QUESTION 1 (28 marks)(35 minutes)

The following information pertains to F Fox, an attorney trading as Fox Attorneys: Transactions during August 2022:
Aug 1 F Fox deposited R30 000 as initial capital into the bank account of Fox Attorneys, and purchased furniture and equipment to the value of R6 000 for the office, paid from his personal bank account.
2 Paid a rental deposit from the bank account of the business for the consulting office rented, R3 500.
3 Purchased a coffee machine for the office on credit from Cuppa’s, R5 000.
10 Rendered consulting services to client M Chauke, who immediately thereafter settled his account of R7 000 in full.
11 Purchased revenue stamps for R80 on behalf of M Chauke, in cash from Fox’s personal funds.
13 Purchased a new computer for the office from Compuware for R10 000, cash.
17 Rendered a once-off consulting service to C Cheater for R950, cash. Paid R100 to a casual labourer for cleaning the office.
26 Fox paid his personal telephone account, R427 by making an electronic transfer from the bank account of the business.
29 Purchased refreshments, cash, for the next day’s consultations, R400.
30 Received R80 from M Chauke for the revenue stamps and R2 000 from client B Bully for a court appearance made by Fox in Bully’s defence during the day.
31 Paid R1 000 on the account of Cuppa’s by making an electronic transfer from the bank account of the business.

REQUIRED:

Analyse the abovementioned transactions in tabular form as follows:

QUESTION 2 (40 marks)(50 minutes)

During February 2023, S Holmes started a private investigating agency, trading as Holmes Tracing, and entered into the following transactions:

Feb 1 Opened a bank account in the name of Holmes Tracing and transferred R15 000 from his
personal bank account to this account.
3 Entered into a contract to rent offices and paid a deposit of R2 000 as well as the first month’s rent of R1 500 per cheque.
6 Purchased equipment on credit from Charlotte Hulan, the girlfriend of Holmes, for R16 000 at the rented premises, and entered the assets into the entity’s asset register.
7 Rendered services and received R7 500, cash.
13 Purchased binoculars for cash from Maxiquip, R5 000.
15 Rendered services on credit to a new client, A Agatha, R600.
17 Rendered services for cash to the following clients: A Avathar  R1 850
C Christie  R2 550
23 Received an account from the municipality for the month’s water and electricity, and paid R535.
24 Received the telephone account, R465, payable by 2 March 2023.
25 Paid half the amount owing to Charlotte for the equipment purchased on 6 February.
27 Withdrew R1 000 for the petty cash of the business.
28 A Agatha settled her account in full.
Rendered services to Charlotte Hulan to settle the balance on her account.

REQUIRED:

2.1 Record the above transactions in the relevant general ledger accounts in the books of Holmes Tracing for February 2023. Each entry in a ledger account must clearly indicate the correct contra ledger account. (The transactions must be recorded and the accounts balanced according to study unit 6 of the study guide.) Individual debtors and creditors accounts are not required. (33)
2.2 Prepare the trial balance of Holmes Tracing as at 28 February 2023. (7)  [40]

QUESTION 3 (24 marks)(30 minutes)

The following balances at 30 September 2021 were obtained from the general ledger of Storm Cleaning Services:

REQUIRED:

Prepare the following financial statements of Storm Cleaning Services to comply with International Financial Reporting Standards, appropriate to the business of the entity:

3.1 Statement of profit or loss and other comprehensive income for the year ended 30 September 2021. (10)
3.2 Statement of changes in equity for the year ended 30 September 2021. (5)
3.3 Statement of financial position as at 30 September 2021. (9)

Assignment 2

QUESTION 1 (75 marks)(90 minutes)

The following information pertains to Bardot’s Boutique, of whom the owner commenced business on 1 July 2022. Bardot’s Boutique is registered as a VAT vendor and receives and supplies tax invoices with all transactions. The VAT period of the business ends on equal months. The periodic inventory system is applied to record all inventory related transactions.

1. Trial balance as at 31 January 2023

1. Business transactions, 14% VAT inclusive, for February 2023:

REQUIRED:

The following subsidiary journals of Bardot’s Boutique for February 2023:

1.1 Cash receipts journal (analysis columns for analysis of receipts, bank, sales, debtors control, settlement discount granted, VAT Input and VAT Output) (15)
1.2 Cash payments journal (analysis columns for bank, purchases, creditors control, settlement discount received, wages, VAT Input, VAT Output and sundry accounts) (28)
1.3 Sales journal (analysis columns for debtors control, VAT Output and sales) (7½)
1.4 Purchases journal (analysis columns for creditors control, VAT Input and purchases) (5½)
1.5 Sales returns journal (analysis columns for debtors control, VAT Output and sales returns) (4½)
1.6 Purchases returns journal (analysis columns for creditors control, VAT Input and purchases returns) (4½)
1.7 General journal (10) [75]

You can do the following for additional practice, but please do not submit it for marking:

• Post the entries recorded in the above journals to the relevant accounts in the general ledger of Bardot’s Boutique. All the accounts must be properly balanced/totalled at 28 February 2023.
NB: (i) Remember to enter the balances at 31 January 2023 in the applicable ledger accounts.
(ii) Disclose the correct contra ledger account with each entry.

• The trial balance of Bardot’s Boutique as at 28 February 2023.

The general ledger and trial balance will be included in the solution.

QUESTION 2 (50 marks)(60 minutes)

The following trial balance was prepared from the books of Thai Traders on 30 April 2021:

1. Pre-adjustment trial balance of Thai Traders as at 30 April 2021

1. Additional information:

• Inventory on hand on 30 April 2021:

• The account of a debtor, L Finn, who owes R300, must be written off as

• The water and electricity account of R760 for April 2021 was paid on 10 May

• Depreciation must be provided for as follows:

• A store room was sublet from 1 January 2021 at R2 560 per month. On this date the tenant paid rent for five months.

• During the financial year the insurance expenses (amounting to R660) were paid as follows: four payments of R90 each for the months from December 2020 to March 2021; and two payments of R150 each for the months April and May

REQUIRED:

Prepare the following for Thai Traders according to International Financial Reporting Standards, appropriate to the business of this sole proprietorship, after the additional information was accounted for:

Answers on Above Questions

Answer 1: The analysis of all the transactions in tabular format is performed as follows:

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