Question 1: (10 marks) Remi has two properties that are surplus to the firms requirements and are leased out. Details of rent in advance and rent in arrears at the beginning and end of the year are as follows: 31 October 2020 Rs 31 October 2021 Rs Rent received in advance, property 1 6,000 ? Rent in arrears, property 2 (all subsequently received) 7,000 ? 1 st Property Rent receivable for property one is paid quarterly in advance on 1 January, 1 April, 1 July and 1 October. The annual rent receivable has remained constant for several years at Rs3,000 per month. Rs9,000 was received as expected from the tenant on 1 October 2021. 2 nd Property Rent receivable for property 2 is paid monthly in arrears on the first day of the subsequent month. Rent receivable for property 2 was decreased during the year ended 31 October 2021 as follows: Rent receivable for the year ended 30 June 2021 was Rs42,000; Rent receivable for the year ended 30 June 2022 was reduced to Rs33,000. Remi received Rs43,250 cash for rent receivable on property 2 in the year ended 31 October 2021. Required: (a) Calculate the figure for rent receivable for inclusion in the Income Statement of Remi for the year to 31 October 2021; 3 Marks (b) Prepare the rent receivable T account for Remi for the year to 31 October 2021. 7 Marks Question 2: (10 marks) Stephen has a term loan. The following details are available in relation to the term loan for the year ended 31 October 2021: On 1 November 2020 Stephen had a bank loan of Rs125,000. The interest rate of this loan was 6% and the interest accrued on 1 November 2020 was Rs 2,250. On 1 April 2021 Stephen additionally borrowed Rs15,000 with an interest rate of 6.5%. On 1 July 2021 the interest rate fell to 5.5% On 1 September 2021 Stephen reimburses Rs5,000 of the contracted loan. The interest rate remained unchanged at 5.5%. During the year ended 2021 Stephen settle Rs8,500 of the interest on the loan. Required: (a) Calculate the interest expenses to be included in the Income Statement of Stephen for the year to 31 October 2021 (to the nearest whole number). 4 Marks (b) Prepare the interest and loan T account for Stephen for the year to 31 October 2021. 6 Marks Question 3: (10 marks) Mr. Brown, a sole trader, has provided the following information for the year ended 31 December 2021: Rs Opening receivables debit balances 211,250 Opening receivables credit balances 1,750 Sales (90% credit, 10% cash) 1,110,500 Credit sales returns 17,130 Cash received from customers (95% from credit customers) 895,400 Irrecoverable debts 17,700 Irrecoverable debts previously written off recovered (these funds have been included in cash receipts above) 2,310 Opening allowance for receivables 13,320 Contra entry with balances on payables ledger 5,970 Closing receivables credit balances 980 Required: Using a receivables control account, compute the closing receivables amount for Mr. Brown as at 31 December 2021. 10 Marks Question 4: (10 marks) You work as a trainee accounting clerk for Mr. Eric. He has provided you with the following bank statement and bank account details in respect of the month ended 31 January 2021. STATEMENT OF ACCOUNT - MCB LTD Statement date - 31 January 2021. Account No 123456789 Date Particulars Debit Credit Balance Rs 01-Jan-21 Balance forward 27,970 Cr 03-Jan-21 Cheque 14596 1,250 26,720 Cr 03-Jan-21 Lodgement 7,070 33,790 Cr 06-Jan-21 Cheque 14597 60 33,730 Cr 06-Jan-21 Direct debit 1,010 32,720 Cr 12-Jan-21 Credit transfer 2,330 35,050 Cr 13-Jan-21 Cheque 14600 710 34,340 Cr 14-Jan-21 Cheque 14601 6,014 28,326 Cr 16-Jan-21 Lodgement 4,500 32,826 Cr 19-Jan-21 Cheque 14599 9,002 23,824 Cr 23-Jan-21 Bank charges for December 2020 211 23,613 Cr 25-Jan-21 Interest received for the Quarter 31 23,644 Cr 27-Jan-21 Dishonoured cheque 800 22,844 Cr 27-Jan-21 Cheque 14598 13,045 9,799 Cr 30-Jan-21 Cheque 14603 2,524 7,275 Cr 31-Jan-21 Lodgement 7,250 14,525 Cr 31-Jan-21 Standing order: rent paid 2021 13,500 1,025 Cr Mr. Erics books and records show the followings transactions through the bank account for the month of January 2021: Date Receipts Rs Date Payments Rs 1/01/21 Balance 33,790 4/01/21 Cheque 14597 60 6/01/21 Cheque 14598 13,000 10/01/21 Cheque 14599 9,002 11/01/21 Cheque 14600 710 12/01/21 Lodgement 2,330 12/01/21 Cheque 14601 6,014 16/01/21 Lodgement 4,500 18/01/21 Cheque 14602 5,949 20/01/21 Cheque 14603 2,524 28/01/21 Lodgement 7,350 30/01/21 Cheque 14604 42 31/01/21 Lodgement 4,110 31/01/21 Balance 14,779 52,080 52,080 1/2/2021 Balance 14,779 Required: (a) Prepare the adjusted cash book for the month of January 2021. 4 Marks (b) Prepare a statement on 31 January 2021, reconciling the adjusted cash book with the bank statement balance. 4 Marks (c) Explain, with the aid of relevant examples, in report format, two reasons for preparing bank reconciliations on a regular basis. 2 Marks Question 5: (10 marks) Mrs Simla, a sole trader, has provided the following trial balance extracted from the books of on 31 December 2021: Rs (Dr) Rs(Cr) Land and buildings 220,400 Accumulated depreciation on land and buildings 88,160 Equipment 104,700 Accumulated depreciation on equipment 38,900 Motor vehicles 71,740 Accumulated depreciation on motor vehicles 51,390 Inventory as at 1/1/2021 41,010 Receivables 98,170 Payables 51,240 Bank and cash 25,500 Tax liability 9,800 Prepayments 410 Sales and purchases 407,300 574,950 Returns outwards and returns inwards 6,770 7,010 Discounts 2,100 3,520 Carriage inwards 790 Light and heat 8,790 Telephone and internet 6,020 Business insurance 17,420 Rates and water charges 9,320 Wages and salaries 104,575 Long term bank loan 87,500 Long term loan interest 5,280 Irrecoverable debts 950 Drawings 18,090 Accumulated profits/losses 62,100 Capital 174,765 1,149,335 1,149,335 The following information, which has not been accounted for above, is also available: i) Inventory as at 31 December 2021 showed the following information. Based on this information the value of closing inventory to be incorporated into the financial statements must be calculated. Product Quantity Cost per unit Sales Price per unit Costs to Sell per unit in Units Rs Rs Rs X 1,160 4.15 5.15 0.40 Y 5,480 2.70 2.65 - Z 7,320 1.85 1.90 0.10 ii) On 31 December 2021 Mrs Simla paid Rs1,150 for her personal house insurance out of the business bank account funds. No part of the house is used in the business. iii) On 31 December 2021 Mrs Simla paid Rs5,000 for tax to the Mauritius Revenue Authority. iv) On 31 December 2021 Mrs Simla introduced Rs50,000 as capital to boost the expansion in 2022. These funds were deposited in the firm bank account. v) On 30 June 2021 a motor vehicle was sold. The motor vehicle was purchased for Rs45,000 and had accumulated depreciation of Rs30,375 as at 1 January 2021. Rs15,500 was received for the sale of the motor vehicle. (See additional information below for depreciation policy) vi) Allowance to be made for depreciation as follows: Land and buildings 2% straight line Equipment 10% reducing balance Motor vehicles 15% straight line The depreciation policy is to charge depreciation on a monthly basis from the month of purchase to the month of sale/disposal. Required: Prepare the Income Statement for the year ended 31 December 2021 and the Statement of Financial Position as at that date. 20 Marks