 |
BAI620S - BUSINESS ACCOUNTING FOR INFORMATICS - 2ND OPP - JAN 2020 |
|
|
1 Page 1 |
▲back to top |
NAMIBIA UNIVERSITY
OF SCIENCE AND TECHNOLOGY
FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF ACCOUNTING, ECONOMICS & FINANCE
QUALIFICATION: BACHELOR OF INFORMATICS
QUALIFICATION CODE: 07BAIF
COURSE CODE: BAI620S
LEVEL: 5
COURSE NAME: BUSINESS ACCOUNTING FOR
INFORMATICS
SESSION: JANUARY 2020
DURATION: 3 HOURS
PAPER: PRACTICAL AND THEORY
MARKS: 100
EXAMINERS:
SECOND OPPORTUNITY QUESTION PAPER
D Nkala and T Shindobo
moperatTor: | 2 Kamotho
INSTRUCTIONS
e This examination paper is made up of four (4) questions.
e Answer All the questions and in blue or black ink only.
e Show all your workings.
e Start each question on a new page in your answer booklet and show all your workings.
e Questions relating to this paper may be raised in the initial 30 minutes after the start of
the paper. Thereafter, candidates must use their initiative to deal with any perceived
error or ambiguities and any assumption made by the candidate should be clearly
stated.
PERMISSIBLE MATERIALS
Non-programmable calculator
THIS QUESTION PAPER CONSISTS OF 5 PAGES (Including this front page)
|
|
2 Page 2 |
▲back to top |
QUESTION 1
(33 MARKS)
PartA
You are a Bachelor of Informatics students doing Financial Accounting 101 course, your cousin
Tangeni wants to start a business and has asked you to assist him in understanding various concepts.
Column A
Column B
A
A document that acknowledge the receipt of money | 1
Trial Balance
B
Debt payable within 12 months
2
Accruals Concept
C
Show the net profit or net loss
3
Business Entity concept
D
Summary of account balances
4
Capital
E
A book of original (15') entry for credit sales
5
Current liabilities
F
Assets of a business is recorded at cost price
6
Invoice
G
Accountants should rather understate the profit and | 7
Statement of comprehensive
overstate expenses
income
H
Type of organisation
8
Statement of financial
position
I
Net worth or owner’s equity
9
Sales Journal
J
Document prepared by the seller of goods on credit | 10
Receipt
K
Transactions and events should be recognized in the | 11
Historical Cost concept
financial period in which they occur
a
L
Assets of a business are recorded here
12
Private Limited Company
M
Affairs of a business is treated separately from the
13
Prudence
private affairs of the owner
Required:
Match the description in Column A with the most appropriate terminology in Column B above. Only
write down the number of the correct option. (Example A4)
(13)
Part B
Michelle opened a shop on 1 March 2019 and during the first month in business, the following
transactions occurred:
1 March
2March
3 March
6 March
15 March
22 March
29 March
31 March
Michelle electronically transferred NS150 000 into the business bank account.
She also transferred her personal computer equipment which has a second-hand value of
NS4 500 to the business.
She electronically deposited NS10 000 for February rent and N$12 000 for March rent
into rent agent’s bank account.
She purchased a furniture for NS$15 000 on credit from Sleepy-Suppliers.
She bought some goods for resale for NS50 000 from John supplier and she transferred
the amount into John’s account.
Michelle sold goods to Vana-Veni for NS65 000 on credit.
Vana-Veni settled Michelle’s account by paying N$62 500 with debit card.
Michelle settled her account with Sleepy-Suppliers by electronical fund transfer,
and was allowed a settlement discount of 10%.
|
|
3 Page 3 |
▲back to top |
Required:
Enter the above transactions in Michelle’s ledger accounts, balance off all the accounts and bring
forward the balances as at 1 April 2019.
(20)
QUESTION 2
(14 MARKS)
PartA
Norman Ltd.’s chief executive believes the company is holding excessive inventories and has asked
for the management accountant to carry out an investigation.
Information on the two inventory items is given below:
Inventory
item
Purchase
price per unit
(NS)
Administration
cost per order
Demand units
Holding cost per year
(% of purchase price)
N
220
90
S
30
25
14000 per year
15
3 000 per year
9
____The-company’s inventosr ysty em _ is bo aser d-ondthe e er coni omin c org der quantity (EOQ)
Required
a)
Determine the number of orders per year that the company will place for item N
(4)
b)
Determine the annual holding cost of inventory item S
(4)
Note: Round off your answers to the nearest decimal place
Part B
A national chain of tyre fitters stocks a popular tyre for which the following information is available.
The company operates on 50 weeks a year and normally operates from Monday to Friday only.
Ordering Costs per order
Holding Cost per unit
Cost per tyre
Reorder quantity
Lead time
Maximum usage
Minimum usage
Average usage
NS155.50
2.5 % of unit cost
NS1 700
5 000
8 to 13 days
148 tyres per day
85 tyres per day
160 tyres per day
You are required to calculate:
a)
Reorder level
(2)
b)
Maximum level of inventory
(2)
c)
Minimum level of inventory
(2)
|
|
4 Page 4 |
▲back to top |
QUESTION 3
(38 MARKS)
The following trial balance has been extracted from the ledger of Vincent Trading at the end of the
reporting period, 31 December 2018.
Land & buildings
Investments (10%)
Furniture @ 1 Jan 2018
Receivables
Bank
Capital
Sales
Purchases
Sales returns
Rent income
Cleaning materials
| Wages & salaries
Sundry expenses
Interest income
Insurance expense
Inventories 01/01/2018
Debit
NS
250,000.00
120,000.00
40,000.00
20,000.00
26,000.00
157,500.00
8,000.00
10, 000.00
96,000.00
18,000.00
4,500.00
50,000.00
800,000.00
Credit
NS
434,000.00
330,000.00
27,000.00
9,000.00
800, 000.00
Additional information:
1. Interest income is interest received from the investment which was made on
1 January 2017.
2. Depreciation on furniture is accounted for at a rate of 10% on the diminishing
(reducing) balance method.
3. Cleaning materials worth NS3 000 were on hand on 31 December 2018.
4. Rent income, includes an amount prepaid for the first three months of 2019.
5. Wages and salaries include an amount of NS2 000 which was lent to an employee. The
amount will be repaid during January 2019.
6. An invoice for current insurance amounting to NS500 was received on 2 January 2019 and
has not been taken into account in the above balances.
7. Inventory on hand on 31 December 2018 amounted to N$47 500.
Required:
a) Prepare journal entries to take into account adjustments 1 to 6. Ignore narrations.
(7)
b) Prepare the statement of profit or loss and other comprehensive income of Vincent Trading
for the year ended 31 December 2018.
(14)
c) Prepare a statement of financial position of Vincent Trading as at 31 December 2018. (17)
|
|
5 Page 5 |
▲back to top |
QUESTION 4
(15 MARKS)
You are an investment banker. The following financial information has been presented to you as
a prospective investment opportunity:
Extracts from the Trial Balance of Financial Meltdown Ltd at 28 February 2018:
Revenue
Gross profit
Profit for the year
Credit purchases
Total assets
Total liabilities
Current assets
Inventories
Current liabilities
Average trade accounts
payable
NS 000
50 000
10 000
4 000
20 000
5 000
5 500
1625
500
1 800
2 700
The bank uses the following basis to make investment decisions for the sector this company
operates in:
a) Net profit percentage of at least 5%
b) Solvency ratio of at least 1:1
c) Acid test ratio of at least 1:1
d) Supplier payment period of less than 60 days
You are required to:
Calculate the following ratios and comment on whether or not you would support an
investment in Financial Meltdown Ltd based on each of the ratios individually.
Net profit percentage
(3)
Solvency ratio
(4)
Acid test ratio
(4)
Supplier payment period
(4)
END OF QUESTION PAPER