FM101 - imm
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ASSIGNMENT 1ST SEMESTER : FINANCIAL MANAGEMENT 1 (FM101) CHAPTERS COVERED
: CHAPTERS 1 – 5, 7 and 9
LEARNER GUIDE
: UNIT 1, 2, 3 and 5
DUE DATE
: 3:00 p.m.19 MARCH 2013
TOTAL MARKS
: 100
INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, the relevant Student Support Centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes. 1. You are required to submit ONE assignment per subject. 2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%. 3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam. 4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and subject at the top of each page. 5. The IMM GSM requires assignments to be presented in a typed format, on plain A4 paper. Unless otherwise specified, this assignment must be completed within a limit of 1500 words, excluding the bibliography. Students who exceed the word limit may find that only part of the submitted assignment will be marked. 6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front of each assignment. 7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM. 8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 19 March 2013. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m. on 19 March 2013 and up to 5:00 p.m. the following day, after which no assignments will be accepted. 9. If you fail to follow these instructions carefully, the IMM Graduate School of Marketing cannot accept responsibility for the return of the assignment. It may even result in your assignment not being marked. Results will be available on the IMM GSM website, www.immgsm.ac.za, on 3 May 2013.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
Page 2 of 5
SPECIFIC INSTRUCTIONS: The use of calculators is permitted. Show ALL calculations. Read all questions carefully to determine exactly what is required before attempting to answer. Number your answers clearly and set them out under appropriate headings and sub-headings, using the formats provided where applicable. ANSWER ALL QUESTIONS QUESTION 1
[26]
Mark each of the accounts listed in the following table as follows: 1.1
In column (1), indicate in which statement – income statement (IS) or balance sheet (BS) – the account belongs.
1.2
In column (2), indicate whether the account is a current asset (CA), current liability (CL), expense (E), non-current asset (NCA), non-current liability (NCL), revenue (R) or shareholder’s equity (SE). The type of account must be in terms of IS and BS entries and not the basic accounting equation (BAE).
Account name Trade and other payables (Creditors) Trade receivables (Debtors) Accumulated depreciation Administrative expense Buildings Cash Ordinary share capital (at par) Cost of goods sold Depreciation Equipment General expense Finance cost Inventories Land Long-term debt Machinery Marketable securities Short-term borrowings Operating expense Preference share capital Preference share dividends Retained earnings Sales revenue Selling expense Taxation on profits Vehicles
Assignment: 1st Semester 2013
(1) Statement
(2) Type of account
© IMM Graduate School of Marketing FM101
Page 3 of 5
QUESTION 2
[50]
The following pre adjusted balances were extracted from the ledger of ABC Traders on 31 December 2012.
Capital Cash at bank Buildings Vehicles Furniture Salaries Water and electricity Carriage on sales Carriage on purchases Fixed Deposit Provision for doubtful debts Commission received Rent received Insurance Packing Material Drawings Bad Debts Debtors Creditors Accumulated Depreciation: Vehicles Accumulated Depreciation: Furniture
R 2 100 000 94 350 600 000 300 000 210 000 215 000 15 500 22 000 12 300 100 000 3 000 20 860 14 000 4 800 10 200 13 500 15 200 312 450 282 450 150 000 95 000
ADDITIONAL INFORMATION 1.
The following transactions took place in respect of the particular product that ABC Traders sold during 2012. Date 01-Jan-12 03-Feb-12 04-Mar-12 05-Jun-12 06-Aug-12 31-Dec-12
Units Price per unit Stock on hand 10 000 R 100 Issued stock 4 000 Received stock 16 000 R 120 Issued stock 4 000 Issued stock 6 000 Returned stock to supplier: 2 000 units received on 4 March.
2.
A debtor, Mr Xaba, with a debt of R2 450 must be written off as irrecoverable.
3.
Adjust the provision for doubtful debts to 2% of outstanding debtors (after all adjustments relating to debtors have been accounted for.)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
Page 4 of 5
4.
The fixed deposit was created on 1 April 2012 and will mature in 3 years time. The interest rate is 12% per annum. As yet, no interest has been received relating to this fixed deposit.
5.
Water and electricity for November and December 2012 is still due. (It is assumed that the water and electricity charge is incurred equally every month.)
6.
Insurance includes an amount of R2 000 in respect of additional insurance taken out and paid for the period 1 July 2012 to 30 June 2013.
7.
Rent has only been received until the end of October 2012. (There have been no changes to the monthly rental charged by ABC Traders throughout the year.)
8.
Depreciation must be provided for as follows: a. Vehicles – 20% per annum on the cost price. b. Furniture – 10% per annum on the reducing balance method. (No vehicles or items of furniture were bought or sold during the year.)
9.
An amount of R2 000 is still due in respect of delivery fees incurred on sales.
10.
ABC Traders requires a 30% mark-up on cost price.
11.
ABC Traders uses a periodic inventory system. Ignore VAT.
REQUIRED: 2.1
Calculate the value of the closing stock using the FIFO method.
(10)
Use the following format and show the balance after each transaction.
Date 2.2
Units
Received Price Amount
Issued Units Price Amount
Units
Balance Price Amount
After taking all the above information into account prepare the following: 2.2.1 The income statement (statement of comprehensive income) for the year ended 31 December 2012. (23) 2.2.2 The balance sheet (statement of financial position) as at 31 December 2012.
Assignment: 1st Semester 2013
(17)
© IMM Graduate School of Marketing FM101
Page 5 of 5
QUESTION 3
[15]
Refer to the information given in point 1 of the additional information of Question 2 and answer the questions below: 3.1
Date 3.2
Calculate the value of the closing stock using the weighted average method. Use the following format and show the balance after each transaction.
Units
Received Price Amount
Issued Units Price Amount
Units
(8)
Balance Price Amount
Calculate the gross profit for the year ended 31 December 2012 using the amount calculated in 3.1 above. (You may assume a periodic inventory system is maintained and that the mark up of 30% is still required.) (7)
QUESTION 4
[9]
You are required to calculate the values marked by A-N in the table provide below. You need only write the correct answer next to each respective letter. An example has been provided below: E.g. A B …
R1 500 R1 000
Round off all answers to the nearest Rand. Cost Price R 1 500 D G J R 5 000
% mark-up 20% on cost 100% on cost 25% on cost 40% on cost M
Selling Price
VAT (14%)
A E R 3 500 K N
B R 350 H L R 910
Marked Price C F I R 11 000 R 7 410 (9)
ASSIGNMENT TOTAL: 100
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
ASSIGNMENT 1ST SEMESTER : FINANCIAL MANAGEMENT 1 (FM101) CHAPTERS COVERED
: CHAPTERS 1 – 5, 7 and 9
LEARNER GUIDE
: UNIT 1, 2, 3 and 5
DUE DATE
: 3:00 p.m.19 MARCH 2013
TOTAL MARKS
: 100
INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, the relevant Student Support Centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes. 1. You are required to submit ONE assignment per subject. 2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%. 3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam. 4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and subject at the top of each page. 5. The IMM GSM requires assignments to be presented in a typed format, on plain A4 paper. Unless otherwise specified, this assignment must be completed within a limit of 1500 words, excluding the bibliography. Students who exceed the word limit may find that only part of the submitted assignment will be marked. 6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front of each assignment. 7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM. 8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 19 March 2013. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m. on 19 March 2013 and up to 5:00 p.m. the following day, after which no assignments will be accepted. 9. If you fail to follow these instructions carefully, the IMM Graduate School of Marketing cannot accept responsibility for the return of the assignment. It may even result in your assignment not being marked. Results will be available on the IMM GSM website, www.immgsm.ac.za, on 3 May 2013.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
Page 2 of 5
SPECIFIC INSTRUCTIONS: The use of calculators is permitted. Show ALL calculations. Read all questions carefully to determine exactly what is required before attempting to answer. Number your answers clearly and set them out under appropriate headings and sub-headings, using the formats provided where applicable. ANSWER ALL QUESTIONS QUESTION 1
[26]
Mark each of the accounts listed in the following table as follows: 1.1
In column (1), indicate in which statement – income statement (IS) or balance sheet (BS) – the account belongs.
1.2
In column (2), indicate whether the account is a current asset (CA), current liability (CL), expense (E), non-current asset (NCA), non-current liability (NCL), revenue (R) or shareholder’s equity (SE). The type of account must be in terms of IS and BS entries and not the basic accounting equation (BAE).
Account name Trade and other payables (Creditors) Trade receivables (Debtors) Accumulated depreciation Administrative expense Buildings Cash Ordinary share capital (at par) Cost of goods sold Depreciation Equipment General expense Finance cost Inventories Land Long-term debt Machinery Marketable securities Short-term borrowings Operating expense Preference share capital Preference share dividends Retained earnings Sales revenue Selling expense Taxation on profits Vehicles
Assignment: 1st Semester 2013
(1) Statement
(2) Type of account
© IMM Graduate School of Marketing FM101
Page 3 of 5
QUESTION 2
[50]
The following pre adjusted balances were extracted from the ledger of ABC Traders on 31 December 2012.
Capital Cash at bank Buildings Vehicles Furniture Salaries Water and electricity Carriage on sales Carriage on purchases Fixed Deposit Provision for doubtful debts Commission received Rent received Insurance Packing Material Drawings Bad Debts Debtors Creditors Accumulated Depreciation: Vehicles Accumulated Depreciation: Furniture
R 2 100 000 94 350 600 000 300 000 210 000 215 000 15 500 22 000 12 300 100 000 3 000 20 860 14 000 4 800 10 200 13 500 15 200 312 450 282 450 150 000 95 000
ADDITIONAL INFORMATION 1.
The following transactions took place in respect of the particular product that ABC Traders sold during 2012. Date 01-Jan-12 03-Feb-12 04-Mar-12 05-Jun-12 06-Aug-12 31-Dec-12
Units Price per unit Stock on hand 10 000 R 100 Issued stock 4 000 Received stock 16 000 R 120 Issued stock 4 000 Issued stock 6 000 Returned stock to supplier: 2 000 units received on 4 March.
2.
A debtor, Mr Xaba, with a debt of R2 450 must be written off as irrecoverable.
3.
Adjust the provision for doubtful debts to 2% of outstanding debtors (after all adjustments relating to debtors have been accounted for.)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
Page 4 of 5
4.
The fixed deposit was created on 1 April 2012 and will mature in 3 years time. The interest rate is 12% per annum. As yet, no interest has been received relating to this fixed deposit.
5.
Water and electricity for November and December 2012 is still due. (It is assumed that the water and electricity charge is incurred equally every month.)
6.
Insurance includes an amount of R2 000 in respect of additional insurance taken out and paid for the period 1 July 2012 to 30 June 2013.
7.
Rent has only been received until the end of October 2012. (There have been no changes to the monthly rental charged by ABC Traders throughout the year.)
8.
Depreciation must be provided for as follows: a. Vehicles – 20% per annum on the cost price. b. Furniture – 10% per annum on the reducing balance method. (No vehicles or items of furniture were bought or sold during the year.)
9.
An amount of R2 000 is still due in respect of delivery fees incurred on sales.
10.
ABC Traders requires a 30% mark-up on cost price.
11.
ABC Traders uses a periodic inventory system. Ignore VAT.
REQUIRED: 2.1
Calculate the value of the closing stock using the FIFO method.
(10)
Use the following format and show the balance after each transaction.
Date 2.2
Units
Received Price Amount
Issued Units Price Amount
Units
Balance Price Amount
After taking all the above information into account prepare the following: 2.2.1 The income statement (statement of comprehensive income) for the year ended 31 December 2012. (23) 2.2.2 The balance sheet (statement of financial position) as at 31 December 2012.
Assignment: 1st Semester 2013
(17)
© IMM Graduate School of Marketing FM101
Page 5 of 5
QUESTION 3
[15]
Refer to the information given in point 1 of the additional information of Question 2 and answer the questions below: 3.1
Date 3.2
Calculate the value of the closing stock using the weighted average method. Use the following format and show the balance after each transaction.
Units
Received Price Amount
Issued Units Price Amount
Units
(8)
Balance Price Amount
Calculate the gross profit for the year ended 31 December 2012 using the amount calculated in 3.1 above. (You may assume a periodic inventory system is maintained and that the mark up of 30% is still required.) (7)
QUESTION 4
[9]
You are required to calculate the values marked by A-N in the table provide below. You need only write the correct answer next to each respective letter. An example has been provided below: E.g. A B …
R1 500 R1 000
Round off all answers to the nearest Rand. Cost Price R 1 500 D G J R 5 000
% mark-up 20% on cost 100% on cost 25% on cost 40% on cost M
Selling Price
VAT (14%)
A E R 3 500 K N
B R 350 H L R 910
Marked Price C F I R 11 000 R 7 410 (9)
ASSIGNMENT TOTAL: 100
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing FM101
