UNIVERSITY OF LIMPOPO
FACULTY OF MANAGEMENT AND LAW
SCHOOL OF ACCOUNTANCY
DEPARTMENT OF FINANCIAL ACCOUNTING
DEGREE AND DIPLOMA EXAMINATION
MAY/JUNE: 2022
MODULE:
PAPER:
CACA001
P1
(INTRODUCTION TO FINANCIAL ACCOUNTING)
TIME:
2.5
MARKS:
INTERNAL EXAMINER:
MR KM MOSWATSI
INTERNAL MODERATOR:
MS A PARKER CA (SA)
100
THIS PAPER CONSISTS OF …8…PAGES INCLUDING COVER PAGE AND SPECIAL
ANSWERSHEET
INSTRUCTIONS:
1.
2.
3.
4.
5.
Answer all the questions
Write neatly and legibly
The test must be handwritten on lined paper with black pen.
Round all figures to the nearest Rand
Number questions correctly
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
Question 1
(15.5 Marks – 23 Minutes)
Part A
(7.5 marks – 11 minutes)
Mr Fats Makhananisa is a successful entrepreneur who is the sole shareholder (owner) of a
private company by the name of Tsodio Traders. Today 5 March 2022, you are informed by Mr
Fats that Tsodio Traders purchased a furnished mansion in Thabazimbi on 1 January 2022 for
R25 000 000. Since 1 February 2022, Tsodio Traders has been renting out the property to
travellers at R25 000 per night.
Required:
Mr Fats Makhananisa would like to know whether the purchased property (furnished mansion)
can be regarded as an asset or liability for Tsodio Traders (Discuss, using the definitions in the
Conceptual Framework).
(7.5 Marks)
Part B
(8 marks – 12 minutes)
Your friend, Jack, has recently started his first job as an accountant after having successfully
completed his studies. You invite him for lunch to find out how his new job is going. He replies as
follows:
It’s great! My manager is always giving me more work, but in the mornings, he usually attends
meetings with the other managers. So, then I have my time to myself. I usually phone my sister,
who recently immigrated to Australia, from the work phone in that time. It’s great that I have my
own office and my own phone! And I really save a lot of time and money by making the calls from
work. Those international calls can really add up!
Required:
Discuss whether Jack is exercising good business ethics at work. Support your argument with
examples from the case study. Also, make recommendations where appropriate. (10 marks)
Page 2
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
(26 Marks – 39 Minutes)
Question 2
Lebeth Traders commenced with activities on 2 January 2021. Lebeth Traders uses the perpetual
inventory system to account for trade inventories. The dual effect on the accounting equation in
respect of transactions for January 2021 have been recognised and the accounting equation was
as follows on 31 January 2021.
Transaction
Assets
=
Liabilities
+
Equity
Total 31 January 2021
3 020 000
=
20 000
+
3 000 000
During February 2021, Lebeth Traders incurred the following transactions:
1. On 2 February 2021, the owner deposited an additional R200 000 in Lebeth Trader’s bank
account as an increase in capital.
2. On 3 February 2021, trade inventories to the amount of R145 000 were ordered and it was
agreed with Figo Traders that the amount due will be paid within 30 days after delivery of
the trade inventories. On 5 February 2021, Figo Traders delivered the trade inventories to
Lebeth Traders premises.
3. Trade inventories to the amount of R60 000 were ordered on 4 February 2021 and it was
agreed with the supplier that payment would occur with delivery (COD). ON 6 February
2021, the supplier delivered the trade inventories to Lebeth Trader’s premises.
4. On 23 February 2021, trade inventories were sold on credit to a selected customer, Thabo
Traders, for R96 000. The trade inventories were delivered to Thabo Traders on the same
day, and it was agreed that the amount due must be paid within 30 days after delivery. The
cost price of the trade inventories sold is R48 000.
5. On 24 February 2021 a payment of R145 000 was made to Figo Traders, being the amount
due in respect of trade inventories purchased on credit on 5 February 2021.
6. On 24 February 2021, trade inventories were sold for R64 000 cash and delivered on the
same day. The cost price of the trade inventories sold is R32 000.
7. Gross salaries to the amount of R15 000 was paid on 28 February 2021.
8. On 28 February 2021, the owner of Lebeth Traders withdrawn R12 000 cash for his
personal use.
Required:
a) Indicate the dual effect of the abovementioned transactions for the month ended 28
February 2021 on the accounting equation. (N.B USE THE PROVIDED ANSWER
SHEET).
(26 marks)
Page 3
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
(36.5 Mark – 55 Minutes)
Question 3
The following information is given for Michelle Traders, a registered VAT vendor. VAT rate is
15%:
No
Cost price
A
R?
B
Mark-up
Selling price
(excluding VAT)
VAT
Selling price
(including VAT)
40% on cost price
R?
R834
R?
R?
35% on cost price
R3 500
R?
R?
C
R?
35% on selling price
R?
R?
R11 132
D
R5 000
? % On selling price
? % On cost price
R7 500
R?
R?
E
R4 600
40% on selling price
R?
R?
R?
Required:
Calculate the missing amounts in the table above”?” (SHOW YOUR CALCULATIONS
OUTSIDE YOUR TABLE)
(36.5 marks)
Page 4
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
(22 Marks – 33 Minutes)
Question 4
The following PRE – Adjustment trial balance was prepared from the records of Chakala
Traders for the year ended 31 December 2021:
Debit
Land and buildings
Credit
100 000
Furniture
20 000
Vehicles
30 000
Accumulated depreciation: Furniture
5 000
Vehicles
8 000
Sales
500 000
Purchases
300 000
Inventories 1 January 2021
120 000
Sales returns
5 000
Delivery costs
17 500
Rent income
20 000
Interest income
2 000
Interest expense
3 000
Loan
60 000
Salaries and wages
18 000
Water and electricity
6 000
Sundry expenses
11 000
Drawings
24 000
Credit losses expenses
2 000
Receivables
51 000
Payables
36 000
Bank
8 000
Capital
84 500
R715 500
R715 500
Additional information:
1. On 31 December 2021, inventories amounted to R130 000, and they are measured on a
first-in-first-out method using periodic inventory system.
2. On 1 January 2021, Chakala Traders taken out a loan amounting to R60 000. Interest on
loan is calculated at 5% per year. The loan is secured by land and building and is
repayable at R10 000 per year in arrears. The first instalment is payable on 31 December
2021.
Page 5
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
3. Property, plant, and equipment
a) The buildings are occupied for the purposes of the activities of the entity and are
accounted for in terms of the cost model. The value of the buildings was R30 000,
and the land is R70 000 at the date of purchase, 1 January 2021.
b) Depreciations for the year are as follows:

Buildings at 3% per year amounted to R900.

Furniture at 6% per year amounted to R1 200.

Vehicles at 10% per year R2 200.
4. The trade receivables amounting to R5 000 must be written off as they are irrecoverable.
Required:
a) Prepare the statement of profit or loss for Chakala Traders for the year ended 31
December 2021.
(12 marks)
b) Prepare the statement of financial position for Chakala Traders as at 31 December 2021.
(10 marks)
Page 6
CACA 001 – MAY/JUNE 2022 – MAIN EXAMINATION QUESTION PAPER
Question 2 Answer Sheet
Student number…………………………. Surname and initials…………………………………..
Date
Account to Debit
F/S
Account to Credit
Page 7
F/S
Assets
Equity
Liabilities