6 000 300 800 2425 500 CR 100 000 1600 7.000 100 000 9 000 The following internal transactions still need to be considered on 31 March 2022: (i) On 20 March 2022. Ann Parker paid Financial Fitness R7 000 for seven consultations to be provided over the coming months. R7 000 was recorded in the fees received in the advance account. By 31 March 2022, two consultations to the value of R2 000 had been held with her. (ii) On 1 March 2022, Musa transferred R10 000 from the business bank account to a call deposit at the bank, earning interest at 3% per annum. The amount of R10 000 was recorded in the call deposit account. On 31 March 2022, Financial Fitness accounted for the interest earned for the month. (i) On 1 March 2022, Davis found premises in Hyde Park. The monthly rental for the office space was R1 000 per month. The business paid rent, in advance, for four months on 1 March 2022, and R4 000 was recorded in the rent paid in the advance account. On 31 March 2022, Financial Fitness accounted for the rent expense for the month. (iv) On 31 March 2022, the telephone account for R200 and the light and water account for R300 arrived in the post. These accounts must be paid by 10 April 2022.

CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 (v) On 2 March 2022, Financial Fitness purchased office supplies from Office World for R1 500, which was recorded in the office supplies account. On 31 March 2022, Tom counted office supplies on hand, costing R1 300. (vi) On 2 March 2022, Financial Fitness purchased computer equipment for R15 000 and office equipment for R25 000. The amount of R40 000 was recorded in the computer and office equipment account. All the equipment was expected to have a useful life of ten years. Financial Fitness also purchased a new motor vehicle for R100 000 on the same day that was recorded in the motor vehicle account. The estimated useful life of the vehicles is five years. On 31 March 2022, Financial Fitness accounted for the equipment and motor vehicles used for the month. (vii) Financial Fitness uses a share capital account as the equity account. The unadjusted share capital balance represented accumulated earnings and contributed share capital of R38 000 and R62 000. You are required to: a) Prepare the statement of profit or loss for FF Limited for the reporting periods ended 31 March 2022. [12marks] b) Prepare the statement of changes in equity for FF Limited for the reporting period ended 31 March 2022. [5 marks] c) Prepare the statement of financial position for FF (PTY) Limited as of 31 March 2022. [20 marks]

CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 Question 2: [37 marks 55 Minutes] The Flying Kite (PTY) Limited, owned by Josh String and Caleb Fuse, sells kites and related accessories. The Flying Kite uses the perpetual inventory system to account for inventory movements. The trial balance on 31 March 2022, the end of the accounting period, is shown below: Share capital Equipment at cost Accumulated depreciation: Equipment Accounts receivable Accounts Payable VAT control Input VAT receivable Output VAT payable Bank Merchandise inventory Sales Cost of sales General expenses Salaries & wages Entertainment and hospitality Dr R100 000 45 550 4950 6980 122 500 256 000 43 790 41 Page 57 360 3.330 The following transactions for March 2022 have not yet been processed: CR R200 000 26 000 44 960 2 540 8360 358 600 (1) Bought kites on credit from Wild Toys. The cost price amounted to R12 800 (excluding VAT). (ii) Paid R365 to North Transporters for transporting inventory purchased to the store. (i) Sold inventory with a cost of RB 900 on credit to The Saints Club. This sale was priced to realise a profit margin of 50 per cent on cost. (iv) Bought inventory and paid by bank transfer to supplier operating a bank account with standard bank. A tax invoice was received for R4 560. (v) Sold inventory with a mark-up of 33.3% on cost for cash for R1 368. (vi) The Saints Club returned faulty merchandise, which had been recorded on the tax invoice for a total of R342. (vii) Received the monthly statement from the Johannesburg Country Club in respect of March's entertainment expenses, and an amount of R450, excluding VAT, was payable. (vii)Prepared and approved a bank transfer for R2 540 to the SARS in settlement of February's VAT liability. (ix) Received an electronic funds transfer from Saints Club for R12 200 You are required to: a) Prepare the journal entries to record the above transactions in the accounting records of Flying Kite (PTY) Limited. Ignore narrations to the general journal entries. [31 marks] b) Prepare the input VAT receivable and output VAT payable accounts in the general ledger of Flying Kite (PTY) Limited. [6 marks] ||

CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 Question 3 [15 marks | 23 minutes] Anita Sukari was just hired as the assistant treasurer of Sofiatown Stores. The company is a speciality chain store with nine retail stores concentrated in one metropolitan area. Her primary responsibility is to maintain the company's high credit rating by paying all bills when due and taking advantage of all settlement discounts. The payment of all invoices is centralised in one of the departments Anita will manage. Chris Dadiani, the former assistant treasurer who has been promoted to treasurer, is training Anita in her new duties. He instructs Anita that she is to continue the practice of preparing all bank transfers "net of discount" on the accounting system and dating the bank transfers on the last day of the discount period. "Buf", Chris continues, "we always hold the bank transfers at least 4 days beyond the discount period before releasing the payment from the systems. That way, we get another 4 days of interest on our money. Most of our creditors need our business and don't complain. And, if they scream about our missing the discount period, we blame it on the system. We have only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!" You are required to: a. document the ethical considerations in this case? [3 marks] b. Identify the stakeholders that are harmed or benefitted in this situation? [2.5 marks] c. Suggest options available to Anita and whether she should continue the practice started by Chris. [9.5 marks]

CACN011: FINANCIAL ACCOUNTING IA-JUNE 2022 Question 4 [13 marks 20 minutes] On 10 April 2022 fire damaged the office and warehouse of Klausi Lighting. Most of the accounting records were destroyed, but the following account balances were determined as of 31 March 2022: Inventory (January 1, 2022), R80,000. Sales revenue (1 January-31 March 2022), R180,000. Purchases (1 January-31 March 2022), R94,000. The company's fiscal year ends on 31 December. The company uses periodic inventory system. From an analysis of the April 2022 bank statement, you discover honoured electronic funds transfers of R4,200 for cash purchases from April 1-10. Deposits during the same period totalled R20,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales. Correspondence with the company's principal suppliers revealed R12,400 of purchases on account from 1-10 April 2022. Of that amount, R1,900 was for merchandise in transit on 10 April that suppliers shipped under the terms of FOB destination. Correspondence with the company's principal customers produced acknowledgements of credit sales totalling R37,000 from 1 to 10 April. It was estimated that R5,600 of credit sales would never be acknowledged or recovered from customers. Klausi Lighting agreed with the insurance company that its fire-loss claim should be based on the average of the gross profit rates for the preceding two years. The company secretary observes that "in future, there will be no need to take physical inventory count if the insurance company accepts our calculations of inventory damaged by the fire." You are required to: a) Determine the balances in (1) sales revenue and (i) purchases accounts on 10 April 2022. [5 marks] b) Comment on the validity of the company secretary's observations. In your answer, identify the uses of the gross profit method of estimating closing the inventory. [8 marks]