Use the information provided below, for KA Furniture Stores for the month of May 20.7, to answer questions 12 to 14:

KA Furniture Stores is a furniture shop operating in Ivory Park. The following information appeared in the accounting records of the business and relates to the month of May 20.7.

a) The totals of the cash receipts journal and the cash payments journal was R167 000 and R202 000 respectively.

g) The following debit orders were noted on the bank statement:

A debit order to JJ Municipality for R6 500 for the monthly water and electricity account.

A debit order to Yourway Insurers for R2 900 for the monthly insurance premium.

A debit order to Katara Rental Properties for R9 000 for rent of the current business premises.

h) The following clients made direct deposits to KA Furniture Stores bank account

R

Mrs K Singh 5 100

Mr S Sithole 4 700

Miss Y Kruger 3 500

i) On 30 November 20.6, Naidoos Catering Service provided a catering service to KA Furniture Stores. The bookkeeper issued cheque no 220 for R15 000 to Naidoos Catering Services on 30 November 20.6. The cheque has not yet been presented for payment.

m) Cheque no 470 for R281 was correctly recorded in the cash payments journal but according to the bank statement received from ABC Bank the amount paid was R218.

12. How would you rectify the error made by the bank for the incorrect amount reflecting on the bank statement of R218 instead of R281 for cheque no 470? (refer to m in the above information provided to you)

(1) An entry will be made in the cash receipts journal with the difference of R63.

(2) An entry will be made in the cash payments journal with the difference of R63.

(3) An entry will be made on the credit side of the bank reconciliation statement with the difference of R63.

(4) An entry will be made in the general journal with the difference of R63.

(5) An entry will be made on the debit side of the bank reconciliation statement with the difference of R63.

13. Where would you record cheque no 220 which was not yet presented for payment? (refer to i in the above information provided to you)

(1) An entry will be made in the cash payments journal of R15 000 as a cancelled cheque.

(2) An entry will be made in the cash payments journal of R30 000 as a cancelled cheque.

(3) An entry will be made in the cash receipts journal of R30 000 as a cancelled cheque.

(4) A entry will be made on the credit side of the bank reconciliation statement with R15 000.

(5) An entry will be made in the cash receipts journal of R15 000 as a cancelled cheque.

14. In which of the following will you record the direct deposits made by the clients of KA Furniture Stores? (refer to h in the above information provided to you)

(1) Cash payments journal.

(2) Bank reconciliation statement.

(3) Cash receipts journal.

(4) General journal.

(5) Sales journal.

Question 7:

R
Inventory (1 July 20.7)...............................	150 000
Cash purchases Credit purchases Purchases returns	15 000 6 000 2 000
Freight inwards Freight outwards Settlement discount received.. Settlement discount granted	1 200 1 800 1 700 2 500
Inventory (31 July 20.8).	120 000

Additional information:

The owner of Snow Plumbing Services donated taps and basins to the value of R1 000 to the local crche on 16 June 20.7. No entries regarding this transaction was made in the accounting records of Snow Plumbing Services, yet.

7. The cost of sales is

(1) 47 500

(2) 17 300

(3) 10 300

(4) 19 000

(5) 18 000

The period started May 2006-May 2007