TELEMATICS 2017 ACCOUNTING Grade 11 - Western Cape

[Pages:20]Directorate: Curriculum FET

TELEMATICS 2017

ACCOUNTING Grade 11

Accounting

2 Telematics: Grade 11 - 2017

Dear Grade 11 Accounting learner

Welcome to the Telematics project. This programme will support your revision and study programme in preparation for your final Grade 11 Accounting examination.

This is an opportunity for you to consolidate what you have been taught in class. The Telematics presenters will not be able to cover all aspects of the curriculm but will rather focus on aspects learners usually find difficulty with.

Tips for success in Accounting

In order to succeed in Accounting you need to take heed of the following: Start working from day 1 Pay careful attention in class to ensure that you understand Complete Accounting homework/exercises daily PRACTICE...PRACTICE...PRACTICE Work neatly and accurately Show calculations in brackets Read instructions to questions/activities carefully to ensure you know what is being asked Complete tasks and assessment activities including tests diligently as if preparing for your final examination Use past examination papers and tests for revision Refine your examination technique: when you revise, choose questions that will extend you in your weaker areas. Use the time allocations provided in the question to judge whether you are completing the question in the time available.

All the best with your Grade 11 year.

Dr GR Schreuder Senior Curriculum Planner: Accounting

Accounting

3

Telematics: Grade 11 2017

TELEMATICS TEACHING:

ACCOUNTING TIME TABLE ? GRADE 11

Date Monday, 6 February 2017

Time 16:00 ? 17:00

Monday, 20 February 2017

Wednesday, 1 March 2017

16:00 ? 17:00 16:00 ? 17:00

Thursday, 18 May 2017 16:00 ? 17:00

Tuesday, 10 October 2017

16:00 ? 17:00

Topic Fixed assets: Asset disposal

Fixed assets: Asset disposal and fixed asset note Partnerships: Format of Balance Sheet and Notes

Partnerships: Format of Balance Sheet and Notes

Partnerships Analysis and interpretation of financial statements

By the end of this lesson you should know: How to calculate depreciation using the straight line method (on cost price) and the diminishing balance method How to record the disposal of a fixed asset *at the beginning of a financial year *during a financial year *at the end of a financial year The format of the Asset Disposal account The format of the Asset Disposal account The format of the Fixed Asset Note

The purpose of an Income Statement The purpose of a Balance Sheet The format of the Balance Sheet and Notes to the Balance

Sheet How to prepare a Balance Sheet and Notes to the Balance

Sheet The process you need to follow when preparing the Income

Statement and Balance Sheet The purpose of an Income Statement The purpose of a Balance Sheet The format of the Balance Sheet and Notes to the Balance

Sheet How to prepare a Balance Sheet and Notes to the Balance

Sheet The process you need to follow when preparing the Income

Statement and Balance Sheet The purpose of calculating and analysing financial indicators Where to find the information How to calculate financial indicators/ratio's How to analyse financial indicators/ratio's

Accounting Tangible/Fixed Assets Important concepts/skills

Disposal of fixed assets Steps involved in the disposal of a fixed asset

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Telematics: Grade 11 2017

Depreciation Purpose of writing off depreciation What happens when a fixed asset is fully written off GAAP principles related to fixed assets:

*Historical Cost concept ? fixed assets are recorded at their original cost price

*Prudence ? assets that lose value should be depreciated

*Matching ? depreciation is allocated to the appropriate financial year

Calculation of depreciation on cost price (straight-line) Calculation of depreciation on diminishing balance Asset disposal ? can be regarded as either a nominal or a

balance sheet account. It will not go into Income Statement or Balance Sheet. It is an interim account used to calculate the profit or loss on the sale of a fixed asset.

Beginning of year During the year End of year

Step 1:Transfer cost price

Dr Asset disposal

Cr Fixed asset (Vehicles or Equipment)

Step 2:Write off depreciation (during and end of year)

Dr Depreciation

Cr Accumulated depreciation on Equipment/Vehicles

Step 3:Transfer accumulated depreciation

Dr Accumulated depreciation Cr Asset disposal

Step 4:Record sale

Cash sale: Dr Bank Cr Asset disposal

Credit sale: Dr Debtors control Cr Asset disposal

Trade in: Dr Creditors control Cr Asset disposal

Step 5:Calculate/Record profit/loss

Profit: Dr Asset disposal Cr Profit on sale of asset (I/S)

Loss: Dr Loss on sale of asset (I/S) Cr Asset disposal

Accounting

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Telematics: Grade 11 2017

Dr

Vehicles/Equipment

B

Cr

Balance

b/d

Bank/ Creditors' control

(purchases of fixed asset)

Asset disposal

(transfer of cost price of asset sold/traded in)

Balance

c/d

Balance

b/d

Dr

Accumulated depreciation on equipment/vehicles

B

Cr

Asset disposal

Balance

b/d

(transfer of accumulated depreciation on asset sold/traded in)

Balance

c/d

Depreciation

(depreciation written off)

Balance

b/d

Dr

Accumulated depreciation on equipment

Accumulated depreciation on Vehicles

Depreciation

N

Cr

Profit and loss

Accounting

Dr Equipment/ Vehicles

(transfer of cost price)

Profit on sale of asset

(when the asset is sold at more than carrying value)

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Telematics: Grade 11 2017

Asset disposal

Cr

Accumulated depreciation on equipment/vehicles

(transfer of accumulated depreciation)

Creditors' control/ Debtors' control/ Bank

(record the sale)

Loss on sale of asset

(when the asset is sold at less than carrying value)

TANGIBLE ASSETS / FIXED ASSETS

Land & buildings

Carrying value at beginning of year

Cost Accumulated depreciation

Movements: Additions Disposals at carrying value Depreciation Carrying value on at end of year

Cost Accumulated depreciation

Equipment

Vehicles

Total

Accounting Activity 1

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Telematics: Grade 11 2017

Use the information extracted from the accounting records of Josh Traders to prepare the following accounts in the General Ledger:

Vehicles Accumulated depreciation on vehicles Asset disposal Depreciation Balance/close off the accounts on 29 February 2016

Information:

1. On 1 March 2015 the following balances appeared, amongst others, in the books of Josh

Traders:

Vehicles

R759 000

Accumulated depreciation on vehicles

R297 750

2. On 31 August 2015 a vehicle with an original cost price of R180 000 was sold on credit for R100 000. The accumulated depreciation on this vehicle on 1 March 2015 amounted to R60 000.

3. On 1 December 2015 a new vehicle was purchased on credit for R200 000.

4. Depreciation is provided at 20% p.a. on the diminishing balance method.

Activity 2

You are provided with a partially completed note to the Balance Sheet of LauJen Traders on 28 February 2017.

REQUIRED:

2.1 Use the additional information below to complete the Fixed Asset Note to the Balance Sheet on 28 February 2017.

2.2 Prepare the Asset Disposal Account to record the sale of the Equipment.

ADDITIONAL INFORMATION:

1.

Depreciation is written off as follows:

Vehicles at 15% p.a. on cost price

Equipment at 20% p.a. on diminishing balance method

2.

During the year an invoice was received from Hermanus Wholesalers for the

following:

Repairs

R12 000

A garage built

R50 000

The full amount had incorrectly been debited to repairs.

3.

A new vehicle was bought on credit for R180 000 on 1 November 2016. The owner

also paid for the installation of a sound system costing R12 000 and for the license

of R540.

4.

On 31 August 2016 equipment was traded in against new equipment which cost

R240 000 at a loss of R12 160. The equipment that was traded in was bought on 1

March 2015 for R160 000.

Accounting

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Telematics: Grade 11 2017

PARTNERSHIPS

Concepts unique to partnerships (Interest on capital; Bonus to partners; Appropriation of profits)

General Ledger: (Capital accounts; Current accounts; Appropriation account) Adjustments Preparation of financial statements: Income Statement; Balance Sheet with Notes Analysis and interpretation of financial statements

It is important that you know the formats of the financial statements and notes

FORMAT OF INCOME STATEMENT

Sales Cost of sales Gross profit Other operating income

(

)

Gross operating income Operating expenses

(

)

Operating profit Interest income Profit before interest expenses/Finance cost Interest expense Net profit

(

)

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