Directorate: Curriculum FET
TELEMATIC SCHOOLS PROJECT
2021
Accounting
Grade 11
Activities & Workbook
FOREWORD
Dear Accounting learner
Welcome to the Telematic Schools Project. The 2021 Grade 11 topics, listed below, were chosen to
strengthen your knowledge and skills on those sub-topics that either continue in Grade 12 or have been
excluded in the 2020 Revised Curriculum, but brought back into the Grade 11 curriculum in 2021.
You are already preparing for 2022 Grade 12 Accounting, so it is important that you understand each
aspect explained in the lessons. The video lessons will be chunked into shorter video clips so that you
can download only those aspect(s) of the lesson you want to review and revise. The shorter video clips
and the full one hour broadcasts can be accessed on the Telematics website at schools.sun.ac.za. The
Telematics material will also be available from the WCED e-portal at https://wcedeportal.co.za
You will only pass Accounting successfully in Gr 11 (and eventually in Gr 12) if you:
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Start working from DAY ONE of the academic year
Pay careful attention in class (or online) to ensure that you understand
Complete Accounting classwork and/or homework daily PRACTICE…PRACTICE…PRACTICE
Work neatly and accurately
Always show calculations in brackets
Read instructions to questions/activities carefully to ensure you know what is being asked
Complete SBA tasks and assessment activities including tests diligently as if preparing for your
final examination - be proud of your work.
Work through as many past papers and other revision resources as possible to keep you
Accounting 'fit' and 'sharp'
Refine your examination preparation techniques: choose questions that will extend you in your
weaker areas.
Use the time allocations provided in the question to practice time management. Ensure that you
can complete a question in the alloted time. Use time saving reading techniques which will come in
handy in tests and exams.
Ensure you are well prepared for Paper 1 AND Paper 2 to increase your chances of scoring good
marks.
ALWAYS use your OWN calculator - apply and practice time saving techniques
All the best for 2021. Working diligently always brings success.
Mrs E Eksteen
WCED Senior Curriculum Planner
Accounting
Gr 11 Telematics
2
Accounting 2021
TELEMATIC ACCOUNTING BROADCASTING TIMES (ENG) with topics and lesson scope
Date
Time
Topic
By the end of a lesson you should understand:
Tuesday,
2 March 2021
15:00 – 16:00
▪ Reconciliations
▪ Bank reconciliation (excluding cheques)
▪ Creditors reconciliation (monthly statement with
Creditor's ledger)
▪ Creditors Ledger account with Creditors control
(Gr 10 revision)
Tuesday,
9 March 2021
15:00 – 16:00
▪ Movement and
management of
Fixed Assets
Consolidate 2020 Telematics lessons on:
▪ Recording the movement of Fixed Assets
▪ Calculations applicable to Fixed Assets
▪ Reporting of Fixed Assets
▪ Internal management and control of Fixed Assets
TERM 1
▪ Asset Disposal
Thursday,
11 March 2021
15:00 – 16:00
▪ Partnerships
▪ Final accounts with basic adjustments and
reversal entries
16:00 - 17:00
▪ Partnerships
▪ Financial statements and notes (unique to
partnerships)
▪ Analysis of financial statements
16:00 – 17:00
▪ Budgeting and
Forecasting
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TERM 2
Tuesday,
20 April 2021
TERM 3
Tuesday,
27 July 2021
Cash Budgets for sole traders
Debtors collection schedule
Creditors payment schedule
Projected Income Statement
LESSON 1: RECONCILIATIONS
Background information impacting directly on Bank Reconciliation
Farewell to the Cheque Book
The South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Payments Association of South
Africa (PASA) and the Banking Association South Africa (BASA) jointly announced that the issuing and the acceptance of
cheques will cease on 31 December 2020.
Cheques were instructions to a bank to pay the bearer cash on presentation. It WAS a safer way to carry large amounts of
cash. Safer, more convenient and cost-effective methods of exchanging money have been developed in the last 40
years, e.g. electronic payments such as cards and electronic funds transfers (EFTs).
Challenges/Disadvantages for using cheques (Reasons for the discontinuation of cheques):
• Decline in usage
• A lengthy processing period, (seven to fifteen days clearance)
• Cheques are a costly payment instrument, (printing of cheque books, transporting cheques, etc)
• Fraud perpetrated through the issuing of cheques
• Ageing inter-bank cheque processing infrastructure
• The restricted acceptance of cheques
• Limited education and protection for the consumer, and
• The impact of the coronavirus pandemic forced people to accept modern payment alternatives.
Gr 11 Telematics
3
Accounting 2021
Source: Moneyweb.com
Baseline (Self-study) (Informal assessment)
Complete the table below in your own words (Use your text book and class notes)
Purpose of Bank
reconciliation
How to treat the items below in the bank reconciliation process:
Outstanding deposits
(appear in the CRJ, but not in the
Banks statement)
Service fees, cash deposit
fees, credit card levies
(appear on the BS but not in the
CPJ)
Interest on overdraft
(appears on the bank statement but
not in the CPJ)
Debit orders /Stop orders
(appears on the bank statement but
not in the CPJ)
Future-dated Electronic
payments made
(appear in the CPJ but not on the
bank statement)
Direct deposits (EFTs received)
(appear on the bank statement but
not in the CRJ)
Interest earned on credit
bank balances
(appears on the bank statement but
not in the CRJ)
Errors in the CPJ
Errors in the CRJ
Errors on the Bank
statement
Internal control measures
for cash (at least two)
Gr 11 Telematics
4
Accounting 2021
BANK RECONCILIATION (Paper 2)
ACTIVITY 1: BANK RECONCILIATION (no cheques)
The information relates to BJ Traders for May and June 2020.
REQUIRED:
1.
The owner, Ben Joseph, realises that many people are now using electronic funds transfers
(EFTs) instead of cheques.
1.1
State THREE advantages of EFTs.
1.2
Janet, the bookkeeper, has been assigned the duty of processing AND controlling all
EFTs. Explain TWO reasons why the internal auditor is concerned about this.
2.
Show changes in the Cash Journals for June 2020.
3.
Calculate the correct Bank Account balance on 30 June 2020.
4.
Prepare the Bank Reconciliation Statement on 30 June 2020.
INFORMATION:
A.
Extract from the Bank Reconciliation Statement on 31 May 2020
Outstanding deposit
Outstanding EFT made:
No.
Date
112
30 May 2020
Favourable balance on Bank Account
R9 500
R7 950
R9 200
NOTE:
•
•
B.
The outstanding deposit appeared on the June Bank Statement.
EFT 112 appeared on the June Bank Statement with the correct amount of
R5 950.
Provisional totals in the Cash Journals on 30 June 2020 before compared to the
Bank Statement:
Cash Receipts Journal:
Cash Payments Journal:
C.
Entries in the Cash Journals NOT on the June Bank Statement:
•
•
•
D.
R27 470
R32 400
Deposit, R9 675
EFT 214 (30 June 2020), R3 800
EFT 217 (12 August 2020), R4 580
Entries on the June 2020 Bank Statement NOT in the Cash Journals:
DATE
15
25
30
30
DETAILS
Debit order: Micro Insurance*
Debit order: Micro Insurance*
M. Moloy (EFT made by tenant)
Interest income
Service fees
R
1 125
1 125
2 800
130
175
*Insurance appeared twice in error. This will be rectified next month.
E.
Bank Statement balance on 30 June 2020: …?
Gr 11 Telematics
5
Accounting 2021
ACTIVITY 1: WORK SHEET: BANK RECONCILIATION (no cheques)
1.1
State THREE advantages of EFTs.
1.2
Explain TWO reasons why the internal auditor was concerned about this.
2.
Show the changes in the Cash Journals for June 2020
CASH RECEIPTS JOURNAL
CASH PAYMENTS JOURNAL
27 470
32 400

TOTALS
3.
Calculate the Bank Account balance
Workings
4.
Answer
BANK RECONCILIATION STATEMENT ON 30 JUNE 2020
DEBIT
Gr 11 Telematics
6
CREDIT
Accounting 2021
Creditors Reconciliation (Paper 2)
ACTIVITY 2
Claire Traders buys goods on credit from Mariti Suppliers.
REQUIRED
2.1
Use the table provided to indicate changes to the:
• Creditors' Ledger Account in the books of Claire Traders
• Creditors' Reconciliation Statement on 31 July 2020
2.2
The internal auditor insists that only direct payments (EFTs) be used to pay suppliers. Explain
TWO internal procedures to ensure control over EFT payments.
2.3
Refer to Invoice 301. It was discovered that the store manager, Vernon, had signed a fictitious
order form and took the goods for himself when they arrived. Besides dismissing Vernon, provide:
• ONE suggestion for action to be taken against him
• ONE suggestion to prevent this problem in future
INFORMATION
A.
Creditors' Ledger of Claire Traders
MARITI SUPPLIERS (CL5)
DEBIT
1
10
2020
July
17
21
24
27
31
B.
Balance
Invoice 209
EFT
Debit Note 674
Invoice 282
Invoice 301
Invoice 360
Debit Note 995
Journal Voucher 570
EFT and discount
CREDIT
b/d
BALANCE
67 500
81 000
33 750
8 640
40 950
25 000
50 250
8 100
5 400
77 190
147 820
Statement of account from Mariti Suppliers
MARITI SUPPLIERS
Claire Traders
25 July 2020
108 Kruger Road
DEBIT
1
10
2020
July
17
21
24
C.
Balance
Invoice 209
Receipt 695
Credit Note 741
Invoice 301
Invoice 360
Credit Note 811
CREDIT
BALANCE
67 500
81 000
33 750
6 840
25 000
20 250
8 100
145 060
Differences noted:
(a)
(b)
(c)
(d)
(e)
(f)
The incorrect entry for Debit Note 674 in the Creditor's Ledger Account of Mariti Suppliers
relates to the correct Credit Note 741 on the statement.
Invoice 282 was incorrectly reflected in the account of Mariti Suppliers in the Creditors' Ledger.
The goods were purchased from Genesis Suppliers.
Invoice 360 was incorrectly recorded on the statement from Mariti Suppliers.
Mariti Suppliers also purchased goods on credit from Claire Traders. Claire Traders has
transferred a debit balance from the Debtors' Ledger (Journal Voucher 570). Mariti Suppliers will
offset this on the next statement.
The transaction on 24 July 2020 is for merchandise returned to Mariti Suppliers.
The statement reflects transactions up to 25 July 2020.
Gr 11 Telematics
7
Accounting 2021
ACTIVITY 2 - WORK SHEET: CREDITORS RECONCILIATION
2.1
Balance
CREDITORS LEDGER:
MARITI SUPPLIERS
STATEMENT OF
ACCOUNT
147 820
145 060
(a)
(b)
(c)
(d)
(e)
(f)
2.2
The internal auditor insists that only direct payments (EFTs) be used to pay suppliers.
Explain TWO internal procedures to ensure control over EFT payments.
2.3
Besides dismissing Vernon, provide ONE suggestion for action to be taken against him.
Provide ONE suggestion to prevent this problem in future.
Gr 11 Telematics
8
Accounting 2021
LESSON 2: FIXED ASSETS (Paper 1 & 2)
Use these links to the 2020 Telematics Gr 11/12 Activities & Workbook for basic
information, formats of the ledger accounts (e.g. Asset disposal, etc.) and baseline
activities for Fixed Assets.
https://wcedeportal.co.za/eresource/177441
ACTIVITY 1 (Fixed assets in the Financial Statements) Paper 1 or 2
The following information was taken from the records of BB Traders, with partners Butch and Bella.
The financial year ended on 28 February 2020.
REQUIRED:
Complete the Fixed Assets Note to the Financial Statements.
INFORMATION
A.
Extract from the list of balances on 28 February 2020
Vehicles
Equipment
Accumulated depreciation on vehicles (1/3/2019)
Accumulated depreciation on equipment (1/3/2019)
B.
C.
700 000
430 000
280 000
193 500
Vehicles
• A new vehicle, costing R145 000 was purchased on 1 June 2019.
• Depreciation provided on vehicles at 20% p.a. on carrying value
Equipment
• The old office desk was sold on 31 December 2019 at a profit of R320. The cost of the
desk was R5 400. It was sold for R1 750 cash.
• Depreciation written off on equipment at 15% on cost.
ACTIVITY 1: WORK SHEET (Fixed assets in Financial Statements)
FIXED ASSETS
VEHICLES
EQUIPMENT
Carrying value - beginning of year
Cost
Accumulated depreciation
(280 000)
(193 500)
700 000
430 000
Movements
Carrying value – end of year
Cost
Accumulated Depreciation
Gr 11 Telematics
9
Accounting 2021
ACTIVITY 2 (Fixed assets note and Asset disposal)
The following information relates to Odette Traders. The financial year ended on 28 February 2020.
REQUIRED:
2.1
2.2.
2.3
Provide a reason why Land & Buildings is usually not depreciated.
Calculate the missing amounts denoted by (a) to (e) in Fixed Assets Note.
Odette budgeted R65 000 for vehicle expenses in the year ended 28 February 2020, that
included maintenance and licenses. When the Statement of Comprehensive Income was
presented, she noticed the actual costs were R105 000.
Discuss TWO possible reasons for this difference. Suggest TWO measures to her that she
could use in future to prevent these differences.
INFORMATION:
Fixed assets:
LAND AND
BUILDINGS
Carrying value (1/3/2019)
VEHICLES
(a)
EQUIPMENT
TOTAL
35 000
Cost
350 000
Accumulated depreciation
460 000
(315 000)
Movements:
Additions
325 000
422 550
0
Disposals
0
0
(d)
(b)
(13 766)
(c)
50 994
772 550
340 000
Depreciation
Carrying value (28/02/2020)
2 550 000
Cost
(e)
Accumulated depreciation
•
•
Depreciation on vehicles is calculated at 20% p.a. on cost.
The business has two vehicles on 28 February 2020. One of these vehicles was purchased on
1 September 2019.
•
Extract from the Fixed Assets Register in respect of equipment sold:
Fridge (Model X3)
Date purchased: 1 March 2017
Date sold: 31 December 2019
Sold for: R81 250
Depreciation rate: 10% p.a. (diminishing-balance method)
28 February 2018
28 February 2019
31 December 2019
Gr 11 Telematics
COST
R120 000
DEPRECIATION
R12 000
?
?
10
BOOK VALUE
R108 000
?
?
Accounting 2021
ACTIVITY 2: WORK SHEET (Fixed assets)
2.1
Provide a reason as to why Land & Buildings is usually not depreciated.
2.2(a) Carrying value of Land and Buildings on 1 March 2019
ANSWER
(b) Total depreciation on vehicles on 28 February 2020
(c) Carrying value of Vehicles on 28 February 2020
(d) Carrying value of Equipment sold on 31 December 2019
(e) Calculate the total carrying value of fixed assets on 28 February 2020
2.3
Discuss TWO possible reasons for this difference. Suggest TWO measures to her that
she could use in future to prevent these differences.
Reasons:
Suggestions:
Gr 11 Telematics
11
Accounting 2021
LESSON 3: PARTNERSHIPS FINAL ACCOUNTS
BASELINE KNOWLEDGE
Comparison between Sole trader and Partnerships in terms of unique accounts and final accounts
ONE owner:
SOLE TRADER
One Capital account
One Drawings account
The net profit is transferred from the
PARTNERSHIPS
TWO or more owners: (for EACH owner/partner)
Capital: Partner A;
Capital: Partner B
Drawings: Partner A; Drawings: Partner B
Current a/c: Partner A; Current a/c: Partner B
The net profit is transferred from the
Profit and Loss a/c (final a/c) TO the
Capital a/c (balance sheet a/c; owners euity a/c)
Profit and Loss a/c (final a/c) TO the
Appropriation a/c (final a/c) to record the
distribution of the net profit between partners
according to the partnership agreement
Drawings a/c is closed off to Capital a/c at the end of
the financial year (the capital contribution of the
owner is decreased)
Drawings a/c of each partner is closed of the
Current a/c of each partner at the end of the financial
year.
Capital a/c balance varies every year as net profit is
added and drawings subtracted.
Capital a/c balances will only change if a partner
increases or decreased his/her capital contribution.
Final accounts:
Trading a/c; Profit and loss a/c
Final accounts:
Trading a/c; Profit and loss a/c
Appropriation a/c
REVERSING ENTRIES
•
•
•
Reversing entries are made at the beginning of the new accounting period.
Some adjustment entries made at the end of the previous accounting period are simply reversed
The ONLY adjustments that are reversed are:
Adjustment entry
Reversing entry
Accrued income
Dr Accrued income
Cr Accrued income
Prepaid expenses
Dr Prepaid expenses
Cr Prepaid expenses
Accrued expenses
Cr Accrued expenses
Dr Accrued expenses
Income received in advance
Cr Income received in advance
Dr Income received in advance
NOTE:
Adjustments for depreciation, bad debts and other adjustments are never reversed.
ACTIVITY 1: Final accounts (reversing entries included)
The information below relates to partnership Zastro Traders, owned by partners Zach and Tara.
Zach started the business and Tara joined him as a partner two years ago. Their financial year ends
annually on 28 February.
REQUIRED:
Prepare the following accounts in the General Ledger for the year ended 28 February 2021.
Show workings in brackets.
1.1
Trading account
1.2
Profit and loss account
1.3
Appropriation account
1.4
Accrued Income
Gr 11 Telematics
12
Accounting 2021
INFORMATION:
Zastro Traders
Extract from the Pre-adjustment Trial Balance on 28 February 2021
Statement of Financial Position accounts section
Debit
Capital: Zach
Capital: Tara
Current account: Zach (1 March 2020)
Current account: Tara (1 March 2020)
Drawings: Zach
Drawings: Tara
Vehicles
Accumulated depreciation on vehicles
Loan: SABA Bank (1 March 2020)
Fixed deposit: BOB Bank (6% p.a.)
Trading stock
Debtors Control
Provision for bad debts
Accrued income (1/3/2020) (Interest on fixed deposit)
SARS (PAYE)
UIF
Credit
200 000
480 000
18 000
63 700
410 000
20 000
210 000
76 000
277 000
80 000
28 000
28 700
1 100
1 200
2 250
1 100
Nominal accounts section
Sales
Debtors allowances
Cost of Sales
Interest on fixed deposit
Interest on current account
Rent income
Salaries and wages
Employer's contribution (UIF)
Bad debts
Rates
Repairs
Insurance
Stationery
Consumable stores
?
320 000
600 000
3 600
650
43 200
39 000
1 350
19 000
5 700
8 300
12 090
7 440
18 200
ADJUSTMENTS
1.
The business maintains a mark-up of 120% on cost.
2.
Zach used office stationery for his son's school project, R300. It was entered in the CPJ and
incorrectly posted to Stationery.
3.
4.
The statement received from the municipality on 25 February 2021 showed R2 500 owing for
rates.
Depreciation on vehicles were calculated at R13 400 for the year.
5.
Insurance includes an annual premium of R3 600 which expires on 31 May 2021.
Gr 11 Telematics
13
Accounting 2021
6.
7.
8.
9.
10.
11.
12.
An EFT made to Jakes Builders in January 2021, R5 000 was debited to Repairs. Jakes
Builders had made extensions to the buildings.
The bank statement for February 2021 was received after the trial balance was drawn up.
The following items have not been recorded:
• Interest on the favourable current account balance, R300
• A direct deposit made by a debtor who was previously written off, R3 200
The provision for bad debts is to be adjusted to 10% of Debtors control
An employee was owed a salary of R4 000 (Gross) for February 2021. However, with the
partners' permission she has taken stock at cost price for R2 000 and will receive the rest of
her pay in March 2021. The PAYE deduction is R820 and UIF is 1% of gross salary. The
business also contributes 1% to the UIF. No entries have been of any of these transactions.
A physical stock count revealed the following on hand on 28 February 2021:
• Trading stock
R27 000
• Consumable stores
R 2 000
The tenant paid the rent or March and April 2021 during February 2021
NOTE: Monthly rent is annually increased on 1 January by 10%.
13.
Interest on the fixed deposit are received quarterly. The last quarter's interest is usually
received early in a new financial year. The reversal entry for the first quarter's interest have
not been made yet. The interest rate on fixed deposit was adjusted to 5% p.a. on
1 December 2020.
Interest on the loan from SABA Bank has not been recorded. Interest is capitalised. The loan
statement reflected the following:
• Balance on 1 March 2020, R277 000
• Monthly instalments paid during the year, R99 000 (loan repayments and interest)
• Balance on 28 February 2021, R193 000
14.
The partnership agreement provides for the following:
•
•
•
•
Monthly salaries to Zach, R10 000 and Tara, R6 000
A bonus to Zach as senior partner, R8 000
Interest on capital at 8% p.a. (Zach increased his capital by R50 000 half-way through the
year. This was properly recorded)
Remaining profits and losses are shared equally between partners.
ACTIVITY 1: WORK SHEET (Final accounts)
Dr
GENERAL LEDGER OF ZASTRO TRADERS
Final accounts section
Trading account
(F1)
2021
Feb
2021
Feb
28
Cost of Sales
Gr 11 Telematics
600 000
14
Cr
28
Accounting 2021
Dr
2021
Feb
Profit & Loss account
2021
Feb
28
2021
Feb
28
Cr
28
Appropriation account
2021
Feb
(F2)
(F3)
28
Statement of Financial Position section
Accrued Income
(B14)
2020
Mar
1
Balance
Gr 11 Telematics
b/d
1 200
15
Accounting 2021
LESSON 4: PARTNERSHIPS
FINANCIAL STATEMENTS & ANALYSIS
Financial statements are the prepared at the end of each financial year and conform
to the standards of generally accepted accounting practice and principles (GAAP)
Financial Statement
Purpose of the Financial Statement
Statement of Comprehensive Income
(Income Statement)
Financial result for the year, which is the Net profit (OR Net loss)
Statement of Financial Position
(Balance Sheet)
Financial position on the last day of the financial year
FORMATS: PARTNERSHIP FINANCIAL STATEMENTS
Eng.: https://wcedeportal.co.za/eresource/177731
ACTIVITY 1 STATEMENT OF COMPREHENSIVE INCOME
REQUIRED:
Complete the Statement of Comprehensive Income below. Provide missing details and calculate
missing amounts.
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2020
Sales
2 120 000
Gross Profit (60% mark-up)
Other Operating Income (list any two examples)
95 000
Gross Operating Income
Operating Expenses (list any two examples) (15% of Sales)
Operating Profit
36 400
Profit before interest expense
Net profit for the year (25% of Sales)
Gr 11 Telematics
16
Accounting 2021
ACTIVITY 2 Statement of Fin Position & Notes)
The information relates to PJ Traders (partners Pollard & Jantjies), whose financial year ended
28 February 2020.
REQUIRED
2.1
Prepare the Current accounts note to the Statement of Financial Position on 28 February 2020:
2.2
Complete the EQUITY AND LIABILITIES section of Statement of Financial Position.
INFORMATION
Balances from the ledger on 28 February 2020
A
Capital: Pollard
Capital: Jantjies
Current account: Pollard (1/3/2019)
Current account: Jantjies (1/3/2019)
Drawings: Pollard
Drawings: Jantjies
Loan: SB Bank
Creditors control
SARS (PAYE)
Bank
Accrued expenses
Income received in advance
Accrued income
Prepaid expenses
B
Changes to capital contributions
1.
The following transactions were correctly recorded:
• Partner Pollard deposited R250 000 on 1 November 2019
• Partner Jantjies withdrew R150 000 on 1 December 2019
2.
C
D
600 000
300 000
(Cr) 22 500
(Dr) 57 600
72 000
96 000
402 500
62 750
13 500
(Cr) 16 600
12 700
4 600
17 000
16 300
The following transaction was NOT recorded:
• Partner Pollard withdrew R50 000 cash on 28 February 2020.
Provisions of the partnership agreement
1.
Interest on capital:
• Pollard is entitled to 12% p.a. on his capital
• Jantjies is entitled to R49 500 in total
2.
Salary allowance:
• Jantjies will receive R144 000 for the year
• Pollard's monthly salary is R2 000 less than Jantjies
3.
Annual bonus:
• Pollard receives an annual bonus of R15 000
4.
Share in remaining profits/losses
• The remaining profit of R16 000 must be shared between Pollard and Jantjies in the ratio
3:2
Loan: SB Bank
• The loan balance does not show interest of R47 500 capitalised (included in the net profit)
• The business expects to pay back R108 000 of the loan in the next financial year.
Gr 11 Telematics
17
Accounting 2021
E
Details of an employee omitted from the February 2020 Salaries Journal are as follows:
Gross
Salary
R12 000
Employer's
contribution
Deductions
Pension
Fund
?
UIF
R120
SARS:
PAYE
?
TOTAL
R3 800
Pension
Fund
R1 440
UIF
Net
Salary
120
R8 200
NOTE:
PJ Traders contributes R1,50 for every R1 to the Pension Fund and Rand-for-Rand to the UIF.
ACTIVITY 2: WORKSHEET Statement of Fin Position & Notes
2.1 CURRENT ACCOUNTS
POLLARD
JANTJIES
Net profit for the year
Salaries
144 000
49 500
Interest on capital
Bonus
15 000
193 500
Primary distribution
Share in remaining profit
Drawings
Retained income for the year
Balance- beginning of year
(72 000)
(96 000)
Balance - end of year
147 100
46 300
2.2
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
EQUITY AND LIABILITIES
Owner’s equity
Capital
850 000
Current accounts
Non-current liabilities
Loan: SB Bank
Current liabilities
Trade and other payables (62 750
Bank overdraft (16 600 +50 000)
Current portion of loan
1 667 110
TOTAL EQUITY AND LIABILITIES
Gr 11 Telematics
18
Accounting 2021
ANALYSIS & INTERPRETATION: PARTNERSHIPS
Classify the given financial indicators in the table below:
Gross profit on cost of sales | Net profit on sales | Operating expenses on sales | Operating profit on sales | Acid test
ratio | Stock turnover rate | Stock holding period | Average debtors’ collection period | Average creditors’ payment period
Debt equity ratio (gearing) | Return on each partners’ equity | Return on average owner's equity | Return on total capital
employed (ROTCE)
Profitability
Gross profit on Sales
Liquidity
Current ratio
Solvency
Return
Risk
Solvency ratio
ACTIVITY 3 (Analysis & interpretation)
Jody and Tim are partners in a partnership, JT Sports Outfitters. They sell sports gear to local schools. The
business aims at achieving a mark-up of 50% on cost. The financial indicators below were calculated from the
financial statements for the past two years ended 30 September.
REQUIRED
Study the extract from the financial statements and financial indicators and then answer the
questions in your Workbook.
INFORMATION
A.
Extract from the Statement of Financial Position with comparative figures:
2020
2019
Non-current liabilities (13%p.a)
Trading stock
Trade and other receivables (all debtors)
Cash and Cash equivalents
Trade and other payables (all creditors)
B.
220 000
1 270 000
240 000
30 000
380 000
180 000
650 000
50 000
25 000
150 000
Financial indicators
% Return on average equity (Partner: Jody)
% Return on average equity (Partner: Tim)
Current ratio
Acid-test ratio
Creditors average payment period
Debtors average collection period
Return on total capital employed
Debt/Equity ratio
Interest rate on loans
Gross profit on cost of sales
Gross profit on sales
Net profit on sales
Operating expenses on sales
Operating profit on sales
Gr 11 Telematics
2020
2019
14%
8%
4:1
13%
6%
5:1
0,5 : 1
30 days
100 days
32%
0,3 : 1
12%
42%
39%
7%
18%
13%
?
30 days
90 days
28%
0,5 : 1
13%
40%
29%
4%
32%
9%
19
Accounting 2021
ACTIVITY 3: WORK SHEET (Analysis & interpretation)
3.1
Calculate the acid test ratio for 2020
Workings
Answer
3.2
Comment on the liquidity of the partnership. Recommend THREE ways in which the liquidity of
the partnership can be improved.
3.3
If you were partner Tim, would you be satisfied with your return earned over the past two years?
Motivate your answer.
3.4
On which areas of the Statement of Comprehensive Income should the owners concentrate in
order to improve the profitability of the business? List TWO points and motivate your answer.
3.5
The partners are considering the expansion of the operations of the business. In order to do
this, they are considering taking out a large loan at an interest rate of 13% or admitting a new
partner into the business. Which of these two methods of financing do you advise for this
business. Explain in detail.
Gr 11 Telematics
20
Accounting 2021
LESSON 5: BUDGETING
BASELINE
ACTIVITY Differences between Cash Budget & Projected Statement of Comprehensive Income
The financial year-end of Carpets Galore Traders is 31 October 2021. Thembi Tsomi is the sole
owner.
REQUIRED:
Indicate amounts in the appropriate blocks for the Cash Budget and Projected Statement of
Comprehensive Income for three months ending 31 January 2021.
•
•
•
A printer costing R40 800 will be bought for cash on 30 November 2020. Depreciation will be
R680 per month.
On 1 January 2021, R48 000 will be paid for a 12-month insurance contract.
A loan of R100 000 will be received from Viva Bank on 31 December 2020. This will be repaid in
equal instalments over 20 months, commencing on 31 January 2021. Interest at 12% p.a. is paid
monthly and is not capitalised.
BASELINE ACTIVITY: WORK SHEET
CASH BUDGET
Nov. 2020
Dec. 2020
PROJECTED STATEMENT OF
COMPREHENSIVE INCOME
Jan. 2021
Nov. 2020
Dec. 2020
Jan. 2021
Printer bought
Depreciation
Insurance
Loan received
Loan repayments
Interest
Gr 11 Telematics
21
Accounting 2021
ACTIVITY 1 (Cash Budgets)
You are provided with the Cash Budget of Zizi Traders for the three months ended 31 December 2019. The
owner is Emmalee Zizi.
INFORMATION
EXTRACT FROM CASH BUDGET
2019
October
EXPECTED RECEIPTS
Cash sales (75% of total sales)
Debtors (30 days less 5%)
Rent income
Interest on fixed deposit
Capital
2019
November
2019
December
225 000
47 500
9 000
112 500
?
?
?
150 000
112 500
35 625
?
?
291 000
355 000
158 245
17 500
4 000
12 500
4 000
60 000
?
12 500
4 000
EXPECTED PAYMENTS
Drawings
Motor vehicle expenses
Fixed deposit
Deposit on vehicle purchased
Monthly repayments to East Bank
Interest paid to East Bank
Salaries and wages
Cash surplus/-deficit
Cash at the beginning of the month
Cash at the end of the month
105 000
109 200
?
?
109 200
240 000
310 000
390 000
51 000
72 000
45 000
A
C
D
123 000
B
E
ACTIVITY 1: WORK SHEET (Cash Budgets)
1.1
Explain why a business needs to prepare a Cash Budget every year.
1.2
Calculate the expected receipts from debtors for November 2019
Workings
Gr 11 Telematics
Answer
22
Accounting 2021
1.3
Calculate the figures in the budget denoted by letters:
Answer
A
B
C
D
E
1.4
The rent income was increased by 8% from 1 November 2019.
Calculate the rent income for November 2019.
Workings
Answer
1.5
In your opinion, is Emmalee’s capital contribution in November enough to support
this business venture? Provide ONE reason with figures to support your answer
1.6
Refer to the Salaries and wages in the Cash Budget.
Calculate the percentage increase granted to the employees from 1 November 2019.
Workings
Answer
In your opinion, will the employees be satisfied with this increase? Briefly explain
Gr 11 Telematics
23
Accounting 2021
1.7
As the internal auditor you discovered that the actual motor vehicle expenses for
December 2019 were R5 420. Provide TWO points that you would include in your internal
auditor’s report to Emmalee.
A new vehicle will be purchased for R139 500 on 30 November 2019. The business will pay a
deposit of 20% and the balance will be financed by East Bank. Emmalee will repay the capital
portion to East Bank in equal monthly instalments over three years from 30 December 2019.
Interest will be paid monthly to East Bank on the outstanding balance at a rate of 11% p.a.
1.8
Calculate the interest payable to East Bank in December 2019.
Workings
Answer
Calculate the monthly repayments of the capital portion of the loan to East Bank
Gr 11 Telematics
24
Accounting 2021
ACTIVITY 2 PROJECTED STATEMENT OF COMPREHENSIVE INCOME
The incomplete Projected Statement of Comprehensive Income of Bobby Traders for the three months
ended 31 December 2020 is presented below.
REQUIRED
Calculate the following missing information in the Projected Statement of Comprehensive Income:
2.1
Expected sales in December 2020
2.2
Gross profit % on turnover for October 2020.
2.3
% increase in rent income
2.4
% commission expected to be received each month.
2.5
Amount of the loan that will be repaid on 1 December 2020.
INFORMATION
A.
ABRIDGED PROJECTED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTHS
ENDED 31 DECEMBER 2020
OCTOBER
Sales
NOVEMBER
DECEMBER
98 000
102 900
Cost of Sales
(78 400)
(82 320)
Gross profit
19 600
20 580
Other operating Income
12 220
12 465
6 500
820
6 500
820
Commission income
5 880
6 174
Gross operating income
31 820
33 045
9 600
9 600
800
800
Bad debts
1 800
1 960
Telephone
3 300
3 300
3 300
Sundry expenses
1 250
1 260
1 270
(2 500)
(2 500)
(2 000)
Rent income
Discount received
7 280
820
38 970
Operating expenses
Salaries & wages
Insurance
800
Depreciation
Operating profit
Interest on loan
Net profit (Loss)
B.
C.
All sales are on credit. December sales are expected to increase by 25% on the November
budgeted sales figure.
Commission income is estimated at a fixed percentage of the budgeted sales.
D
Interest on loan (not capitalised) at 10% p.a. is paid at the end of each month.
Gr 11 Telematics
25
Accounting 2021
ACTIVITY 2: WORK SHEET BUDGETING
Calculate the figures in the Projected Statement of Comprehensive income
2.1
Expected sales in December 2020
2.2
Gross profit % on turnover for October 2020.
2.3
% increase in rent income
2.4
% commission expected to be received each month.
2.5
Amount of the loan that will be repaid on 1 December 2020.
Gr 11 Telematics
26
Answer
Accounting 2021