STUDY UNIT 2

FINANCIAL ACCOUNTING OF COMPANIES: BASIC CONCEPTS AND LEDGER ACCOUNTS

MEMORANDUMS
ACTIVITY 1

sheet: Activity 1

MEMORANDUM

1 Shareholders G
2 Directors D
3 Independent auditor A
4 Directors’ fees K
5 Audit fees B
6 Shares J
7 Dividends C
8 Companies Act No 71 of 2008 L
9 Limited liability E
10 Separation of ownership from control of a F
company
11 Memorandum of Incorporation H
12 Companies and Intellectual Property Commission I

EXAMPLE 2.1

MEMORANDUM:
Double entries will be as follows:
No Account debited Account credited A OE L
1. No entry in accounting records
2. Bank Ordinary share capital +102 000 +102 000 0
3. SARS (Income tax) Bank -36 000 0 -36 000
4. Ordinary share dividends Bank -15 000 -15 000 0
5. SARS (Income tax) Bank -34 000 0 -34 000
6. Ordinary share dividends Shareholders for dividends 0 -20 400 +20 400
7. Director fees Bank -60 000 -60 000 0
8. Audit fees Bank -30 000 -30 000 0

ACCE 312: Practical Reader/SU 2/Memorandum

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 HOMEWORK 2.1

BUNDU PAINTS LIMITED

MEMORANDUM: HOMEWORK 2.1
NO. Account debited Account credited A OE L
1 NO ENTRY
2 SARS (Income tax) Bank -16 500 0 -16 500
3 NO ENTRY

4 Ordinary share Shareholders for 0 - 15 000 + 15 000

dividends dividends
5 Shareholders for Bank -15 000 0 -15 000
dividends
6 Bank Ordinary share +80 000 + 80 000 0
capital
7 SARS (Income tax) Bank - 16 500 - 16 500
8 Profit & Loss Appropriation acc 0 + 120 000 0
-120 000
Income tax SARS (Income tax) 0 -42 000 + 42 000

Ordinary share Shareholders for 0 -48 000 + 48 000

dividends dividends

ACCE 312: Practical Reader/SU 2/Memorandum

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ASSIGNMENT 2

PHOENIX LIMITED
MEMORANDUM: ASSIGNMENT 2

ASSETS EQUITY LIABILITIES

No Influence Reason Influence Reason Influence Reason
1. - 6 500 Payment to
SARS
+6 500 Bank overdraft
increase
-8000 Payment to
shareholders
+8 000 Bank overdraft
increase
2. -52 400 Payment to
SARS
+52 400 Bank overdraft
increase
3 -25 000 Ordinary share + 25 000 Bank overdraft
div is expense increase
4 -750 Equipment -750 Directors
decrease remuneration is
expense
5 -18 750 Ordinary share +18750 Shareholders
div is expense for div is
liability
6 NO ENTRY
7 + 60 000 Ordinary share -60 000 Bank overdraft
capital increase decrease
8 -110 000 Income tax is + 110 000 Owe SARS
expense that more
increase

ACCE 312: Practical Reader/SU 2/Memorandum

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NO. Account debited Account credited A OE L
1. SARS (Income tax) Bank (Overdraft) 0 0 -6 500
+6 500
Shareholders for Bank 0 0 -8 000
dividends +8 000
2. SARS (Income tax) Bank 0 0 -52 400
+52 400
3. Ordinary share Bank 0 -25 000 +25 000
dividends
4. Director fees Equipment -750 -750 0
5. Ordinary share Shareholders for 0 -18 750 +18 750
dividends dividends
6. NO ENTRY
7. Bank Ordinary share 0 +60 000 -60 000
capital
8. Income tax SARS (Income tax) 0 -110 000 +110 000

ACCE 312: Practical Reader/SU 2/Memorandum

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