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FAC511S- FINANCIAL ACCOUNTING 101- 1ST OP- JUNE 2023 |
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n Am I BI A u n IVE Rs ITY
OF SCIEn CE Ano TECHn OLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION : BACHELOROF ACCOUNTING AND BACHELOROF LOGISTICSAND
SUPPLYCHAIN MANAGEMENT
QUALIFICATION CODE: 07BOAC AND
07BLSC
LEVEL: 5
COURSE: FINANCIAL ACCOUNTING 101 COURSE CODE: FAC511S
SESSION: JUNE/JULY 2023
PAPER: THEORY & CALCULATIONS
DURATION: 3 Hours
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS:
Ms Y Andrew, Ms H Kangala, Mr L Odada, Mr Chikambi and Mr C
Simasiku
MODERATOR:
Mr C Mahindi
INSTRUCTIONS TO CANDIDATES
1. Answer all questions in blue or black ink.
2. Round off all amounts to the nearest Namibian Dollar, where applicable.
3. A silent, non-programmable calculator is permissible.
4. Show all your workings (where applicable).
This paper consists of 4 pages, excluding the cover page.
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QUESTION 1
20 Marks
1.1 List one (1) primary user of financial statements as per Conceptual Framework for Financial
Reporting and also explain for what purpose they could use the financial statements.(2)
1.2 List six (6) Qualitative Characteristics of Financial Statements.
(6)
1.3 Explain what the underlying assumption of going concern means.
(1)
1.4 Explain the difference between input VAT and output VAT.
(2)
1.5 What does the abbreviation "VAT" stand for?
(1)
1.6 Explain briefly what you understand by the following accounting terms:
a) An accrual
(2)
b) A prepayment
(2)
c) Revenue
(2)
d) Balance of accounts
(2)
QUESTION 2
Russel Kotze
List of balances as at 31 March 2023
Land
7% long term investment
Equipment
Accumulated depreciation: equipment
Inventory as at 1/1/2021
Receivables
Payables
VAT refund receivable
Bank and cash
Allowance for credit losses
Rent expense
Sales
Purchases
Sales returns
45 Marks
N$
100,000
25,600
101,110
31,415
24,810
71,050
55,885
5,160
7,820
5,625
15,000
406,170
196,450
4,150
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Purchases returns
Distribution and advertising
Insurance
Wages and salaries
4% long term bank loan
Interest on long term loan
Credit losses
Drawings
Capital
3,750
7,320
11,250
90,470
91,250
1,760
1,120
5,290
74,265
The following information, which has not been accounted for above, is also available:
1. Each of the above account balances is a normal balance.
2. The inventory count as at 31 March 2023 showed closing inventory valued at N$21195.
3. The annual rental expense for the business premises amounts to N$20 000 per annum.
4. Insurance has been paid until 30 June 2023.
5. A receivable owing N$2 000 has recently been downgraded by rating agencies and is
experiencing severe cash-flow problems; as a result, Russel Kotze has decided to write off
this receivable account as irrecoverable. The allowance for credit losses should be
maintained at 6% of outstanding receivables.
6. The interest on the long-term investment has not yet been received.
7. Depreciation is to be provided for as follows: (Depreciation should be calculated to the
nearest whole number).
• Land:
Not depreciated.
• Equipment: 15% reducing balance method.
REQUIRED
a) Prepare the general journal entries to account for the above adjustments. No narrations
are required.
(16)
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b) Prepare the Statement of Profit or Loss of Russel Kotze for the year ended 31 March 2023.
(16)
c) Prepare the Statement of Financial Position of Russel Kotze as at 31 March 2023.
Show all workings and round off to the nearest N$.
(13)
QUESTION 3
20 Marks
Zeempie Samsodien is a sole proprietor who owns a corner shop that sells groceries and other
small household items and accounts for inventory by using the periodic system. Zeempie
Samsodien is a registered VATvendor and his VATliability as at 01 March 2023 was N$13 700 and
the standard rate of VAT is 15%. The balance on the bank account on 01 March 2023 was a debit
balance of N$ 12 500. Zeempie Samsodien deals with standard goods falling under the standard
VAT rate.
The following information is available for Zeempie Samsodien for the month of March 2023:
i) Sales on credit for the month of March 2023 amounted to N$164 250 net of VAT;
ii) Sales returns (all credit) for the month of March 2023 amounted to N$14 200 net of VAT;
iii) Purchases on credit for the month of March 2023 amounted to N$105 980 net of VAT;
iv) Purchases returns (all credit) for the month of March 2023 amounted to N$11200 net of VAT;
v) Zeempie Samsodien pays N$10 000 in VATto NAM RA (the Receiver of Revenue) monthly by
direct debit order on the 15th of every month.
REQUIRED
a) Prepare the relevant journal entries to account for VATfor March 2023.
(15)
b) Calculate the net VAT payable or receivable as at 31 March 2023.
(5)
QUESTION S
15 Marks
The following details relate to assets that were in the asset register of Wallmark Trading at the
beginning of the financial year, 1 April 2022.
Asset
Delivery
vehicles
Cost
N$
Accumulated
depreciation
N$
650,000 350,000
Depreciation policy
20% per annum reducing balance
method
Machinery 900,000 400,000
Equipment 150,000 48,000
15% per annum on cost
Straight line over 10 years on the
depreciable amount
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.r
The following occurred during the year ending 31 March 2023:
• A delivery vehicle which cost N$160 000 with an accumulated depreciation of N$120 000
on 31 March 2022 was destroyed in an accident on 30 September 2022. The vehicle was
insured and a cheque to the amount of N$34 500 was received from the insurance
company.
• On 30 November 2022, one of the old machines with a cost of N$300 000 and included in
the figure of N$900 000, was traded in on a new machine with a cost of N$575 000 (VAT
inclusive). On 31 March 2022 the accumulated depreciation on the old machine was
N$140 000 and an amount of N$138 000 was received for it as a traded in value. The
outstanding amount for the new machine was paid by cheque.
• Equipment will be disposed at the end of it useful life for an amount of N$30 000. As at
31 March 2023, the equipment had a remaining useful life of five years.
Assume a VAT rate of 15%.
REQUIRED
a) Calculate the profit or loss on the machine trade-in.
(4)
b) Disclose the item of property, plant and equipment in the notes to the financial position
as at 31 March 2023.
(11)
END OF EXAMINATION PAPER
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