Study & Master Accounting Grade 10 Study Guide CAPS

Not only does this study guide give you an overview of the content required to master Accounting, it also: • explains key concepts you need to fully understand the subject matter • guides you with introductory activities • includes “Test yourself” questions, with marks, to test your knowledge • provides exemplar papers for both the June and November examinations.

Photocopiable templates in a separate booklet include: • all the important tables and financial reports • answer books for all the exam papers.

Other Grade 10 titles in this series include: • English • Life Sciences • Geography • Mathematical Literacy • Mathematics • Physical Sciences

Study Guide Accounting

Study & Master Accounting Grade 10 Study Guide for CAPS has been developed as an aid to support you throughout the school year.

CAPS

Accounting

This icon in the study guide indicates where you can use these templates.

Study & Master Accounting Study Guide for CAPS is a comprehensive guide that will give you all the support you need to prepare for your exams.

CAPS

Study Guide 10

Accounting

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Study Guide 10

Study & Master

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Study & Master

Study & Master

CAPS

10

Elsabé Conradie | Derek Kirsch | Mandy Moyce

Study & Master

Study Guide 10

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Accounting

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ElsabĂŠ Conradie | Derek Kirsch | Mandy Moyce

The Water Club, Beach Road, Granger Bay, Cape Town 8005, South Africa Cambridge University Press is part of the University of Cambridge.

It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence. www.cambridge.org Information on this title: www.cambridge.org/9781107425606 Š Cambridge University Press 2014 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.

First published 2014 Printed in South Africa by Creda Communications

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isbn 978-1-107-42560-6 Paperback

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Editor: Christine de Nobrega Typesetter: Brink Publishing & Design

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Every effort has been made to trace copyright holders. Should any infringements have occurred, please inform the publishers who will correct these in the event of a reprint.

Contents

Exam tips and advice Accounting terminology and revision of Grade 9 work .......................... 1

Chapter 2

Debtors .................................................................................................... 15

Chapter 3

Creditors .................................................................................................. 25

Chapter 4

Cash journals (additional cash transactions) ........................................... 41

Chapter 5

The General Journal ................................................................................ 59

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Chapter 1

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Chapter 6 Comprehensive activities ........................................................................ 73 Chapter 7

Debtors and creditors reconciliations ...................................................... 82

Chapter 8

Value-added Tax (VAT) ........................................................................... 91

Chapter 9

Salaries and wages .................................................................................. 97

Chapter 10 GAAP, Final accounts and year-end adjustments ................................... 106

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Chapter 11 Financial statements of a sole trader ....................................................... 130 Chapter 12 Analysis and interpretation of financial statements ................................. 142

Chapter 13 Cost Accounting ...................................................................................... 155

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Chapter 14 Budgeting ................................................................................................ 163 Chapter 15 Theory ..................................................................................................... 171

Solutions to activities.................................................................................................... 181 Sample exam paper June .............................................................................................

350

Sample exam paper November ................................................................................... 358 Marking memorandum June ...................................................................................... 368 Marking memorandum November ............................................................................ 377

Exam tips and advice Here are some tips to bear in mind when preparing for and writing an Accounting examination:

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• Don't cram or work late the night before your exam – it is very important that you have a good night’s sleep.

• Make sure you have all the necessary stationery and a calculator for the exam.

• Read the questions carefully and make sure that you understand what is being asked of you.

• Try your best to work within the time allocated for each question.

• Show ALL your workings in your Answer Book, as part-marks are usually awarded for calculations even if the final answer is incorrect.

• Show totals and balances as marks are usually awarded for these items even if the amounts are incorrect.

• Write clearly and neatly.

• Try to be concise and to the point when answering theory questions.

• If you are stuck on a particular question or sub-question, rather move on and come back to it later, once you have finished answering the other questions.

• Remember that you don’t need to answer the questions in order, but don’t waste too much time deciding which questions to answer first.

• Leave your weakest topic for last so that you don't waste valuable time struggling with a topic that you find difficult.

• Try to at least attempt all the questions, as each question will have some marks that are easy to obtain.

• Do not leave the exam room until you have completed the entire paper and try not to leave any question un-attempted.

• Be positive, confident and calm – believe in yourself!

Good luck for your exams!

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A booklet of templates has been included with this study guide. Wherever you see this icon, there is a template that you can photocopy and use for your answers.

There are also generic blank ruled pages at the end of this book that you can use for any number of reports.

CHAPTER 1: Accounting terminology and revision of Grade 9 work What you need to know (checklist):

Introduction

I can do this

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Topic Basic accounting terminology: Accounting equation, double-entry principle Calculations: Cost price, selling price, profit mark-up Cash journals General Ledger: Entering opening balances, posting amounts to ledger accounts, balancing ledger accounts, extracting a Trial Balance

1. Assets

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In Grade 9 you learnt the basic accounting concepts and book entries. The best way to understand Accounting in Grade 10 is to: • recap Grade 9 Accounting terminology • understand the accounting cycle and apply it to the bookkeeping process • understand the accounting equation and double entry.

Assets belong to the business. They can be divided into two groups.

Non-current assets

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1.1

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These are long-term assets.

• Fixed assets have a reasonably long lifespan and are bought in order to generate an income for the business. These assets are kept for a long time.

• Investments are assets because money is stored away in a fixed account in order to earn interest.

1.2

Current assets

These are assets that can be converted into cash in the short term. They are used within the businesses activities, for example, stock in bought at a certain price and sold at a higher price to make a profit.

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The following table better explains assets: Non-current assets Fixed assets

Current assets

Investments

Land and Buildings: property Vehicles: cars, trucks, motor cycles Equipment: computers, printers, etc.

Furniture: desks, chairs, etc.

Fixed deposits: money invested for a period of more than a year Notice deposits: money invested for a certain period, which needs a notice of 90 days before it will be paid back

Machinery

Trading stock: goods purchased for resale Debtors control: those who owe money to the business Bank: money in the current bank account Savings account: money in a savings account Cash float: cash in the register/till

2. Owner’s equity

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Petty cash: money used to buy low-cost items, usually not more than R100 per item

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This is the owner’s interest (portion) in the business.

• Capital – The money the owner gives to start up the business • Drawings – The money the owner takes out of the business • Income – are earnings which increase the owners’ equity of the business.

• Expenses – are running costs which are paid in order for the business to operate.

The table lists some income and expense accounts: Expense accounts Cost of sales Salaries Wages Rent expense Telephone

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Income accounts Sales Current income Rent income Commission received

Insurance Stationery Packaging Advertising Repairs and maintenance

Water and electricity

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3. Liabilities

Liabilities are obligations that the business has towards another business because of a credit transaction.

• Non-current liabilities are long-term obligations that will be paid back over a period longer than a year.

• Current liabilities are short-term obligations that will be paid back within a year.

Non-current liabilities Loan: money borrowed to finance business operations Mortgage bond: money borrowed to buy property

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Current liabilities Creditors control: money owed to other businesses Bank overdraft: a facility offered by the bank where you can use more money than you have in your account

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4. The accounting equation All accounting is based on the accounting equation and is represented as follows: Assets = Equity + Liabilities Equity + Liabilities also equals Net Worth or Net Assets.

5. Double-entry principle Every transaction will affect either assets, owner's equity or liabilities. These will either increase or decrease, and the effect is indicated as follows: Assets Decreases with a credit entry

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Dr Increases with a debit entry

Cr

Owner's Equity Increases with a credit entry

Cr

Dr Decreases with a debit entry

Liabilities Increases with a credit entry

Cr

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Dr Decreases with a debit entry

6. Cash transactions 6.1

Cash transactions of a service business

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The main source of income is services rendered. This is called current income.

Examples of service businesses are plumbers, electricians, hairdressers, garden services and painters.

6.2

Cash transactions of a trading business

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The main source of income is sales. A trading business buys items at a certain price and sells them at a higher price. The difference between these two amounts is the business’s income or gross profit.

6.3

Cost price, selling price and profit mark-up

A retailer determines the selling price of an item by adding a profit mark-up to the cost price of the article.

Cost price + profit mark-up = selling price

Example: A retailer buys an item for R18. He wants to make 10% profit, so he adds R1,80 (10% of R18). He therefore sells the article at R19,80.

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Trading stock Items purchased with the purpose of selling them again; also referred to as goods. Trading stock is an asset.

Cost of sales The cost price of trading stock that has already been sold

7. Cost calculations You must be able to do three very important calculations: • Calculation of the selling price of trading stock • Calculation of the cost price (cost of sales) of trading stock sold • The profit mark-up/profit percentage earned on trading stock sold.

7.1

Calculating the selling price

If you are calculating the selling price of trading stock, you need to have the cost price and profit/profit mark-up.

Example: Bought an item for R150. A profit percentage of 20% must be taken into account.

20% of R150 = R30, thus the selling price will be R180.

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Assume the cost price percentage is: 100% 20% Profit percentage: Assume the selling price percentage is: 120% selling price %

= selling price

150 120 × = R180 = 1

×

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cost price

cost price %

1

7.2

100

Calculating the cost price/cost of sales

If you are calculating the cost price of trading stock, you need to have the selling price and profit percentage.

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Example: Sold an item for R240. The profit percentage was 20%.

Assume the cost price percentage is: 100% Profit percentage: 20% Assume the selling price percentage is: 120% selling price

cost price %

×

selling price %

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1

= cost price

=

7.3

240 1

×

100 120

= R200

Calculating the profit percentage

If you are calculating the profit percentage on trading stock, you need to have the selling price and the cost price.

Example: An item that originally cost R200, was sold for R300.

The amount of profit is R300 – R200 = R100. profit

×

100

= profit percentage

100 100 × = 50% = cost price

1

200

4

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8. Purchasing trading stock and its effect on the accounting equation Since trading stock is an asset to the business, you are exchanging one asset for another: Bank (cash) is exchanged for Trading Stock.

Example: Issued a cheque for the purchase of stock to the value of R1 500.

Remember: Assets must still equal Owner's Equity.

Assets

Owner’s Equity

–1 500

Cash decreases

No effect

+1 500

Trading stock increases

In the General Ledger, always follow the double-entry principle.

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Bank is an asset that decreases and is thus credited.

Trading Stock is an asset that increases and is thus debited.

Example: Issued a cheque for the purchase of stock to the value of R1 500.

Account credited Bank

Account debited Trading Stock

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9. Selling trading stock and its effect on the accounting equation

When trading stock is sold, the two amounts involved are: cost price of the items, and the selling price of the items.

The difference between these two is the profit that the owner makes in the business.

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To show the effect of this transaction on the accounting equation, remember the following: • The goods on the shelves/in the storeroom decrease when someone buys them, and we use the cost price.

• The money in the cash register increases when someone pays for the goods, and we use the selling price.

• To determine the profit made on this transaction, we calculate the profit.

Example: Sold goods for R550 cash. The cost price of the goods was R380.

Remember: Assets must still equal Owner's Equity.

Assets

Owner’s Equity

–380

Trading Stock decreases

+170

+550

Bank increases

Profit earned

Always follow the double-entry principle in the General Ledger.

The two accounts affected by the cost price are: • Trading Stock: an asset that decreases and must therefore be credited.

• Cost of Sales: decreases owner's equity and must therefore be debited.

The two accounts affected by the selling price are: • Bank: an asset that increases and must therefore be debited.

• Sales: increases owner's equity and must therefore be credited.

Example: Sold goods for R550 cash. The cost price of the goods was R380.

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Accounts debited Accounts credited Cost of Sales Trading Stock Bank Sales

EFT Electronic Funds Transfer, when you pay electronically using cell phone or Internet banking

10. Cash journals The business uses journals to record all its transactions. One of these journals is called a cash journal and is a “diary” of all the cash transactions of the business.

• A Cash Receipts Journal (CRJ) is used to record all cash received.

• A Cash Payments Journal (CPJ) is used to record all cash paid.

10.1 Documents used during cash transactions • Receipt: document issued when money is received • Cheque: filled in to pay cash • Cash register roll: document from the cash register indicating cash received

10.2 Source documents used to record transactions

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Remember: Cheques, credit cards, debit cards, EFTs and direct deposits all represent cash.

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• Duplicate receipt: kept as proof of money received • Cheque counterfoil: kept as proof that a cheque has been written out to pay for something • Cash register roll: proof of money received for services rendered • Duplicate deposit slip: as proof that money has been paid into the bank

10.3 Posting from the CPJ and CRJ to the General Ledger 10.3.1 Cash Payments Journal In the CPJ, the Bank account is always credited because assets decreased.

Therefore all the other accounts are debited.

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Example

Cash Payments Journal of Cameron Traders – April 2019

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Doc. Day Payee no.

12 10 B&B Books 13 14 XYZ Traders 14 17 Telkom 15 22 Fine Foods

Bank

Fol.

Bank Total payments Stationery 350

Bank

Stationery

350 1 500 550 900 3 300

350

3 300

CPJ1

Trading Sundry accounts stock Amount Fol. Details 1 500 550

350

900 2 400

Telephone

550

Bank

Trading stock 2 400

Bank

Telephone 550

10.3.2 Cash Receipts Journal In the CRJ, the Bank account is still debited (assets increased), while all the other accounts are credited, such as Sales.

Cost of Sales is the exception: it has nothing to do with Bank and must therefore be posted separately. Cost of Sales is debited (increased “expenses”) and Trading Stock is credited (decreased assets).

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Example Cash Receipts Journal of Cameron Traders – April 2019

Doc. Day Payee no.

Bank 11 505 Total payments

Bank

Sales

350 840 315 10 000

350 840

350 840 315

10 315 11 505

Sales Bank

3 300

1 505

200 480 180 860

10 000 10 000

Capital Bank

1 505

Capital

10 000

Trading Stock 2 400 Cost of sales

860

Trading stock

Cost of Sales 860

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Bank

Cost of Sundry accounts sales Amount Fol. Details

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Total receipts

Fol. Analysis of receipts

15 Sales 25 Sales 30 Sales Alma Smit

01

CRJ1

Trading Stock has entries on both sides: The debit side is the entry from the CPJ (Trading Stock increased through purchases).

The credit side is the entry from the CRJ (Trading Stock decreased by the cost of sales).

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10.3.3 Balancing the accounts Balancing an account means calculating how much is in the account at the end of the month. If an account has entries on one side of the account only, they can simply be added. Draw only one line above the total.

Example

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2019 Jan

Stationery

01 Bank

CPJ

100

14 Bank

CPJ

250

CPJ

350

Bank (R/D) (refund)

If the account has entries on the debit and credit side, these must be subtracted from each another to see what is “left over”. Note the double lines below these totals.

Example 2019 Jan

31 Total receipts

Bank CRJ

2019 12 000 Jan 31 Total payments 14 Balance 12 000

Feb

01 Balance

b/d

CPJ

8 000

c/d

4 000 12 000

4 000

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11. Opening balances A business that has been operating for longer than one month, will already have information in the General Ledger from previous months. The closing balances from the previous month become the opening balances of the current month.

They should be identical to the previous month, for example, a closing credit balance of R2 000 must appear as an opening credit balance of R2 000.

12. Trial Balance The Trial Balance is a list of all the General Ledger account balances. It has a debit column and a credit column. At the end of the month, all the debits must total all the credits. This shows that the General Ledger “balances”.

Activity 1.1

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Basic introductory activities Required Copy the table into your workbook. Use a tick () to indicate where each item on the list below should appear.

Assets Current

Owner's Equity

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Fixed

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Items 1. Delivery bicycle 2. Money in the bank 3. Telephone account 4. Donation received from the local government 5. Photocopier paper 6. Loan from FNB 7. Sales of T-shirts 8. Repairs to the vehicle 9. Interest paid on the short-term loan from FNB 10. Creditors 11. School fees of the owner’s son 12. Bank overdraft 13. Farming equipment 14. The office building 15. Cash in petty cash 16. Money received from a hairdresser for services rendered 17. Insurance premium paid to Santam 18. Advertisement in the newspaper 19. Tea and coffee for the office staff 20. Spare parts for the truck

Activity 1.2 Required Show the effect of each transaction on the accounting equation.

In each case provide the amount, effect and reason.

Example: Bought a new cash register and paid by cheque, R6 000.

Assets Effect Reason +R6 000 Equipment increases –R6 000 Bank decreases

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Owner’s Equity Effect Reason

Liabilities

Transactions 1. Paid the telephone account by debit card at Pick n Pay, R450.

2. Received R3 000 for services rendered.

3. Paid Eskom by cheque for electricity, R2 350.

4. Bought packing material from Makro, R400, and paid by cheque.

5. Bought pens and pencils for the office at Waltons, and paid cash, R220.

6. Paid the weekly wages directly into the bank accounts of the workers, R4 000.

7. Bought a new computer for the office and paid by cheque, R8 000.

8. Paid the owner’s TV licence by cheque, R280.

9. Cash register roll for services rendered for the day, R5 500.

10. Received R2 200 from the tenants renting the office.

Activity 1.3 Copy and complete the table by calculating the cost of sales (cost price) or the selling price (sales).

Selling price

Profit %

Calculation

Example 1

280

40%

280 ×

100

Example 2

1 350

50%

900 ×

150

750 240

50% 20% 25% 30% 40% 100% 200%

390 728

160

200

(to find selling price)

900

150 390

1

3

2

66 %

9.

200

33 %

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8.

100

Cost price

(to find cost price)

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1.

2.

3.

4.

5.

6.

7.

140

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No.

360

3

Activity 1.4

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Required Show the effect that each transaction has on Assets and/or Owner's Equity. In each case, give the amount, effect and reason. Also show the General Ledger accounts to be debited and credited.

Transactions 1. Bought stock to the value of R2 400 and issued a cheque.

2. Received goods for R1 450 and issued a cheque.

No.

Assets Effect Reason

Owner's Equity Effect Reason

1.

2.

No.

Account debited

General Ledger Account credited

1.

2.

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Activity 1.5 Required Copy the tables below. Show the effect that each transaction has on Assets and/or Owner's Equity. In each case, give the amount, effect and reason. Also show the General Ledger accounts to be debited and credited.

Transactions 1. Sold trading stock for R230 cash (cost price R100).

2. Issued a cash register slip for the sale of goods to the value of R368.

The business maintains a profit margin of 60% on cost price.

Assets Effect Reason

No.

Owner's Equity Effect Reason

1.

2.

Account debited

Activity 1.6

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1.

2.

General Ledger Account credited

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No.

Required Use the transactions of Nawawi Stores, owner N Nawawi, to draw up the CRJ and CPJ of the business for August 2019. Close off the journals properly at the end of the month.

Provide for the following columns: CRJ: Analysis of Receipts, Bank, Sales, Cost of Sales, Sundry accounts CPJ: Bank, Wages, Equipment, Trading stock, Sundry accounts

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Transactions for August 2019 01 The owner contributed R45 000 to the business as capital. He deposited this in the business’s bank account. Receipt no. 01 was issued to him.

03 Issued cheque no. 001 to the municipality to pay for the trading licence, R250.

04 Issued a cheque to Swazi Suppliers for the purchase of stock, R4 800.

07 Cash sales of stock, R750 (cost price R500) 09 Issued a cheque to PNA for the purchase of stationery, R360.

11 Received goods from Lee Suppliers and issued a cheque to them for R6 300.

13 The owner took a cash cheque for own use, R300.

Paid the weekly wages by cheque, R1 800.

16 Cash received for goods sold, R960 (cost price R640).

Issued a cheque to Office Suppliers for the purchase of a computer, R5 000.

19 Drew a cash cheque to pay the weekly wages, R1 800.

Issued a cheque to the municipality for R860. It was in payment of the business’s water and electricity account, R610, as well as the owner’s personal account.

23 Cash sales of stock according to the cash register roll, R825 (cost price R530).

Issued a cheque to ABC Stores for goods bought from them, R570.

30 Drew a cheque for the weekly wages, R1 800, and for petty cash, R300.

Cash received for the sale of goods, R975 (cost price R650).

Issued a receipt to the owner for R5 000. This was for an increase of his capital.

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Activity 1.7 Use the CRJ and CPJ already drawn up for Activity 1.7 and post them to the General Ledger of Nawawi Stores for August 2019. Provide for the following accounts: Capital (4 lines) Drawings (4 lines) Equipment (2 lines) Trading stock (5 lines) Bank (5 lines) Petty cash (2 lines) Sales (2 lines) Cost of sales (2 lines) Wages (2 lines) Trading licence (2 lines) Stationery (2 lines) Water and electricity (2 lines) Balance the accounts properly at the end of August.

Activity 1.8

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Required Use the information of Alva Traders to do the following: 1. Open the accounts in the General Ledger with given balances.

2. Complete the CRJ and CPJ for March 2019.

Provide the following columns in the cash journals: •• CRJ: Analysis of receipts, Bank, Sales, Cost of sales, Sundry accounts •• CPJ: Bank, Stationery, Wages, Trading stock, Sundry accounts 3. Post the completed CRJ and CPJ to the accounts in the General Ledger.

4. Properly balance the accounts at the end of March.

Information Trial Balance of Alva Traders on 28 February 2019

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Balance Sheet accounts Capital Drawings Equipment Trading stock Bank Petty cash Nominal accounts Sales Cost of sales Rent expense Trading licence Advertising Packing material Water and electricity Salaries Wages Stationery Rent income

Fol. B1 B2 B3 B4 B5 B6

N1 N2 N3 N4 N5 N6 N7 N8 N9 N10 N11

Debit

Credit 20 000

Lines 4 4 4 5 5 5

5 000

4 4 4 4 5 5 2 4 4 4 4

200 2 810 6 760 7 092 100

2 780 870 130 180 160 78 1 360 3 000 260 25 780

780 25 780

Transactions for March 2019 01 A Valentine, the owner of Alva Traders, increased his capital contribution by R25 000.

Receipt no. 12 was issued. The money was deposited directly in the current bank account of the business.

02 Issued the following cheques: to Brink & Co. for the rent of the building, R1 360 to the municipality for the trading licence, R150 to Laurentia Furnishers for equipment, R7 500 for petty cash, R80

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04 Bought stock from Mellville Suppliers and paid by cheque (no. 014), R6 400.

06 Bought stationery from Sampie & Co. for R480 and paid by cheque.

07 Drew R1 125 cash by cheque to pay the weekly wages.

09 Paid Paarl Post by cheque for advertisements, R120.

12 Cash sales of stock according to the cash register roll, R316 (cost price R230).

14 Paid the weekly wages by cheque, R1 125.

18 Bought packing material from Plastika Ltd for R224 and paid by cheque.

21 Cash sales of goods, R834 (cost price R620).

28 Cash sales of trading stock, R720 (cost price R550).

28 Issued a cheque to pay the weekly wages, R1 000, as well as for petty cash, R125.

29 Paid Waal & Son by cheque for the following: Packing material, R184, and advertising posters, R210.

Bought stock from Nelson & Co. for R1 770 and paid by cheque.

30 Cash sales of goods, R465 (cost price R340).

Sublet a part of the building to R Roos, R1 000.

31 Paid the salary of the secretary, A Johns, by cheque, R1 480.

The owner withdrew a cash cheque for personal use, R500.

Activity 1.9

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Use the General Ledger of Alva Traders (Activity 1.9) and prepare the Trial Balance on 31 March 2019.

Exam-type question Activity 1.10

Required Use the given (independent) transactions and complete the columns below.

Accounted debited

General Ledger Account credited

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No.

Assets Effect

Owner's Equity Effect

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Transactions 1. Bought stock from Lerm Wholesalers and paid by cheque, R3 120.

2. Sold stock, cost price R320, for cash, R480.

3. Drew a cash cheque for petty cash, R150.

4. Received R900 from the tenant who rents a building from the business.

5. The owner drew a cheque for R550 for own use.

6. The owner deposited additional capital, R3 000.

7. Bought stationery from Trio Printers by cheque, R116.

8. Drew a cash cheque to pay the wages, R410.

9. Sent a cheque to Telkom in payment of the telephone account, R155.

10. Received a service invoice for repairs from Presto and paid by cheque, R230.

11. Bought a computer for office use and paid by cheque, R4 800.

12. Issued a cheque for R2 300 for the purchase of trading stock of R1 800, and the rest for the purchase of packing material.

13. Issued a cheque to Waltons for R1 200. This was for the purchase of stationery for the business’s use, R400, purchase of school books for the owner’s children, R350, and stationery for resale, R450.

14. Issued a cheque to Ster Motors for R16 000 for the purchase of a second-hand vehicle for R15 000, as well as repairs to the windscreen.

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Test yourself 1.1 Time: 90 minutes

Marks: 130

Required 1. Open the ledger accounts with the balances given (number of lines shown in brackets).

2. Complete the CRJ and CPJ for May 2019: •• CRJ: Analysis of receipts, Bank, Sales, Cost of sales, Sundry accounts [16] •• CPJ: Bank, Trading stock, Stationery, Packing material, Equipment, Sundry accounts [31] 3. Post the CRJ and CPJ to the General Ledger and balance the accounts properly.

[58] 4. Draw up the Trial Balance on 31 May 2019.

[19] 5. Calculate the percentage profit mark-up that Manzo Stationers adds to the cost price of their stock to calculate the selling price.

[6]

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Information On 30 April 2019 the following balances appeared in the ledger of Manzo Stationers: Capital

R19 000 (4) Sales

Drawings

(4)

1 400

(4)

390

(4)

4 280 (6) Telephone

216

(4)

1 029 (6) Stationery

182

(4)

150 (4) Repairs

PL

3 710 (4) Packing material

M

Petty cash

10 000

12 000 (2) Wages

Equipment Bank

(4)

400 (4) Cost of sales

Land and buildings Trading stock

R15 000

243

(4)

Insurance

–

(2)

Advertising

–

(2)

Postage

–

(2)

Salaries

–

(2)

Rent income

–

(2)

SA

Transactions for May 2019 Duplicates of receipts issued May 05 no. 401 to H Hansen for rent received, R150 19 no. 402 to J Manzo for additional capital, R3 000 Cash sales of goods according to the cash register roll May 03 R705 cost price R470 05 R894 cost price R596 12 R972 cost price R648 19 R933 cost price R622 28 R1 056 cost price R704

Duplicates of bank deposit slips May 03 R705 05 R1 044 12 R972 19 R3 933 28 R1 056

Cheque counterfoils May 02 no. 301 to Typek Suppliers for R476 stationery for resale, R374 stationery for office use, R102 05 no. 302 to Highveld Brokers for insurance premium, R107 07 no. 303 to Longman CC for stock, R514 advertisements, R45 10 no. 304 to Klix Products for packing material, R83 11 no. 305 to Vaal Services for repairs, R61 12 no. 306 cash for extra cash float, R50

C h a p t e r 1 A c c o u n t i n g t e r m i n o l o g y a n d r e v i s i o n o f g r a d e 9 wo r k

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14 no. 307 to Typek Suppliers for R779: equipment, R377 and stock, R402 15 no. 308 cash for postage, R20 18 no. 309 to Longman CC for goods, R616 19 no. 310 to Klix Products for packing material, R117, and stationery for sales, R91 21 no. 311 to H Hartman, R400 for salary 24 no. 312 cash for the owner for private use, R100 28 no. 313 to Telkom for the telephone, R41 30 no. 314 cash for wages, R310

Test yourself 1.2 Time: 45 minutes

Marks: 70

E

Required 1. Open the accounts in the General Ledger of Protem Traders. Leave 5 lines each for Trading Stock and Bank, 2 lines each for Advertising, Insurance and Petty Cash, and 4 lines for each of the other accounts.

2. Post the given journals to the General Ledger and balance the accounts at the end [53] of the month.

3. Prepare the Trial Balance on 31 August 2015.

[17]

M

PL

Information F Frans started a business called Protem Traders on 1 July 2015. At the end of July the following balances appeared in the books of the business: Capital R15 000 Drawings R800 Equipment R4 360 Trading stock R1 830 Cash float R100 Bank R5 930 Rent expense R1 000 Sales R9 380 Wages R2 000 Cost of sales R7 785 R1 000 Stationery R425 Rent income Insurance R180 Telephone R210 Water and electricity R270 Consumables R340 Advertising R150

SA

The journals for August 2015 have already been completed. The following totals and information appeared in the CRJ and CPJ: R7 200 CRJ2: Analysis of receipts Bank R7 200 Sales R5 200 Cost of sales R3 900 Sundry accounts R2 000

The total of the Sundry column consists of rent income of R1 000 on 5 August and an increase in capital by the owner of R1 000 on 25 August.

CPJ2: Bank R3 472 Trading stock R2 216 Wages R320 Consumables R219 Sundry accounts R717

The total of the Sundry column consists of rent expense of R200 on 5 August, purchase of stationery worth R83 on 10 August, drawings of R120 by the owner on the 15th, purchases of new equipment worth R240 on the 21st, as well as payment of the telephone account of R32 on the 25th and water and electricity of R42 on 31 August.

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