FINAL ONLINE SUMMATIVE ASSESSMENT
Bachelor of Public Administration
Bachelor of Business Administration
Bachelor of Commerce in Digital Marketing
Bachelor of Commerce in Project Management
Bachelor of Commerce in International Business
PROGRAMME Bachelor of Commerce in Financial Management
Bachelor of Commerce in Marketing Management
Bachelor of Commerce in Supply Chain Management
Bachelor of Commerce in Human Resource Management
Bachelor of Commerce in Information and Technology Management
Bachelor of Commerce in Tourism and Hospitality Management (New)
MODULE Financial Reporting and Analysis
YEAR One (1)
INTAKE January 2024 Semester 2
DATE 12 November 2024
TOTAL MARKS 100
Answer ALL questions. [100 MARKS]
QUESTION 1 (20 Marks)
REQUIRED
Prepare the Statement of Financial Position as at 29 February 2024.
INFORMATION
The following information was obtained from the accounting records of Kingsway Suppliers on 29 February
2024, the end of the financial year.
KINGSWAY SUPPLIERS
PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2024
Debit (R) Credit (R)
Balance Sheet accounts section
Capital 798 850
Drawings 150 000
Vehicles at cost 990 000
Equipment at cost 460 000
Accumulated depreciation on vehicles 190 000
Accumulated depreciation on equipment 138 000
Fixed deposit: Fin Bank (12% p.a.) 40 000
Trading inventory 312 500
Debtors control 166 500
Provision for bad debts 4 500
Bank 241 000
Petty cash 2 500
Creditors control 78 500
Long-term loan: Fin Bank (18% p.a.) 350 000
Nominal accounts section
Sales 3 600 000
Cost of sales 1 550 000
Sales returns 45 000
Salaries and wages 700 000
Discount received 3 000
Discount allowed 2 000
Rent expense 180 000
Motor expenses 58 500
Advertising 48 000
Telephone 42 000
Electricity and water 52 500
Bank charges 24 000
Insurance 31 000
Interest on mortgage loan 47 250
Interest on fixed deposit 2 400
Consumable stores 22 500
5 165 250 5 165 250
Adjustments and additional information
1. Inventories, cost price R6 000, were donated to a local charity on 26 February 2024. No entry was
made for this.
2. According to stocktaking at the end of the financial year, the following were on hand:
Trading inventory R296 500
Consumable stores R1 500.
3. Interest of R15 750 is due on the long-term loan. Interest is not capitalised. Repayments to be
made during the next financial period are expected to reduce the loan balance by R100 000.
4. Provide for interest not yet received on the fixed deposit. The investment in fixed deposit was made
on 28 February 2023 and it matures on 30 June 2024. Interest is not capitalised.
5. In terms of the rental agreement the rent expense for the first ten months of the financial year was
R16 000 per month. Thereafter, the monthly rental increased by R4 000.
6. The advertising total includes a payment of R3 600 for an advertisement that was due to appear in
March 2024.
7. The telephone account for February 2024 was due to be paid on 02 March 2024, R3 900.
8. The bank statement from Fin Bank reflected bank charges that must still be recorded, R2 150.
9. 3 500.
10. An account of R4 500 was received from Hooper Tyres to replace the tyres of one of the vehicles.
No entry was made for this. Note: Do not treat this as accrued expenses.
11. The account of a debtor, P. Thomas, must be written off as irrecoverable, R6 500.
12. The provision for bad debts must be increased by R3 500.
13. Provide for depreciation as follows:
13.1 On vehicles at 15% per annum on cost.
13.2 On equipment at 20% per annum using the diminishing balance method.
14. The net profit, after taking all the information provided above into account, amounted to R528 450.
QUESTION 2 (20 Marks)
REQUIRED
Prepare the Statement of Changes in Equity for the year ended 29 February 2024.
INFORMATION
The information given below was extracted from the accounting records of Mansel Traders, a partnership
business with Mandy and Selina as partners.
Extract from the ledger of Mansel Traders on 29 February 2024 (end of the financial year)
Debit (R) Credit (R)
Capital: Mandy 800 000
Capital: Selina 200 000
Current a/c: Mandy (01 March 2023) 60 000
Current a/c: Selina (01 March 2023) 70 000
Drawings: Mandy 320 000
Drawings: Selina 180 000
The following must be considered:
(a) The net profit for the year ended 29 February 2024 amounted to R600 000.
(b) The partners are entitled to interest on capital at 15% per year. Note: Mandy increased her capital
by R400 000 on 01 September 2023. Selina decreased her capital by R200 000 on the same date.
The entries to record the capital changes have been made.
(c) In terms of the partnership agreement the partners are entitled to the following monthly salaries:
Mandy R18 000
Selina R14 000
(d) Selina is entitled to a bonus of R20 000 plus 10% of the net profit (before any appropriations).
(e) The balance of the profit (shortfall) must be shared between Mandy and Selina in the ratio of their
capital balances as at the beginning of the financial year.
QUESTION 3 (20 Marks)
REQUIRED
Prepare the Statement of Comprehensive Income for the year ended 31 December 2023. Some of the
amounts have been entered in the answer book for you.
INFORMATION
The information given below was extracted from the accounting records of Cheshire Limited on 31 December
2023 (the end of the financial year).
CHESHIRE LIMITED
PRE-ADJUSTMENT TRIAL BALANCE AS AT 31 DECEMBER 2023
Balance Sheet Accounts Section Debit (R) Credit (R)
Ordinary share capital 1 600 000
Retained earnings 200 000
Land and buildings 2 700 000
Vehicles (cost) 650 000
Equipment (cost) 500 000
Accumulated depreciation on vehicles 250 000
Accumulated depreciation on equipment 200 000
Debentures (10% p.a.) 1 300 000
Debtors control 180 000
Provision for bad debts 10 000
Bank 115 000
Creditors control 465 000
South African Revenue Services: Company tax 145 000
Nominal accounts section
Sales 3 785 000
Purchases 2 055 000
Sales returns 25 000
Purchases returns 165 000
Opening inventory 550 000
Carriage on purchases 40 000
Maintenance 35 000
Rates 25 000
Carriage on sales 50 000
Wages and salaries 400 000
Stationery 5 000
Bad debts 10 000
Sundry expenses 35 000
Insurance 15 000
Telephone 35 000
Water and electricity 40 000
240 000
25 000
Ordinary share dividends 100 000
7 975 000 7 975 000
Additional information
1. Physical stocktaking on 31 December 2023 revealed the following inventories:
1.1 Trading inventory, R180 000
1.2 Stationery, R1 000.
2. A notice from the municipality reflected the rates assessment for the year ended 31 December
2023 to be R24 000.
3. Depreciation must be provided as follows:
3.1 On vehicles, R80 000.
3.2 On equipment at 10% per annum on cost. Note: Equipment with a cost price of R100 000 was
purchased on 01 July 2023. This transaction has been recorded.
4. A debtor, who owed R5 000, was declared insolvent. Cheshire Limited received and recorded
40% of the amount owed. The balance of his account must now be written off.
5. The insurance total includes an insurance premium of R6 000 that was paid for the period 01
April 2023 to 31 March 2024.
6. An amount of R10 000 was due to be paid for audit fees on 02 January 2024.
7. The provision for bad debts must be increased to R11 000.
8. Provide for interest on debentures that is yet to be paid.
9. An amount of R69 535 was overpaid to South African Revenue Services for company tax.
QUESTION 4 (20 Marks)
REQUIRED
Prepare the Cash Flow Statement of Elsies Limited for the year ended 31 December 2023.
INFORMATION
Extracts of the financial statements of Elsies Limited are as follows:
Elsies Limited
Statement of Financial Position as at 31 December:
Assets 2023 (R) 2022 (R)
Property, plant and equipment 3 125 000 2 500 000
Investments 175 000 200 000
Inventory 1 075 000 1 025 000
Accounts receivable 950 000 875 000
Cash and cash equivalents 250 000 175 000
5 575 000 4 775 000
Equity and liabilities
Ordinary share capital (155 000 shares) 1 550 000 1 550 000
Retained earnings 1 500 000 1 250 000
Non-current liabilities 1 800 000 1 675 000
Accounts payable 600 000 135 000
Dividends payable 100 000 125 000
Company tax payable 25 000 40 000
5 575 000 4 775 000
Statement of Comprehensive Income for the year ended 31 December 2023
R
Sales 5 500 000
Cost of sales 3 250 000
Depreciation 375 000
Operating profit 825 000
Interest expense 225 000
Company tax 200 000
Additional information
The interim dividend paid during 2023 amounted to R50 000.
All purchases and sales of inventory are on credit.
Credit terms to debtors are 30 days.
QUESTION 5 (20 Marks)
REQUIRED
Use the information provided in Question 4 to answer the following:
5.1 Calculate the following ratios for 2023 only. Note: Use the formulas provided in the formula sheet
only (that appear after QUESTION 5). The answers to the ratios must be expressed to two decimal
places and be fully stated e.g. 2.15:1; 24.67% etc.
5.1.1 Gross margin (2 marks)
5.1.2 Inventory turnover (2 marks)
5.1.3 Acid test ratio (2 marks)
5.1.4 Return on assets (2 marks)
5.1.5 Debt to assets (2 marks)
5.1.6 Dividend per share (2 marks)
5.1.7 Debt to equity (2 marks)
5.2 Comment briefly but meaningfully on the following ratios:
2023 2022
5.2.1 Debtor collection period 63 days 44 days (2 marks)
5.2.2 Current ratio 3.14:1 6.92:1 (2 marks)
5.2.3 Return on equity 13.11% 19.25% (2 marks)
END OF PAPER
TOTAL: 100 MARKS
FORMULA SHEET
Gross profit X 100 Total debt X 100
Sales 1 Total assets 1
Profit after tax X 100 Non-current debt X 100
Sales 1 Equity 1
Operating profit X 100 Operating profit
Total assets 1 Interest expense
Profit after tax X 100 Profit after tax X 100
Equity 1 No. of ordinary shares issued 1
Current assets Dividends for the year X 100
Current liabilities No. of ordinary shares issued 1
Current assets Inventory Market price per share
Current liabilities Earnings per share
Cost of sales Earnings per share X 100
Average inventory Market price per share 1
Accounts receivable X 365 Dividend per share X 100
Credit sales 1 Market price per share 1
Accounts payable X 365
Credit purchases 1
