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Directorate: Curriculum FET

ACCOUNTING

PREPARATION FOR GRADE 10

2 Accounting: Preparation for Grade 10

Dear Accounting Learner

Congratulations on choosing Accounting as one of your Grade 10 subjects.

Your subject choice will no doubt open doors for you. With this subject you will be equipped with

valuable skills which include:

orderliness thoroughness meticulousness accuracy financial literacy ethical behaviour sound judgement organisation critical, logical and analytical abilities neatness

You will learn skills that will prepare you for life, skills that you will be able to apply in any career

and very importantly in your own personal life.

This is an exciting, interesting and dynamic subject. Decide today, right now to enjoy this subject

and even better, to love it!

You will need to work regularly, every day; at this subject and I can assure you that if you are

prepared to work diligently you will enjoy success.

Enjoy this course that has been specially designed for you to prepare you for Grade 10 next year.

Have fun.

“PASSION + VISION + ACTION is the equation for success” by Marilyn King, US Olympic

Pentathlete.

Be passionate about Accounting, have a vision of what you would like to achieve with it and act

upon your passion and vision by working hard at the subject and you will succeed.

Dr GR Schreuder

Senior Curriculum Planner: Accounting


MODULE 1: CONCEPTS AND ACCOUNTING CYCLE

In Accounting you will come across terminology relating to a business. It is very important that you

understand these basic concepts.

In your workbook there are two activities that will assess your understanding of basic accounting

concepts and terminology.

Complete Activities 1.1 and 1.2 in your workbook.

The Accounting Cycle

Step 2:

Source documents

Step 1:

Transactions

Step 3:

Journals

Step 4:

Ledgers

Step 5:

Trial Balance

Step 6:

Financial Statements


MODULE 2:

THE ACCOUNTING EQUATION

ASSETS = OWNER’S EQUITY + LIABILITIES

CLASSIFICATION OF ACCOUNTS

ASSETS

Fixed assets Financial assets Current assets

Land and buildings Equipment Vehicles

Fixed deposits/Investments

Trading stock Debtors’ control Bank Cash float Petty cash Savings account Accrued income (still to be

dealt with) Prepaid expenses (still to be

dealt with) Consumable stores on hand

(still to be dealt with)

LIABILITIES

Non-current liabilities Current liabilities

Loans (> 12 months) Creditors’ control Bank overdraft Loans (< 12 months) Accrued expenses (still to be dealt with) Income received in advance (still to be dealt

with)

OWNERS EQUITY

Drawings Capital

Expenses Income

Cost of sales Rent expense Salaries and wages Stationery Rates Insurance Water and electricity Advertising Bank charges Telephone Repairs Packing material Interest on bank overdraft Donations Interest on loan

Sales Current income Rent income Commission received Interest on current bank account Interest on savings account Interest on fixed deposit


ACCOUNTING PRINCIPLES

Dr ASSETS Cr Dr LIABILITIES Cr

Balance b/d X

+

-

-

Balance b/d X

+

Dr OWNERS EQUITY Cr

-

(Expenses decrease Owners Equity)

Balance b/d X

+

(Income increases Owners Equity)

Steps when analysing transactions according to the Accounting Equation

1. Identify the accounts 2. Classify the accounts 3. Analyse the effect on the accounting equation by applying the Accounting principles.

The expanded accounting equation

Owner’s equity = Capital – Drawings + Income – Expenses

Therefore Assets = (Capital – Drawings + Income – Expenses) + Liabilities OR

Assets + Drawings + Expenses = Capital + Income + Liabilities

This expanded equation is very important for your studies in Accounting. It is important that you

understand this formula.


Activity 2.1

Enter the following transactions for June 2015 in the columns, indicating an increase with a ‘+’ and

a decrease with a ‘-‘: Total the columns.

Transactions for June 2015

2 Bought equipment from Tradeau Traders for R10 000 and paid by cheque.

3 The owner increased her capital by depositing R15 000 into the bank account of the business.

5 Paid for consumable stores purchased from Wonderful Wholesalers by cheque, R4 000.

8 Received fee income of R7 800 for services rendered.

12 Paid R6 500 to Winter Estates for rent of property.

18 Paid wages, R6 800

20 Donated a cheque to the value of R1 000 to the local high school.

22 Bought a vehicle for R105 000 and paid by cheque.

25 Received cash from customers for services rendered, R12 400 30 The owner cashed a cheque for his personal use, R5 000.


Activity 2.2

Lou Chang started a laundry business on 1 January 2015 called Lang Cleaners.

REQUIRED:

Record the transactions for September in the table provided in your workbook.

The totals at the end of August 2015 are as follows:

Assets Bank, R112 000 Equipment, R34 000

Expenses R132 000

Drawings R96 000

Liabilities Creditors, R4 000

Capital R150 000

Income R220 000

Transactions: September 2015

5 Issued a cheque to Fast Motors for a new vehicle purchased, R90 000.

7 Cashed a cheque to pay for wages, R1 600.

9 Issued receipts for fee income received from customers, R6 000.

11 Lou Chang cashed a cheque for personal use, R4 000.

15 Settled the account of one of the creditors, R2 000

17 Repairs done to equipment on credit, R3 400.


20 Cashed a cheque for wages, R1 600.

25 Issued a cheque for stationery bought, R800.

28 Issued a receipt to Lou Chang for capital contributed, R50 000.

29 Issued a cheque to Pelican Properties to pay for rent, R3 000.

Activity 2.3

Complete the table in your workbook by inserting the missing figures as denoted by an *.


DOUBLE ENTRY PRINCIPLE

Double Entry Principle

THE GENERAL LEDGER

Assets + Drawings + Expenses = Capital + Income + Liabilities: This formula forms the basis

of the General Ledger.

Assets, Drawings and Expense accounts increase on the debit side of the general ledger while

Capital, Income and Liability accounts increase on the credit side.

The General Ledger consists of three sections, viz. the Balance Sheet Accounts Section, the

Nominal Accounts Section and the Final Accounts Section.

Balance Sheet Accounts Section

Nominal Accounts Section Final Accounts Section (end of accounting period)

Capital Drawings Assets Liabilities

Income Expenses

Trading account Profit and loss

account

Dr. GENERAL LEDGER OF XXXXXX Cr.

Name of account Fol.

Date Details Fol Amount Date Details Fol Amount

For every debit entry there must be an equal and

corresponding credit entry.


Activity 2.4

Goofy Gardener started a gardening service business on 1 January 2015, called Goofy Gardening.

REQUIRED:

Open the general ledger accounts with the balances/totals on 1 November 2015. Enter the

transactions of Goofy Gardening for November 2015 in the General Ledger. Balance the balance

sheet accounts and total the nominal accounts on 30 November 2015.

The following balances/totals appeared in the General Ledger on 1 November 2015.

Assets Bank

R24 000 Savings R80 000 Equipment R68 000 Vehicles R140 000 Equity Capital R300 000 Drawings R52 000 Liabilities Creditors’ control R8 000 Income Interest income R20 000 Fee income R420 000 Expenses Wages R133 640 Insurance R12 800 Rent expense R36 000 Bank charges R1 960 Fuel R34 000 Motor vehicle expenses R45 600

Transactions – November 2015

2 Transferred R60 000 from the savings account to the current account.

6 Issued a cheque in favour of Best Motors for a new vehicle purchased, R175 000.

7 Cashed a cheque to pay wages, R3 200.


11 Issued a cheque for insurance premium, R2 400.

14 Goofy cashed a cheque for his personal use, R8 000. Cashed a cheque to pay wages, R3 200.

16 Settled a creditor’s account by cheque, R2 800.

18 Purchased equipment on credit from Power Tools and Hardware, R138 000.


19 Motor vehicle repairs done on credit by Perfect Motors, R4 800.


23 Issued receipt to Goofy for extra capital contributed, R220 000.

25 Issued a cheque to Penn Properties for monthly rent, R6 000.

27 Issued a cheque to Apex Garage for petrol, R1 400.


30 The bank statement reflected bank charges of R670 and interest on current account, R260.


Activity 2.5 You are provided with information relating to Yusuf’s Cellphone Repairs for the month of May 2015. REQUIRED: Analyse the following transactions by completing the table in your workbook. The first entry has been done for you as an example. 1. Paid wages by cheque, R1 500.

2. Bought paper for the office computer, R450 and paid for it by cheque.

3. Transferred R10 000 from Yusuf’s personal banking account to the bank account of the business.

4. Paid for insurance of the business equipment, R2 300.

5. Received R6 000 from clients for services rendered.

6. Paid Home Properties for rent of property, R4 000.

7. Bought equipment from Cell Warehouse and paid by cheque, R6 000.

8. Purchased consumable stores and paid by cheque, R8 300.

9. The owner paid his personal telephone account by cheque, R550.

10. Paid the business telephone account, R1 200.


TRADING BUSINESS: COST OF SALES CALCULATIONS

Cost Price: The amount the business pays for the goods.

Selling Price: The amount the business charges when the goods are sold.

Mark-up: The percentage the business adds to the cost price.

Cost of sales = Sales x 100 100 + mark-up% Sales = Cost of sales x 100 + mark-up% 100

Activity 2.6

REQUIRED:

Calculate the missing figures in the table below that are indicated by a ‘?’.

No. Cost price Profit mark up (%) Selling price

1 R3 000 ? R4 500

2 R3 000 150 ?

3 ? 80 R360

4 ? 20 R4 500

5 R1 800 33⅓ ?

6 R2 500 ? R7 500

7 R16,80 16 ?

8 R1 400 ? R1 680

9 R1 960 ? R2 450

10 R900 66⅔ ?


Activity 2.7 Martin Meyer is the owner of MM Superette. All merchandise is sold at a mark-up of 60% on cost price. The following balances/totals appeared in the General Ledger on 1 July 2015.

Capital R755 700 Drawings R15 000 Vehicles R196 500

Equipment R41 250 Trading stock R133 050 Bank (Cr.) R3 000

Cash float R750 Rent expense R120 000 Sales R241 200

Cost of sales R150 750 Salaries and wages R315 000 Stationery R27 600

REQUIRED: Open the general ledger accounts with the balances/totals on 1 July 2015. Enter the transactions

of MM Superette for July 2015 in the General Ledger. Balance the balance sheet accounts and

total the nominal accounts on 31 July 2015.

3 Cashed a cheque for R750 to increase the cash float. 4 Issued a cheque for R7 800 to Makro for a computer and printer. 6 Bought merchandise from Ray Wholesalers and issued a cheque for R78 000 less 10%

trade discount. Cashed a cheque to pay wages, R8 000. 10 Cash sales, R36 000. 12 Paid insurance to Metropolitan as follows:

On the owner’s private assets, R1 650 On the business assets, R7 000

15 The owner increased his capital by depositing R97 000 in the bank account of the business. 17 Bought stationery from PNA for R630 and paid by cheque. 20 Paid the following charges:

Water and electricity to the Municipality, R3 350 Telephone to Telkom, R2 150

24 Cash sales, R24 000. 26 Paid the salary of the manager, R13 200. 30 The owner cashed a cheque for his personal use, R9 000.


Activity 2.8 You are provided with information relating to Thabo’s Gold Shop for June 2015. REQUIRED: Analyse the following transactions by completing the table in your workbook. The first entry has been done for you as an example. 1 Thabo increased his capital contribution by depositing R100 000 in the bank account of the

business. 3 Thabo bought a vehicle and paid by cheque, R180 000. 5 Purchased merchandise from Excellent Wholesalers, R25 000. 8 Paid R350 by cheque for one advertisement in the local newspaper. 10 Sold goods for cash, R15 000 (cost price, R7 500) 12 Thabo cashed a cheque for his personal use, R2 000. 14 Paid wages by cheque, R12 600. 18 Purchased fuel from Diep River Motors, R850. 21 Received rent from a tenant, R4 800. 24 Sold goods for cash, R22 000 (Cost price, R11 000) 28 Paid Thabo’s gym membership fee, R600.


MODULE 3: CASH TRANSACTIONS

Journals (also called subsidiary journals) are books of first entry.

It helps to organise transactions in different types (cash receipts and cash payments) and to

simplify the orderly transfer information to the next step in the accounting cycle.

The first few steps in the accounting cycle: transactions, source documents, journals and ledger.

® Cash Receipts Journal: to record all cash received

® Cash Payments Journal: to record all cash payments

Documents used in cash transactions by the business:

® Original Receipt: issued when cash is received for goods or services.

® Cheque: issued when a “cash” payment is made for goods or services

® Cash register slip: issued by the cashier for cash sales

® Deposit slip: to deposit cash and verify deposits

Source documents are used to record cash transactions in the books of the business:

® Duplicate receipt: to record cash received

® Cheque counterfoil: to record cash payments

® Cash register tape: to record cash sales

® Bank Statement: to record and verify electronic fund transfers (EFTs).

EXAMPLES OF SOURCE DOCUMENTS:

RECEIPT 001

……………….20….

Received from ………………………………………….

the sum of …………………………………………………………………….

For …………………………………………………………………………….

…………………………

for Cornel Stores


STANDARD BANK CREDIT:

5 0059 (V.2) Address:

/ /20

Please ensure that your account number is correctly

filled in as Standard Bank Ltd. cannot be held

responsible for errors resulting from in-correct

information furnished. Cheques etc. handed in for

collection will be available as cash after payment.

While acting in good faith and exercising reasonable

care, Standard Bank Ltd. will not accept responsibility

for ensuring that depositors / account holders lawful title

to cheques etc. collected.

Note

Nikkel

Bronzes

Postal orders

Total cash

Drawer’s name

Branch clearing number

1. 2. 4.

Paid in by

Account number

For Bank use only

Effects not cleared

Total

______________20__

TO

__________________

__________________

FOR

_________________

__________________

R

001

32-87-41-64

Standard Bank

Parow Branch

Date ____________________20____

Pay _________________________________________ or Bearer

R_____________________________________________________

______________________________________

___________________

THEMBI STORES

001 3456789012

CHEQUE ACCOUNT DEPOSIT

Teller’s date

stamp and

signature


CASH RECEIPTS JOURNAL OF ABEL TRADERS – MAY 2015 CRJ5

Doc

no

Day Details Fol Analysis of

receipts

Bank Sales Cost of

sales

SUNDRY ACCOUNTS

Amount Fol Details

CRR 15 Sales 350 00 350 00 350 00 200 00

CRR 25 Sales 840 00 840 00 840 00 480 00

CRR 30 Sales 315 00 315 00 180 00

01 Alma Smit 10 000 00 10 315 00 10 000 00 B1 Capital

11 505 00 1 505 00 860 00 10 000 00

B3 N1 B2/N2

WHAT DOES THIS JOURNAL TELL US?

Money was received.

WHAT IS THE MAIN COLUMN CALLED?

Bank

WHAT HAPPENS TO THIS ACCOUNT (MAIN

COLUMN)?

The money in the bank increases

WHAT TYPE OF ACCOUNT IS BANK?

An Asset

WHAT IS THE RULE FOR ASSETS?

It increases on the debit side and decreases on

the credit side

JINGLE: BANK IS DEBITED (with the words

“Total receipts’) AND THE REST IS CREDITED

(with the word ‘Bank’),

EXCEPT COST OF SALES!!!!

COST OF SALES HAS ITS OWN JINGLE…

COST OF SALES AND TRADING STOCK ALWAYS GOES TOGETHER (BFF’S)!!

WE ALWAYS REASON FROM THE POINT OF VIEW OF WHAT IS HAPPENING TO TRADING

STOCK

WHAT DOES THIS JOURNAL TELL US AGAIN?

Money was received. In this case, we received money for Trading stock sold.

WHAT HAPPENS TO TRADING STOCK IF WE SOLD SOME OF IT?

Trading Stock decreases.

WHAT TYPE OF AN ACCOUNT IS TRADING STOCK?

An Asset


It increases on the debit side and

decreases on the credit side

JINGLE: Trading stock is credited (decreases) and Cost of Sales (its best friend) is debited (the

opposite is done in the contra account-best friend account).

Dr(+) TRADING STOCK B.. Cr(-)

860

Dr(-) COST OF SALES N.. Cr(+)

860


CASH PAYMENTS JOURNAL OF ABEL TRADERS – MAY 2015 CPJ5

Doc

no

Day Details Fol Bank Stationery Trading

stock

SUNDRY ACCOUNTS

Amount Fol Details

12 10 B&B Books 350 00 350 00

13 14 XYZ Stores 1 500 00 1 500 00

14 17 Telkom 550 00 550 00 N4 Telephone

15 22 Fine Foods 900 00 900 00

3 300 00 350 00 2 400 00 550 00

B3 N3 B2

WHAT DOES THIS JOURNAL TELL US?

Money was paid. The business spent money.

WHAT IS THE MAIN COLUMN CALLED?

Bank

WHAT HAPPENS TO THIS ACCOUNT (MAIN COLUMN)?

The money in the bank decreases – becomes less.

WHAT TYPE OF ACCOUNT IS BANK?

An Asset


It increases on the debit side and decreases on the credit side

JINGLE: BANK IS CREDITED (with the words: “Total payments”) AND THE REST IS DEBITED (with the word “Bank”).


. Activity 3.1

You are provided with information relating to Purdon Tyre Shop for the month of September 2015. REQUIRED: Analyse the following transactions in your workbook. The first entry has been done for you as an example. 01 Paid the wages by cheque, R3 250. 03 The owner increased his capital contribution from R130 000 to R175 000 and received a receipt from the bookkeeper. 04 Sold goods according to the cash register roll, R3 000. Profit mark-up on cost price was 50 %. 06 Paid the office rent of R4 050. 11 Paid the telephone account to Telkom, R4 500. 13 Placed an advertisement in Country Post and pay, R427 by cheque. 17 Bought goods from Audrey Suppliers, R3 700, as well as equipment to the amount of R1 800. 19 Issued a cheque to Dean Repairs for repair work to equipment, R2 500. 20 Cashed a cheque for cash float, R550. 21 Bought an invoice book and other necessities at Paper & Books, R345 and paid by cheque. 25 Paid the water and electricity account to the municipality, R3 283. R1 904 was for the water and electricity account of the business and the rest was for the owner’s home. 28 Issued a receipt to A van Vuuren for rent of part of the building, R4 800.


Activity 3.2

Mary Mürtz is the owner of Mürtz Stores. During April 2015 the following transactions took place: REQUIRED:

Record the following transactions in the Cash Receipts Journal and Cash Payments Journal - Activity 3.2 in your workbook. You must cast the journals at the end of the month.

Transactions

April 2015

1 Cash sales of merchandise, R8 000 (cost price R6 000).

3 Mary Mürtz increased her capital contribution by paying R30 000 to the cashier. Issued

receipt 10.

5 Issued cheque 37 to Total Insurers for the annual insurance premium, R3 444.

6 Paid the weekly wages, R1 500.

15 Received a cheque from E Joubert, R4 800 for rent of offices in the building.

18 Issued a cheque to Suzaan Traders for the following: trading stock, R3 500; equipment,

R5 000 and stationery, R400.

27 The owner took R1 500 for personal use.


Activity 3.3

Talitha Stores sells their products at a mark-up of 25% on cost price.

REQUIRED:

3.3.1 Record the following transactions in the Cash Receipts Journal and Cash Payments Journal.

3.3.2 Post from the cash journals to the General Ledger.

Transactions – March 2015

1 Received R120 000 from the owner, Talitha Venter as her capital contribution. Issued receipt no. 001

5 Purchased a computer and filing cabinet from Anina Furnishers and paid by cheque no. 001, R9 000.

6 Purchased goods from Lianie Suppliers for R7 000 less 10% trade discount and paid by cheque.

8 Issued cheque for R300 to Mirrah Stationers for stationery purchased.

12 Sold goods for cash R2 500.

19 Purchased a second-hand delivery vehicle from Nettie Garage and paid by cheque, R34 000. Cash a cheque to pay wages, R750.

23 Purchased packing material from Pacmar Ltd for R200 and paid by cheque.

25 Received a cheque from X Factor Travel Agency for rent for the month, R2 500. Received cash for merchandise sold, R1 500.

28 Cashed a cheque to pay wages, R750.

31 Issued a cheque to City Treasurer to pay water and electricity, R400 and rates, R300.

Paid the salary of the manager, G Schreuder, R5 500.


Activity 3.4

You are provided with information relating to Larah Traders, owned by Larah Fernandez.

REQUIRED:

3.4.1 Use the information provided to post to the accounts in the General Ledger.

3.4.2 Prepare a Trial Balance on 31 May 2015.

Balances/Totals on 1 May 2015

Capital R75 000 Drawings R23 500

Trading stock R15 800

Bank R50 100 Sales R72 000

Cost of sales R57 600

CASH RECEIPTS JOURNAL OF LARAH TRADERS - MAY 2015 CRJ 5

Doc.

No. D Details

F

Analysis

of Receipts Bank Sales

Cost

Of

Sales

Sundry Accounts

Amount Fol Details

121 1 Larah Fernandez 140 000 140 000 140 000 Capital

CRT

11 16 Sales/Cash 9 600 9 600 9 600 7 680

CRT

12 27 Sales/Cash 2 400 2 400 1 920

122 Capricorn Traders 5 000 7 400 5 000 Rent income

157 000 12 000 9 600 145 000


CASH PAYMENTS JOURNAL OF LARAH TRADERS - MAY 2015 CPJ 5

Doc D Details F Bank Trading

Stock Wages Stationery

Sundry Accounts

Amount Fol Details

181 5 Cash 8 000 8 000

182 12 Leo Traders 8 000 8 000

183 Virgo Transport 6 540 6 540

184 24 Eskom 2 120 1 400 Water and electricity

720 Drawings

185 29 Pisces Motors 65 000 65 000 Vehicles

186 30 M Moon 7 600 7 600 Salaries

Mill Stationers 548 548

97 808 14 540 8 000 548 74 720

23 Accounting: Preparation for Grade 10 – Training Manual

MODULE 4: CREDIT TRANSACTIONS Credit transaction: the exchange of goods or services where the payment is postponed to a

date in the future. Debtor: The customer/ person TO whom the business sells goods or services on credit. Creditor: The person / business / supplier FROM whom the business purchases goods or

services on credit. Source documents and Journals used to record credit transactions

Debtors

Source documents Journals Type of transaction

Duplicate invoice Debtors Journal Credit sales

Duplicate receipt Cash Receipts Journal Payments received from debtors

Duplicate Credit Note Debtors Allowances Journal Returns from and allowances to debtors

Creditors

Source documents Journals Type of transaction

Original Invoice Creditors Journal Credit purchases

Cheque counterfoil Cash Payments Journal Payments made to creditors

Dupliate debit note/

Original credit note

Creditors Allowances Journal

Returns to and allowances from creditors

General Ledger

Debtors' Control account: records the total owing by debtors

Creditors' Control account: records the total owing to creditors

Subsidiary Ledgers

Debtors' Ledger: a collection of the individual accounts of the debtors. The sum of the final balances of the individual debtors equals the balance of the Debtors' control account. Final balances of each debtor is captured in a Debtors List.

Creditors' Ledger: a collection of the individual accounts of the creditors. The sum of the balances of the individual creditors equals the balance of the Creditors' control account. Final balances of each ceditor is captured in a Creditors' list.


Activity 4.1: Analysis of transactions

You are provided with transactions from the books of Kenyon Stores for October 2015. Analyse these transactions according to the columns provided. Example: Bought stationery from PNA and paid R500 by cheque. TRANSACTIONS: 1. Purchased goods on credit from Sharks Traders for R3 000. 2. Received a cheque from B. Bull, a debtor, in full settlement of his account of R600. 3. Merchandise sold on credit to Y. Tale, R2 400. The business uses a profit mark-up of 33 ⅓

% on cost. 4. Y. Tale claimed an allowance for an overcharge on the credit sales, R200. 5. Returned goods not according to order to Sharks Traders, R900. 6. Issued a cheque to Whale Stores, a creditor, for payment on their account, R5 800.


Activity 4.2: Journals

Lucky Star owns a business, Lucky Traders, that buys and sells household appliances. They sell merchandise for cash and on credit and use a profit mark up of 25% on cost price. Debtors' and Creditors' List on 1 March 2015:

Debtors Creditors

S. Sardien R3 450 Bocom Wholesalers R8 250 H. Harder R2 890 Prawn Traders R4 500 REQUIRED:

4.2.1 Record the following transactions in the DJ, DAJ, CRJ, CJ, CAJ, CPJ. Use the journals provided for Activity 4.2 in the work book.

4.2.2 Close off the journals at the end of the month. TRANSACTIONS for March 2015 3 Purchased trading stock, R2 400 on credit from Bocom Wholesalers. Received invoice

A533 (renumbered 113) together with the consignment. 5 Trading stock not according to order, was returned to Bocom Wholesalers, together with a

debit note for R300. Bocom Wholesalers issued a credit note no CN56 (renumbered 42). 6 Bought consumable stores, R320 and trading stock, R2 120 from Bocom Wholesalers and

paid by cheque no. 345. These goods are subject to 10% cash discount. 7 Sold goods on credit to S. Sardien, R1 525. Issued invoice 201. 8 Received invoice 908 from Prawn Traders for consumable stores, R470. 10 Cash a cheque to pay wages, R8 200.

S. Sardien claimed an allowance for damaged items, R125. Sardien agreed to keep the items. Issued credit note no 54 to him.

13 Issued an invoice to H. Harder for goods sold to her, R840.

Returned consumable stores, R150 to Prawn Traders, together with a debit note. Prawn Traders confirmed these returns by issuing credit note BN891.

14 Received a cheque from H. Harder to settle her account as on 1 March 2015. Issued

receipt no 37. 16 The owner increased his capital from R55 000 to R80 000. Issued a receipt.


18 Paid Bocom Wholesalers R900 by cheque in part payment of our account. 19 Issued cheque to Prawn Traders to settle the amount owing to date

Sold goods for cash to H. Harder, R600. (CRT 9) 22 Purchased a new cash register on credit from Bocom Wholesalers for R6 500, subject to a

trade discount of 5%. 27 Bought the following on credit from Prawn Traders:

merchandise, R1 200 consumable stores, R800.

28 S. Sardien paid R1 200 in part payment of his account.

Received a cheque from K Powell for office space let to him for the month. Annual rental amounts to R36 000.

30 H. Harder purchased goods to the value of R1 800 on credit.

Paid electricity by cheque to the municipality, R650. 31 H. Harder returned damaged items, R400. Issued a credit note to her.


Activity 4.3: Post to Ledgers; Trial Balance

The information below relates to Sushi Traders, who buy and sell for cash and on credit. REQUIRED:

4.3.1 Use the relevant information from the journals below to post to the accounts in the General, Debtors' and Creditors' Ledgers. Balance or close off all the accounts in the General Ledger.

4.3.2 Prepare a Trial Balance on 30 April 2015. INFORMATION

The following journals were taken from the books of Sushi Traders after their first month of trading.

Cash Receipts Journal of Sushi Traders – April 2015 CRJ1

Doc no

D Details Fol Analysis of

Receipts

Bank Debtors Control

Sales Cost of Sales

Sundry Accounts

Amount Fol Details

001 1 Mr Nigiri 200 000 200 000 200 000 Capital

CRT1 6 Sales 6 960 6 960 4 640

002 S. Rose 750 7 710 750

003 12 Mr Nigiri 70 000 70 000 70 000 Capital

CRT2 14 Sales 18 160 18 160 18 160 12 107

CRT3 22 Sales 5 360 5 360 5 360 3 573

004 26 H. Meyer 2 300 2 300

005 Rita Estates 8 000 10 300 8 000 Rent Income

311 530 3 050 30 480 20 320 278 000

Debtors Journal of Sushi Traders – April 2015 DJ1

Doc no

D Details Fol Sales Cost of Sales

01 4 S. Rose 1 470 980

02 16 H. Meyer 1 565 1 043

03 25 H. Meyer 1 452 968

4 487 2 991

Debtors Allowances Journal of Sushi Traders – April 2015 DAJ1

Doc no

D Details Fol Debtors Allowances

Cost of Sales

C1 10 S. Rose 244 163

C2 18 H. Meyer 345 230

589 393


Cash Payments Journal of Sushi Traders – April 2015 CPJ1

Doc no

D Name of Payee Fol Bank Trading Stock

Wages Creditors Control

Sundry Accounts

Amount Fol Details

0001 1 Gordon Traders 8 900 8 900 Equipment

0002 2 PD Wholesalers 12 100 12 100

0003 5 Municipality 850 850 Rates

0004 10 Shaun Traders 2 400 2 400

0005 16 Safe Insurance 2 650 1 450 Insurance

1 200 Drawings

0006 Cash 9 800 9 800

0007 22 Snowy Traders 600 600 Stationery

0008 24 Cash 9 800 9 800

0009 26 AB Stores 5 152 5 152

0010 28 Waqa Stores 1 932 1 932

0011 30 MJ Simba 12 600 12 600 Salaries

0012 Municipality 3 890 3 890 Electricity

0013 Terry Traders 3 440 3 440

74 114 20 692 19 600 4 332 29 490

Creditors’ Journal of Sushi Traders – April 2015 CJ1

Doc no D Details Fol Creditors’

control Trading Stock

Stationery Sundry Accounts

Amount Fol Details

N1 8 Shaun Traders 4070 4070

N2 13 Waqa Stores 2 176 2 176

N3 21 Gordon Traders 4 200 4 200 Equipment

N4 24 Waqa Stores 300 300

10 746 6 246 300 4 200

Creditors’ Allowances Journal of Sushi Traders – April 2015 CAJ1

Doc no D Details Fol Creditors’

control Trading Stock

Stationery Sundry Accounts

Amount Fol Details

E1 11 Shaun Traders 104 104

E2 29 Waqa Stores 40 40

144 104 40


Activity 4.4: Posting to selected General Ledger accounts

REQUIRED

Use the given information to post to the following accounts in the General Ledger of Eddy Traders.

Close off the accounts in the balance sheet section.

Balances on 1 May 2015:

Trading Stock B6 10 500

Debtors' Control B7 6 250

Creditors' Control B8 8 440

Sales N1 13 230

Cost of Sales N2 8 820

Debtors' Allowances N3 2 300

Stationery N4 800

Note: Goods are sold at cost plus 50%. The following totals appeared in the journals as on 31 May 2015:

Cash Receipts Journal of Eddy Traders – May 2015 CRJ 10 Bank Sales Cost of Sales Debtors control Sundry accounts

R14 600 R4 500 ? R2 190 R7 910

Cash Payments Journal of Eddy Traders – May 2015 CPJ 10 Bank Trading Stock Stationery Creditors control Wages

R14 600 ? R240 R7 500 R2 400

Debtors Journal of Eddy Traders – May 2015 DJ 10 Sales Cost of sales

? R2 100

Debtors Allowances Journal of Eddy Traders – May 2015 DAJ 10 Debtors Allowances Cost of sales

R780 ?

Creditors Journal of Eddy Traders – May 2015 CJ 10 Creditors Control Trading Stock Stationery Sundry Accounts

? R5 000 R350 R2 450

Creditors Allowances Journal of Eddy Traders – May 2015 CAJ 10 Creditors Control Trading Stock Stationery Sundry Accounts

R1 415 ? 90 R475


Activity 4.5: Final assessment

You are provided with information relating to Easy Traders for July 2015. REQUIRED: Analyse the following transactions by completing the table in Activity 4.5 in your workbook. The first entry has been done for you as an example. 1. Paid the telephone account to Telkom, R2 800.

2. Bought stock on credit from PT Traders, R24 000.

3. Cash sales amounted to R18 000. (Cost of sales, R9 000)

4. Returned unsatisfactory goods to PT Traders, R1 300.

5. D. Dean bought goods on credit from Easy Traders for R3 600. A mark up of 20% on cost applied to these goods.

6. Paid R8 300 to PT Traders as part payment on their account.

7. D. Dean returned goods with which he is dissatisfied, R120. See transaction no. 5.

8. Paid R240 000 to Moby Motors for a new delivery vehicle.

9. Received a cheque from D. Dean in settlement of his account.