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ITA412S- INTRODUCTION TO ACCOUNTING- 2ND OPP- NOV 2023 |
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nAm I 8 I A Un IVE RSITV
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BRIDGING PROGRAMME
QUALIFICATION CODE: 04NBR
COURSE CODE: ITA412S
LEVEL: 4
COURSE NAME: INTRODUCTION TO
ACCOUNTING
SESSION: JANUARY 2024
DURATION: 3 HOURS
PAPER: THEORY AND APPLICATION
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS:
Kuhepa Tjondu
MODERATOR: Daniel Kamotho
INSTRUCTIONS
• This question paper is made up of TWO (2) questions.
• Answer ALL the questions and in blue or black ink.
• Start each question on a new page in your answer booklet & show all your workings
• Questions relating to this test 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 & any assumption made by the candidate should be clearly stated.
• The names of people and businesses used throughout this test paper do not reflect the
reality and are purely coincidental.
PERMISSIBLE MATERIALS
Non-programmable calculator/financial calculator
THIS QUESTION PAPER CONSISTS OF 4 PAGES {Including this front page)
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Question 1
(40 marks)
You are provided with the following information for transactions that took place in the
business of Gowaseb Air Conditioners, a business that install, buy, and sell air conditioners.
Transactions are for December 2022:
1. Mr Hoveka, the owner, banked N$50 000 into the bank account of the business,
being additional contribution.
2. Mr Hoveka bought a vehicle that he intends using in his business, total amount for
the vehicle cost is N$28 000, he paid N$5 000 by cheque and the remaining amount
was still due to Auto House where he bought the vehicle.
3. Installed 2 air conditioner and received N$2 000 by cheque for each service done.
4. The employees of Gowaseb Air Conditioners were paid their monthly salaries of N$8
000 using an electronic funds transfer (EFT) directly from the business bank account.
5. Repaired a client's air conditioner and received a cheque of N$3 500.
6. Installed 5 air conditioners for a total amount of N$12 000 to Mr liyambo's house on
account.
7. Received a telephone bill from Telecom and settled it on the same day with a cheque
of N$650.
8. Mr Hoveka made a payment of N$7 000 by cheque on the outstanding account
balance of Auto house.
9. Bought four new air conditioners to be installed at a client premises next week and
paid a cheque of N$8 000.
10. One air conditioner which was bought was returned back to the supplier because it
was not working properly, this was valued at N$2 000.
Required:
a) Show the effect of the above transactions on the accounting equation. Present your
answer in the format shown below. Clearly indicate increases with a(+) and decreases with
a(-). Marks will also be awarded for identifying the name of the relevant account.
(24 mark)
Example:
Assets
Bank
1.
+ 50 000
=
Equity
Capital
=
+50 000
+
Liabilities
+
0
b) Name and explain 3 types of business entities.
c) Name and define the 5 elements of financial statements.
(6 marks)
(10 marks)
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Question 2
(60 marks)
Kudu (Pty) Ltd is a clothing retail store located in Windhoek.
You have been asked by the Financial Director of Kudu (Pty) Ltd to prepare the Statement of Profit
or Loss and the Statement of Financial Position for the 2022 financial year.
Kudu (Pty) Ltd Trial Balance as at 31 December 2022
Motor Vehicles at Cost
Accumulated depreciation: Motor Vehicles
Store equipment at Cost
Accumulated depreciation: Store equipment
Closing inventory - 31.12.2022
Trade and other receivables
Allowance for credit losses
Bank
Capital
Long term borrowings
Trade payables
Short term borrowings (Current portion of long-term borrowings)
Sales
Sales returns
Purchases
Opening inventory - 01.01.2022
Salaries and Wages
Office Rental
Credit losses
Interest expenses
Interest income
DR
N$
150,000
100,824
46,655
68,387
2,833
21,500
148,016
52,666
64,650
35,000
1,400
8,233
700,164
CR
N$
15,000
20,165
2,888
130,480
49,308
60,000
33,024
388,077
1,222
700,164
Additional information (Assume that information below has not been accounted for unless
otherwise stated):
1. Kudu purchased two assets on 1 January 2017:
• Motor Vehicle at a cost of N$150 000
• Store equipment at a cost of N$100,824.
The company depreciates its motor vehicle at 10% p.a using the straight-line method and store
equipment at 20% p.a using the reducing balance method. The purchase of the two assets
have been accounted for, however the accountant has not passed the depreciation journals for
the current year.
2. On 1 January 2022, the bookkeeper paid an amount of N$35,000 as rental expense. Monthly
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rental is N$2,500.
The accountant entered the transaction as follows:
DR - Office Rental N$35,000
CR - Bank
N$35,000
3. The company recruited Hip Hip Advertising CC to assist with year-end promotions, Hip Hip's
services cost the company N$8,500. This amount is yet to be settled at year end.
4. A customer NUST (Pty) Ltd purchased white T-Shirts from the company on 31 December 2022
in the amount of N$5,600. NUST (Pty) Ltd made an Electronic Funds Transfer (EFT) payment
of N$5,600 on the same day, Kudu (Pty) Ltd will only deliver the T-Shirts on 1 January 2023.
5. The entity did not pay 2 employees their December 2022 salaries, the employees each earn
N$6,500 per month.
Required:
{a) Prepare the adjusted trial balance of Kudu (Pty) Ltd as at 31 December 2022.
(38 marks)
{b) Prepare the Statement of Profit or Loss for the reporting period ended 31 December 2022.
(14 marks)
(c) Prepare only the Equity and Liabilities section of the Statement of Financial Position as at
31 December 2022.
(Smarks)
--------------------End
of Examination -------------------------
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