FINANCIAL

ACCOUNTING
EXAMINATION
Instructions to candidates

1. Answer ALL four questions

2. Show all your calculations

3. Marks will be awarded for neatness and presentation

4. Analysis of questions

Question Topic Marks Approximate Time

1 Sole proprietorships 25 45 minutes
2 Departmental financial statements 20 36 minutes
3 Limited liability companies 30 54 minutes
4 Clubs and associations 25 45 minutes
180 minutes

QUESTION 1 Financial statements of sole proprietorships

From the following trial balance prepare the following:

1) Statement of comprehensive income (20 marks)

2) Statement of changes in equity (5 marks)

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Mona Traders
Pre-adjustment trial balance on 28 February 20.6
Balance Sheet Accounts Section Debit ($) Credit ($)
Capital 275,830
Drawings 44,000
Loan: Ben Bank (20% p.a.) 25,000
Land and buildings 200,110
Equipment 60,000
Vehicles 120,000
Accumulated depreciation on equipment 11,400
Accumulated depreciation on vehicles 52,500
Fixed deposit: Ben Bank (16% p.a.) 20,000
Debtors control 17,210
Provision for bad debts 700
Creditors control 20,000
Bank 6,240
Petty cash 500
Nominal accounts section
Sales 281,700
Sales returns 2,000
Opening inventory 35,000
Purchases 134,250
Purchases returns 4,370
Carriage on purchases 11,400
Discount allowed 750
Discount received 600
Rent income 26,000
Insurance 1,950
Interest on loan 3,750
Interest on fixed deposit 1,600
Salaries 20,320
Water and electricity 6,720
Rates 3,000
Stationery 800
Motor expenses 8,200
Advertising 1,600
Bank charges 400
Bad debts 1,500
699,700 699,700

Closing inventory 34,700

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QUESTION 2: Departmental financial statements

Zano Projects Inc. has two departments. They maintain separate records for
each department.

Department I Department II Other balances

$ $ $
Opening Stock 1 April 2023 25,000 20,000
Purchases 230,000 190,000
Purchase Returns 2,000 1,000
Sales 633,000 492,000
Sales Returns 3,000 2,000
Wages & Salaries 180,000 160,000
Miscellaneous Charges 35,000 32,000
Closing Stock on 31 March 2024 26,000 24,000
Sundry Debtors 190,000
Sundry Creditors 173,000
Plant and Machinery 240,000
Leasehold Land 80,000
Buildings 120,000
Furniture and Fittings 48,000
Selling Expenses 128,000
Cash in hand on 31 March 2024 8,000
Cash at Bank on 31 March 2024 110,000
Proprietors Capital 500,000

Additional information

Depreciate Plant & Machinery by 331/3 %, Building by 5% and Furniture &

Fittings by 10%. All unallocated expenses are to be allocated on the basis of
net sales of each department.

Required to prepare

1) A departmental income statement (10 marks)

2) A Statement of Financial Position for the year ended on 31st March,

2024(10 marks)

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QUESTION 3: Limited Companies Financial Statements

Ex ample
The information that follows was taken from the accounting records of Hart Ltd
on 30 June 20.15 (the end of the financial year).

HART Ltd
TRIAL BALANCE AS AT 30 JUNE 20.15
Balance Sheet Accounts Section Debit ($) Credit ($)

Ordinary share capital 400,000

Retained earnings 432,000
Land and buildings 991,600
Vehicles (cost) 80,000
Equipment (cost) 150,000
Accumulated depreciation on vehicles 14,000
Accumulated depreciation on equipment 28,000
Long-term loan: Mac Bank (14% p.a.) 264,000
Debentures (13% p.a.) 200,000
Investment in Vac (Pty) Ltd 48,000
Inventory (30 June 20.14) 112,000
Debtors control 128,000
Provision for bad debts 2,560
Bank 114,260
Creditors control 54,260
Zimbabwe Revenue Authority (ZIMRA): Company tax 35,000

Nominal accounts section

Sales 1,055,080
Purchases 458,000
Sales returns 10,000
Purchases returns 12,000
Customs duty 10,800
Carriage on purchases 35,000
Carriage on sales 6,000
Sundry expenses 29,740
Salaries 128,000
Motor expenses 3,600
Interest on loan 36,960
Discount allowed 3,880
Commission income 36,100
Directors’ fees 60,000
Auditor’s fee 12,000
Ordinary share dividends (interim) 16,000
Repairs 29,160
2,498,000 2,498,000

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Additional information
1 The provision for bad debts must be increased by $1 840.
2 Trading inventory according to stocktaking on 30 June 20.15 amounted to
$96 000.
3 Capital repayments totalling $24 000 are payable on the unsecured loan
from Mac Bank in the next financial year.
4 Depreciation must be provided for as follows:
■ on vehicles at 20% on cost
■ on equipment at 28% on cost
5 A dividend of 20% of the investment value has been declared by Vac (Pty)
Ltd. The dividend has not yet been received.
6 The authorised share capital consists of 500 000 ordinary shares.
Note: On 01 July 20.14, the company increased the ordinary share capital
by issuing 100 000 shares at $1 each.
7 A non-distributable asset replacement reserve of $100 000 must be
created.
Debentures consist of 20 000 13% debentures of R10 each, issued on 01
8 July 20.13 and redeemable on 30 June 20.18. The debentures are secured
by a first mortgage bond over land. Provision must be made for the
current year’s interest.
9 The company tax for the year amounted to $62 400.
10 The directors declared a final dividend of 8 cents per share.

Required

Prepare the following

1) Income statement (10 marks)

2) Appropriation account (5 marks)

3) Statement of changes in equity (5 marks)

4) Statement of financial position as at end of financial year (10 marks)

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QUESTION 4: Financial statements of clubs and associations

The Mpandawana Ladies Soccer Club runs a soccer section, supported by a

bar and restaurant for club members (Mpandawana Divas Bar and
Restaurant).

The statement of financial position of the Mpandawana Ladies Soccer Club

at 31 March 2023 is summarised as follows:

ASSETS
Non-current assets 15,880
Premises 12,100
Furniture 3,780

Current assets 1,847

Stocks Restaurant 109
Bar 385
Bank 1,353
Total assets 17,727

Accumulated fund and liabilities

Accumulated fund 16,548

Current liabilities 1,179

Creditors Bar 469
Restaurant 225
Repairs 81
Subscriptions 404
Total accumulated fund and liabilities 17,727

The Club treasurer provides the following information:-

RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2024
Balance b/d 1,353 Wages 2,640
Bar sales 9,421 Electricity and Water 602
Restaurant sales 6,315 Repairs and maintenance 1,091
Subscriptions 2023 812 Sports equipment 3,810
2024 3,050 General expenses 1,210
2025 346 Furniture 460
Entrance fees 820 Bar purchases 6,437
Donations 676 Restaurant purchases 4,114
Bank balance c/d 1,429
Savings Bank balance 1,000
22,793 22,793

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 st
1 Stocks at 31 March 2024 $
Bar 309
Restaurant 180
489

st
2 Creditors at 31 March 2024
$
Bar 806
Restaurant 180
986

3 Furniture is depreciated at 20% per annum on the reducing balance

method. Sports equipment is charged in full in the year of purchase.

You are required to prepare

1) A columnar bar and restaurant income statement (8 marks)

2) An income and expenditure account for the year ended 31 March

2024 (7 marks)

3) A statement of financial position as on that date (10 marks)

End of Examination

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