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NAMIBIA SENIOR SECONDARY CERTIFICATE

ACCOUNTING HIGHER LEVEL 8335/2PAPER2 2hours30minutes

Marks150 2013

AdditionalMaterials:Non-programmablecalculator

Thisdocumentconsistsof18printedpagesand2blankpages.

Republic of NamibiaMINISTRY OF EDUCATION

[Turn over©MoE/DNEA

For Examiner’s Use

1 2 3 4 5 6 Total

8335/2/13

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• Youmayuseanon-programmablecalculator.• Wherelayoutsaretobecompleted,youmaynotneedallthelinesforyour

answer.• Thebusinessesmentionedinthispaperareentirelyfictitious.HIGHER LEVEL

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1 K&NDistributorsCCisaclosecorporationownedbyAKlemensandSNegonga.

Information for the year ended 31 July 2013. N$ Members’contribution 650000 LoantoSNegonga 55000 ReceiverofRevenue(cr) 24000 DistributionPayabletomembers 124000 Netprofitbeforetax 180000

Transactions during the year

1. PaidtheamountowingtotheReceiverofRevenuebycheque.

2. AKlemenstransferredhispersonalvehiclevaluedatN$80000tothebusinessandrequestedthatitshouldberegardedasanincreaseofhismember’scontribution.SNegongaagreedtothiscontribution.

3. AKlemensprovidedaccountingservicesofN$12000onbehalfoftheCC.Itisagreedtotreatthisserviceasaloan.

4. SNegongarequestedthathismember’scontributionbedecreasedtosettlehisloanfromthebusinessinfull.

5. Paidthedistributionofthenetprofitowingtothemembersbycheque.

6. PaidprovisionaltaxN$35000percheque.

7. ThetotalamountfortheincometaxfortheyearamountstoN$88000.

8. Themembersdecidedtodistribute60%ofthenetprofitaftertaxamongstthemselves.

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REQUIRED

(a) Inthetablebelow,showthedoubleentryforeachtransaction1to8.

No. Account Debited Account Credited Amount

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(b) Explainwhybusinessesprefertobeclosecorporationsratherthanpartnerships?

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(c) ACloseCorporationhasanAppropriationaccountaspartofitsfinancialstatements.OutlinefourdifferencesbetweenaCloseCorporation’sAppropriationaccountandthatofaPartnership.

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Question2onpage6

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2 DesertDesign,aretailer,hasrecentlyappointedanewbookkeeper.Sheascertainedthatsomeadjustmentshavenotyetbeenprocessedandsomeerrorsweremade.

Thebookkeepercalculatedthenetprofitfortheyearended28February2013tobeN$360000buthasnottakenthefollowinginformationintoaccount.

1. TheFebruary2013bankstatementwasreceivedafterthebookkeeperhadcalculatedthenetprofit.Thefollowinghadnotbeentakenintoaccount:• InterestonoverdraftN$430• BankchargesN$250• RentincomeN$4500• Dishonouredcheque,N$2100.(Thischequehadoriginalbeen

receivedfromadebtorinsettlementofhisdebtofN$2210.)

2. TheprovisionfordoubtfuldebtshastobedecreasedfromN$7600toN$7350.

3. Goodsweredonatedtoalocalhighschool.ThesellingpriceofthegoodsisN$2880andtheprofitmark-up50%oncostprice.Thebookkeeperjournalisedtheentryasfollows:DebitDrawingsN$2880;CreditPurchasesN$2880.

4. 29February201228February2013

LoanfromWelwitchiaBank@15%p.a. N$250000 N$150000

On1September2012,N$100000waspaidoffontheloan. Afullyear’sinterestisoutstanding.

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REQUIRED

Correctthenetprofitfor28February2013afteralladjustmentsanderrorsweretakenintoaccount.

No Decrease in net profit

N$

Increase in net profit

N$ N$

Calculatednetprofit(28February2013) 360000

TotalsCorrectednetprofit

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3 TheCreditorsControlaccountandCreditors’ListofNamStoreswerepreparedbyaninexperiencedbookkeeper.Shecalculatedthefollowingfiguresattheendofthemonth:

CreditorsControlbalance,N$55670

Creditors’Listtotal,N$39240

REQUIRED

(a) Explainwhythesetwofiguresshouldagree.

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Aninvestigationrevealedthefollowing: 1. AnaddingerrorintheCreditors’Listresultedinthetotalbeingunder

castedbyN$480. 2. CreditpurchasesfromNCALtdforN$1960,wasleftoutofthebooks

inerror. 3. GoodsreturnedtoSWASuppliers,N$720,wereenteredcorrectlyinthe

CreditorsReturnsJournal,butwerepostedasN$270tothecreditor’saccountofSWASuppliers.

4. Thetotalpaymentstocreditors,N$8200,waspostedincorrectlytothecreditsideoftheCreditorsControlaccount.

REQUIRED

(b) Calculatetheamendedbalanceofthe

(i) CreditorsControlAccount.

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(ii) Creditor’sList.

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(c) StatefromwhichbookoffirstentrywillNamStoresobtaintherelevantfigureforeachofthefollowingitemswhichappearinitsCreditorsControlAccount.

(i) Creditpurchases..................................................................................

(ii) DiscountReceived................................................................................

(iii) InterestexpenseschargedbyCreditors...............................................

(iv)Returnsofgoodstocreditors................................................................ [4]

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4 Lukas,MartinandNevilleareinapartnershipsharingprofitsinthefollowingratio:Lukasonehalf,MartinonethirdandNevilleonesixth.

TheBalanceSheetofthepartnershipat30September2013isasfollows.

N$ N$ N$ N$CAPITAL EMPLOYEDCapital:LukasMartinNeville

1300006000042000232000

EMPLOYMENT OF CAPITALFixed Assets/Non-Current assetsLandandBuildingsPlantandMachineryVehicles

1500004200030000

222000

Net current assets 10000Current AssetsStock/InventoryDebtors/Tradereceivables18500Less:ProvisionforDoubtfulDebts600

25000

17900

42900

Less: Current LiabilitiesCreditors/TradepayablesBankOverdraft

1300019900

32900

232000

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On30September2013thepartnersagreedtodissolvetheirpartnershipandthefollowinginformationwasavailable:

1. Lukaswishedtocontinuetradingfromthepremisesonhisownbehalfandheagreedtotakeoversomeoftheassets,i.e.thelandandbuildings,revaluedatN$180000,theplantandmachineryrevaluedatN$35000andgoodwillwasagreedonN$10000.

2. Thethreepartnersweretoretaintheirindividualvehicles,whichwereformerlyregardedasthepartnership’sproperty.Theagreedvaluationsandthebookvalueswereasfollow:

Valuation Bookvalue N$ N$ Lukas 6500 8000 Martin 13000 12000 Neville 9000 10000

3. ThestockwassoldforN$18000.

4. DebtorsrealisedN$18300andcreditorsweresettledinfullpaymentofN$12700.

5. TheexpensesofdissolutionwereN$1200.

REQUIRED

Preparethefollowingaccounts

(a) Realisationaccount

(b) Capitalaccounts(incolumnarformat)

(c) Bankaccount

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(a) Realisation Account

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(b) Capital Accounts (in columnar format)

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(c) Bank Account

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5 YouareprovidedwithinformationinrespectofShipangaDealers,whoseownerisSebastiaanShipanga.

1.

Figures extracted from the books: 2012

Actual BudgetedSeptember October November December

Sales 162000 136800 147600 129600Purchases 90000 76000 82000 90000Salaries(onemanager) 19000 19000Wages(twoshopassistants) 20000 20000

2. 25%ofallsalesareforcashand75%areoncredit.Itisexpectedthatdebtorswillsettletheiraccountsasfollows:• 60%willsettleinthemonthfollowingthetransactionmonth,• 36%willsettleinthesecondmonthfollowingthetransactionmonth,• 4%willbewrittenoff.

3. Allpurchasesareoncreditandarepaidonemonthafterpurchaseshavebeenmadeless5%cashdiscount.

4. AloanofN$120000willbereceivedon30November2012.Thiswillberepaidinequalmonthlyinstalmentsover4yearswitheffectfrom1December2012.

5. WaterandElectricityareN$4000permonthandareexpectedtoincreasebyN$400inDecember2012.

6. Salariesandwagesarereviewedon30Novemberannually.• Themanager’swillincreaseby8%witheffectfrom1December2012.• Theshopassistants’wageswillbeunchangedfromOctober.

7. TheownerisplanninganoverseastripinDecemberandwillthereforedrawN$40000cash.

ThisisN$15000morethanhisnormalmonthlycashdrawings.

8. EquipmentorderedduringOctober2012,N$120000,willbedeliveredon1November2012.Adepositof30%ispayableondateofdeliveryandtherestinfourequalinstallmentseffectivefrom1December2012.

9. TheBankaccountshowedadebitbalanceofN$47000on31October2012.

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REQUIRED

(a) PreparetheCashBudgetforthetwomonths30November2012and31December2012.

Shipanga DealersCash Budget of for the two months ended 31 December 2012

November December

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(b) Theshopassistantsfeelthattheyarebeingtreatedunfairlybynotgettingawageincrease.Statetwopointsfromtheabove-mentionedinformationtosupporttheiropinion.

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(c) Youareabankmanagerinchargeofapprovingloans.SebastiaanpresentsyouwithhisCashBudgetandasksforanadditionalloanofN$200000.Statewhatyourdecisonwouldbe,andexplaintwopointsyouwouldconsiderinmakingthatdecision.

Decision........................................................................................................

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6 ThefollowinginformationrelatestotheactivitiesofaproductiondepartmentofafactoryforJuly2013.

Rawmaterialsused N$36000 Directwages N$30000 Productionoverheads N$25000 Labourhoursworked 24000 Hoursofmachineoperation 20000

(a) Calculateoverheadabsorptionratesusingthefollowingbases,correctto onedecimalplace.

(i) Costofmaterial

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(ii) Primecost

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(iv)Machinehours

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(b) AnorderreceivedduringJuly2013,wasasfollows: Rawmaterialused N$200 Directwages N$165 Labourhours 165 Machinehours 120

Calculatethetotalproductioncostwhichmaybechargedtothejobbyusingthedifferentmethods.

Costofmaterial

Primecost Labourhours Machinehours

Rawmaterial

Directwages

Primecost

Factoryoverheads

Total cost

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(c) Thefactorycurrentlymanufacturesitsownproducts,butitisnowconsideringbuyingthemdirectlyfromanoutsidesupplieratalowerprice.Stateandexplaintwonon-financialfactorsthefactoryshouldconsiderbeforeproceedingwithsuchplans.

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