MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
FINANCIAL ACCOUNTING FOR BUSINESS:1A
(ACC 105)
SUPPLEMENTARY EXAMINATIONS

JANUARY 2014

DURATION: 3 HOURS

INSTRUCTIONS

1. Answer all questions

2. Begin an answer to a new question on a new
page.
3 In order to earn marks, ALL workings must
be shown

1
 Question 1 (20 marks)
The following transactions during May 2012 relate to Sen a Electicians:
Date Transactions Amount
2012 ($)

1-May R Senga, the owner, deposited as opening capital 15,000.00

Obtained a loan from ZB Bank on the same date 7,000.00

3 Purchased equipment on credit from Runde Dealers 2,000.00

9 Issued a cheque for an advertisement in The Sun 200.00

12 Paid for Internet expenses by cheque 100.00

13 Received a cheque from G Gwenhoro for services rendered 600.00

17 Paid for wife's airtime by cheque 1,500.00

R Senga transferred his personal motor vehicle to the
24 business 12,000.00

27 Paid wages and salaries by cheque 2,500.00

30 Issued a cheque to ZB Bank as a repayment on the loan 2,000.00

Required:
a) Record the above transactions as a summary on the Basic Accounting
Equation (BAE) (15 marks)
b) List two examples each of assets and of current liabilities. (4 marks)
c) Define equity. (1 mark)

41) Question 2 (40 marks)

The following balances appeared in the books of Baxdup Traders at 31 July 2011, the end of
the financial year, before any adjustments were made. Baxdup Traders operate in Gwanda
area.

Dr Cr
Capital: G Bhaka 120,000.00
Drawings: G Bhaka 24,000.00
Equipment 80,000.00
Accumulated depreciation: equipment (1 August
2010) 8,000.00
Inventory--1 August 2010 13,300.00

2
 Debtors Control 54,200.00
Creditors Control 47,600.00
Bank 35,120.00
Sales 568,350.00
Sales returns 8,350.00
Purchases 321,290.00
Purchases returns 3,290.00
Settlement discount received 6,400.00
Freight in 8,650.00
Rental expense 19,500.00
Salafies 148,000.00
Communication expenses 13,450.00
Municipal expenses 12,640.00
Stationery 4,690.00
General expenses 10,450.00
753,640.00 753,640.00

Additional information:
a) Inventories at 31 July 2011:
Trading /Merchandise $ 18 700
Stationery $810
b) Provide for $8 000.00 depreciation on equipment.
c) The telephone bill of $1 280.00 was received on 15 August 2011.
d) Rental amounted to $1 500 per month.

Required:
Prepare the following financial statements of Baxdup Traders:
i) the statement of comprehensive income for the year ended 31 July 2011. (20 marks)
ii) the statement of changes in equity for the year ended 31 July 2011. (5 marks).
• iii) the statement of financial position at 31 July 2011. (15 marks)

Question 3 (25 marks)

The information below relates to Mkoba Traders who are into retailing of various items
which they import into the country. After going through the information, you are required to:

a) Complete the Cash Receipts Journal and the Cash Payments Journals of
Mkoba Traders for December 2012. (11 marks)
b) Show the bank account in the general ledger of Mkoba Traders properly
balanced at 31 December 2012. (7 marks)
c) Prepare the bank reconciliation statement of Mkoba Traders at
31 December 2012. Start with the balance as per bank statement.(? marks)

3
a) Pencil totals of the bank column of the cash journals $
at 31 December 2012: Cash receipts journal (CRJ) 25,718.00

Cash payments journal (CPJ) 27,115.00

b) Item that appeared on the bank reconciliation statement

at 30 November 2012 but not on the bank statement:

Cheque # 632 issued to B Boterekwa on 15 June 2012 231.00

c) lteedms that appeared on the C R J and C PJ

, but not on the bank statement:
> A deposit entered in the CRJ on 31 December 2012

banked on 3 january 2013 792.00

> Cheque # 985 issued on 29 December 2012 to Gweru City

Council to pay the water bill 2,211.00

d) Items that appeared on the bank statement but not in the

cash journals:

> Bank charges 62.00

> Interest on nbank overdraft 70.00

> A stop order for an annual donation to Blue Hills Pri. School 220.00

> A "R/D" cheque originally received from debtor, K Mtapa 308.00

> A deposit directly paid into the bank account of Mkoba

Traders ,by a tenant Kotamai Botiq 1,100.00

e) Balance of the bank account in the general ledger at

30 November 2012 (Dr.) 297.00

Balance as per bank statement at 31 December 2012

f) (favourable) 990.00