QUESTION 4 FINAL PAPER SCHOOL FOR LEGAL PRACTICE MODULE 4 ATTORNEYS BOOKEEPING 19 MAY 2012 [30] ‘Your Bookkeeper presents you with the following extract of your private, client's trust and business ledger account balances as at 28 February 2011: TRUST Zerox Machines Black 154 000 White 290 000 Green 36 000 Blue Red 150 000 Lazarus 90 000 Zulu (15.000) You are required to: cR cR CR cR cR DR BUSINESS (80 000) 5.000 80 000 19 500 5000 120 000 57 000 cR OR OR OR DR DR BR 1.1 Caleulate the total amount you may transfer from Trust to Business accounts & vice versa 1.2 Indicate the balances after the transfer 1.3 Record the Transfer Journal entries 1.4 | Record the Cash Book entries (8) (8) (10) 4FINAL ANSWERS SCHOOL FOR LEGAL PRACTICE MODULE 4 ATTORNEYS BOOKKEEPING 49 MAY 2012 GUIDELINE TO MARKERS :PLEASE USE YOUR DISCRETION ON GOLLECTION COMMISSION DEPENDING ON YOUR PROVINCE ANSWER 4 44 [30] Transfers (from Trust to Business) Nil 85 000 80 000 19 500 90.000 R274 500 From Business to Trust R15 000 (8) Zerox Black White Green Blue Red Lazarus Zulu Trust 69.000 240.000 16 500 150.000 (80 000) 000 30.000 72000 (8)FINAL ANSWERS 1.3 Transfer Journal Black Dr (T) 85 000 Black Cr (B) 85 000 White Dr (T) 80 000 White Cr (B) 80.000, Green Dr(T) 19500 Green Gr(B) 19500 Lazarus Dr (T) 90 000 Lazas Cr (B) 90 000 Trust Cash Book cr 274 500 Business Cash Book =r 274 500 Zulu Dr (B) 15 000 Zulu crit) 15.000 ‘Trust Cash Book Dr 15 000 Business Cash Book = Cr 15.000 (10) 1.4 Cash Book RUST CASH BOOK Tr - 15 000 TF 274 600° BUSINESS CASH BOOK TF "274 500 [* ~ 15 000 (4)FINAL PAPER SCHOOL FOR LEGAL PRACTICE MODULE 4 LEGAL PRA’ RS ACCOUNTS MANAGEMENT g Jul 2 QUESTION 4 [21] Yeu commence practice for your own account on 1 April 2022 and conclude the undermentioned transactions on the dates mentioned. 01-Apr-22 | 02-Apr-22 03-Apr-22 Os. Apr 22 04-Apr-22) 05-Apr-22 O7-Aph22 11- Apri2z 15-Ape22 1B-Agi-22 30-Apf-22 You as the proprietor, deposit R100 000 into your business account to commence practice, |“ Ze ‘You pay rent deposit of R19 000 tb ABC Properties. ‘Your client Black deposits R200 000%by EFT into your trust account. You pay office rent of R14 500 (inclusive of VAT) to ABC Properties your landlord who is VAT registered. You purchase office furniture for R20 000 per HP agreement with XYZ Furniture. see A You receive R500 000 EFT deposit from Mr Investor to be held in trust pending the happening of a future event. Mr Investor instructs you to purchase quoted shares far R100 000. which you pay to the stock broker. Je You receive a cash deposit of R35 000 from your client Sipho to register a company on his behalf, You draft the Trust Deed and charge a fee of R2 000.” Bank charges are debited to your business account in the amount of R200.: You pay secretary her salary of R6 000.” You pay XYZ Fumiture the fist instalment of R2 460 for the purchase of the office furniture. i You pay the Legal Practice Council membership fees of R1 000. Mr Investor instructs you to sell the shares, You receive R105 000. You are required to record the above transactions In your accounting rS¢ords. You are a registered VAT vendor for VAT purposes and should therefore provide for VAT where applicable. Transfer whatever you are ontitie account. Calculate your Trust «: yto your business banking ook balance. TAW SOCIETY OF SOUTH AFRICA LEGAL EDUCATION AND DEVELOPMENT jLE-A DP = 9FINAL PAPER UST ION A You receive the following accounting statement and EFT from your correspondent (‘ABC) “ATTORNEYS” whom you instructed to attend to a collection matter on behalf of your élient oy Isaack vs Abel Fee summons 1.000 VAT @ 15% 150 Paid sheriff 1.000 Cash Abel 5 000 Collection commission 500 VAT @ 15% a Your 1/3 allowance 500 VAT on allowance 75 EFT herewith 2850 5575 You are required to record the above transactions in all your accounting records and account fully to. your client. Transfer whatever you are entitled to, to your business account. It is nat necessary to prepare an accounting statement. QUESTION 3 tS The commencement of your yearly audit is next month, You contact your bookkeeper and receive the following ledger accaunt balances. Trust Balance (CR) __Business Balance (DR) Client King 10 000 120 000 Client David 3000 (2 300) Client Maria (2500) 6.000 _ « Caloulate the amounts you may transfer in respect of each client in accordance with the above client extract and indicate the trust and business balances after each transfer. ‘LAW SOCIETY OF SOUTH AFRICA LEGAL EDUCATION AND DEVELOPMENT {LE A.DI™ 2FINAL PAPER QUESTION 4 (10) 4.1. Define a “Trust Reconciliation’, (8) 4.2 List five types of general ledger accounts. 6) TOTAL: [75] TAI’ SOCTETY OF SOUTH AFRICA LEGAL EDUCATION AND DEVELOPMENT jE.B.A.DI™ 3‘AL ANSWERS SCHOOL FOR LEGAL PRACTICE ‘MODULE 4 LEGAL PRACTITIONERS ACCOUNTS MANAGEMENT ‘SJULY 2022 GUIDELINE TO MARKERS QUESTION 1 (20) TRUST CASH BOOK Black(T) - Deposit “200 000 [4] | Purchase of shares - Stockbroker (Investor (T}} 100-000 ["2] Investor (T) — Deposit 500 000 [%4] _] Transfer to Business Ace 2300 [5] Sipho(T} - Deposit 35.000 (14) Balance cit 737 700 [%4] (Mr investor) (T}- 105 000 [4p Stockbroker aaa BLAGI 7 TCB — Deposit 200 000 [74] _ANWESTOR(T) Purchase of share — 400 000 [%] | TCE — Deposit 500 O00 [4] Stockbroker Sale of share - 105.000 [%4] | stockbroker LAW SOCTEFY OF SOUTH AFRICA LEGAL EDUCATION AND DEFELOPMENT fLE- A.D"FINAL ANSWERS SIPHO(T) - Transfer to Sipno (B) 2300[%] | TCB- Deposit BUSINESS CASH BOOK we 36 000 ["a] af Capital contribution 700 000(%4} |Rentdeposit—ABC 10 O00] Transfer from Trust 2300(%) | Prop we Account Rental expense — 11 $00 [15] ABC Prop . Bank charges 200 be Secretary salary 6.000 [15] YZ furniture ~ | Instalment 2.000 [4] LEC Membership fees 4000 [4,-" ‘Leos : SIPHO (B) Fees and VAT 2300 [Ay | Transfer — from Sipho (T) FEE ACCOUNT 2300 [A fi ff | Sipho (8) VAT OUTPUT Te00 7 300 [4] P= : Sipho ®) TAW SOCIETY OF SOUTH AFRICA LEGAL EDUCATION AND DEVELOPMENT [1.6.4.0]FINAL ANSWERS |GAPITAL ACCOUNT 2 - BCB — Capital F005 G00 174] contribution | RENT DEPOSIT “BCB— Deposit 10.000 Pl QFFICE RENT EXPENSE BCB (ABC PROP) ~ 140000 [4] VAT INPUT “BCB(ABC PROP) —=~=~*«*CSODCAI™ EGAL PRACTICE COUNCIL = MEMBERSHIP FEES BCB ' ) 100014] GFFICE FURNITURE t “XYZ Fumiture 120 000 [4] FURNITURE. “BCE - instalment 2000 [14] | Office furniture 20 000 [4] Taw SOCHETY OF SOUTH AFRICA LEGAL EDUCATION AND DEFELOPMENT [E40FINAL ANSWERS SALARIES BCB - Secretary! 6 000 1] BANK CHARGES BCE 200 [AT JOURNALS. Business Journal DR R Office furniture 20 000 (4) XYZ furniture 20 000 [4] Being furniture bought on credit Fees Journal o | eR Siphe (B) 2 300[%4] Pa Fees /2000[%) Vat output 300%) ~ Fees + VAT Collected Tranfer Journal oR SR Sipho (T) 2 300(%4] Sipho() 2 3000%4] Transfer of value (fees + VAT) Taw SOCIETY OF SOUTH AFRICA LEGAL EDL CATION Sb DEVELOPMENT LE ADEQUESTION 2 BUSINESS aT Fi et SIN jt Transfer from tru: 575 Fl) Ageount i} | BUSINESS LEDGER 113 Allowance Fees & VAT | | TRUST BOOKS ABC ATIORNEES: m =Payment | | LAW SOCKET! OF SOUTH APRIC ABC ATTORNEYS (8) Transfer from 5 [1] | ABC (7) FEE AGCOUNT ABC ATTORNEYS (8) OUTPUT VAT ABC ATTORNEYS (B) | ZIRUST CASHBOOK 7 2.850[1} | Transfer to Business Acc EFT — Isaack (T) 2540 | LRG at EDU CATION }NP DEVELOPMENT [LEAD 500 [i] 5751] ee a 575 me a 227511 2540FINAL ANSWERS TRUST LEDGER _ ABCATTORNEYS (7) a saack (T) 5 000 [] |. FCB - Payment Taso Transfer ta ABC (8) 575 [1 Isaack (T) 2725[1] ze ISAACK (CLIENT) {1 IC Attorneys (T] 725 (1] | ABC Attorneys (T) 5000 [1] EFT- TCB Payment 2275 Trust Journal [%41) orl ~~ cr ABC Attomeys (T)) 5.000 [1] Isaack (T) 5.000 [1 Transter af collected amount Trust Journal [4] ne cr ye Isaaek (7) 27251) ABC Attorneys (T) 2728 [1] Transfer of costs (fees + VAT + Disbursement) Fee Journal {'1) ot cr ABC Attorneys (8) 575 [1] a“ Fee 500 (1) Pe Vat ouput 75 [1] 4/3 Allowance on fee + VAT collected Transfer Journal [4] Dr Cr ABC Attorneys (1) 878 [1}1- } ABC Attorneys (B) 575 [11 Transfer of value (Fees + VAT) 4. mark for each entry, including journals =24 marks ¥% mark for identifying journals =2 marks LAW SOCIETY OF SOUTH AFRICA LEGAL EDUCATION AND DEVELOPMENT [LEA.DI™ 6