2016 KZN June QP_hlayiso.com_.pdf

Basic Education KwaZulu-Natal Department of Education REPUBLIC OF SOUTH AFRICA Fe alaetaletatatelalatelalatelaladielsicialelieteleieieiaeieieleielelaeeieeeaniaas : ACCOUNTING x t COMMON TEST ‘ : JUNE 2016 : 9 PPP TeTrTrTrrrrrrrrrrrrrrrrrrrrirrerriit tte NATIONAL SENIOR CERTIFICATE TIME: 3 HOURS | “| marks: — 300 N.B. This question paper consists of 17 pages and an answer book of 15 pages. Please turn over [ Copyright reserved

Downloaded from hlayiso.com NSC Accounting Common Test June 2016 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. You are provided with a question paper and an ANSWER BOOK in which to answer ALL the questions. 2. This question paper comprises SIX compulsory questions. Answer ALL the questions. 3. Use the format provided in the answer book in order to reflect your answers. 4, Where applicable-workings must be shown in order to achieve part-marks. 5. You may use a non-programmable calculator. 6. You may use a dark pencil or blue/black ink to. answer the questions. 7. Use the information in the table in the next page as a guide when answering the question paper. Try NOT to deviate from it. Copyright reserved Please turn over

Accounting Downloaded from hlayiso.com NSC Question 1: 60 Marks; 36 Minutes Main topic of the question This question integrates: Cash Flow and ratio’s Financial accounting Cash flow Statement and ratio’s QUESTION 2: 35 Marks; 21 Minutes Main topic of the question This question integrates: Interpretation of Financial Statement Financial accounting Analysis and interpretation of financial statement QUESTION 3: 45 Marks; 27 Minutes Main topic of the question This question integrates: Reconciliations and Interpretation Financial accounting Bank reconciliation and creditors reconciliations Managing resources Internal control QUESTION 4: 90 Marks; 54 Minutes Main topic of the question This question integrates: Financial Statement Financial accounting Income Statement and notes QUESTION 5: 30 Marks; 18 Minutes Main topic of the question This question integrates: Stock valuation and internal control Managing resources inventory valuation: FIFO and internal control problem-solving QUESTION 6: 40 Marks; 24 Minutes Main topic of the question This question Integrates: Fixed asset and internal control Financial accounting Tangible assets Asset disposal account Managing resources Internal control Copyright reserved Please turn over Common Test June 2016

Aceounting Downloaded fron hlayiSO.COM common Test June 2016 QUESTION 1 CASH FLOW AND RATIO’S (60 Marks;36 Minutes) 41. BHUNU LIMITED. You are provided with information related to Bhunu LTD. REQUIRED: 1.1 Prepare the reconciliation between net profit before tax and cash generated from the operating activities. (16) 1.2 Complete the Cash Flow Statement for the year ended 29 February 2016. (27) 4.3. Atthe AGM, a shareholder stated that the cash flow statement reflects good decisions taken by the directors. Explain TWO points, with relevant figures, to. support his opinion. (6) 1.4. Calculate the following financial indicators for the financial year ended 29 February 2016. 1.4.1 Net asset value per share (NAV) (3) 1.4.2 Current ratio (5) 1.4.3 Debt/equity ratio (3) Copyright reserved Please turn over

| } Accounting INFORMATION: A. Extract from the Income Statement: Downloaded from hlayiso.com Common Test June 2016 29 Feb 2016 Depreciation ? | Interest on loan (capitalised) 144 000 Net profit before tax ? Income tax for the year (28%) 210 000 Net profit after tax ? B. The following figures were extracted from the financial records on 29 February: | 2016 2015 Ordinary share capital 2 800 000 1 440 000 Retained income 479 000 317 000 Non-current liabilities 1062 000 1 240 000] Fixed/Tangible assets 2 795 000 2 185 000 Financial asset 700 000 740 000 Inventories (all trading stock) 920 000 780 000 Debtors control 345 000 429 000 Cash and cash equivalents 613 000 § 000 Creditors control 288 000 378 000 Shareholders for dividends 252 000 81 000 SARS (Income tax) Dr__2000 Cr "24 000 Bank overdraft 85 000 Cc, Share capital Authorised share capital consists of 1 000 000 ordinary shares. Copyright reserved 600 000 shares were issued on 1 March 2015. 200 000 new ordinary shares were issued on 1 September 2015. 100 000 ordinary shares were repurchased on 1 February 2016 at 80 cents above the average issue price.{ This transaction was properly recorded). On 29 February 2016 the share register reflect that a total of 700 000 shares had been issued to date. Fixed assets e ® Additional property was purchased for R 836 000 during the year. Equipment was sold for R72 000 at carrying value during the year. Interim dividends Interim dividends of R 126 000 was paid on 30 September 2015. Please turn over

QUESTION 2 2.1 Accounting Downloaded from hlayiso.cOM common test June 2016 NSC INTERPRETATION OF FINANCIAL STATEMENT STANLEY LIMITED. You are provided with information related to Stanley LTD. REQUIRED: 2.1.1 (35 Marks; 21 Minutes) Comment on the solvency of this business. Quote a financial indicator from the question to support your answer, 2.1.2 The company directors feel that the shareholders should be happy with, the returns, earnings and dividends of the company. Quote THREE relevant financial indicators (actual ratios or percentages) to support their opinion. INFORMATION: FINANCIAL. INDICATORS: The following financial indicators were calculated for the past two years: Copyright reserved 2015 Debt/Equity ratio ? 0.27:1 Total assets : total liabilities 4.214 2.3: Current ratio 2.4.1 1.8:4 Acid-test ratio 4 0.731 Stock-turnover rate 3 times 2.4 times % return on average shareholders' equity (after tax) 25% 23.9% % return on total capital employed (before tax) 43.3% 39.7% Net asset value per share 350 cents 330 cents Dividends per share 64 cents 65 cents Earnings per share 95.2 cents 78.8 cents Interest rate in all investments 10% 9% (4) (6) Please turn over

| | Accounting NSC 2.2 BBLIMITED AND NGOBESE LIMITED Downloaded from hlayisO.COM germon test June 2016 Your friend, Sibusiso, wants to buy shares in a company which sells clothing. He asks you for advice and presents you with the following financial indicators of two companies he is considering. Both companies have the same number of shares. ee Mee: 2S) NGOBESE LTD REQUIRED: 2.2.1 Market price per share on the JSE 800 cents 900 cents Net asset value per share 720 cents 1010 cents Earnings per share 410 cents 176 cents Dividends per share | 240 cents 185 cents % return on shareholders’ equity 21.3% | 11.2% Current ratio 6.0: 4 1.5:1 Acid-test ratio 3:1 431 Period for which stock is on hand 180 days 32 days Average debtors’ collection period 60 days 28 days Sibusiso is of the opinion that Ngobese Ltd is handling its working capital more effectively and is in a better liquidity position than BB Ltd. Explain and quote THREE financial indicators to support his opinion. 2.2.2 (2) The existing shareholders of the two companies hold different opinions of the current market value of their shares. e Copyright reserved Explain why the existing shareholders of BB Ltd are happy with this. Quote a financial indicator/figures to support your answer. Explain why the existing shareholders of Ngobese Lid are very disappointed with current market value. Quote a financial indicator/figures to support your answer. (4) Please turn over

Accounting 23 Copyright reserved NSC BLIND LIMITED AND SMITH LIMITED Your friend, Sizwe, wants to buy shares in a company which sells TV Games. He asks you for advice and presents you with the following financial indicators of two companies he is considering. Both companies have the same number of shares. ee EeIND LTD TP SMITH LTD Current ratio 5:4 1.731 Debt-equity ratio 0.3:1 2:4 Return on total capital employed (ROTCE) 14% 10% 19% 9% 600 cents 1000 cents 450 cents 500 cents 350 cents 800 cents 450 cents 700 cents | 12% 12% Return on shareholders' equity (ROSHE) | Earnings per share (EPS) Dividend per share (DPS) | Net asset value per share (NAV) Market price of shares on JSE Interest rate on loans REQUIRED: 2.3.1 Compare and comment an the dividend pay-out policies of the two companies. 2.3.2 Comment on the degree of risk and gearing. Explain how this will influence your choice of company. (6) (6) Downloaded from hlayiSO.COM common test June 2016 Please turn over

Accounting QUESTION 3 Downloaded from hlayiso.com NSC Common Test June 2016 RECONCILIATIONS AND INTERPRETATION (45 Marks, 27 Minutes) 3.1 You are provided with information related to Miller Jewelers. REQUIRED: 3.1.1 Calculate the correct totals for the Cash Receipts Journal and the Cash Payments Journal for February 2016. (10) 3.1.2 Calculate the correct balance for the Bank Account on 29 February 2016. (4) 3.1.3. Prepare the Bank Reconciliation Statement on 29 February 2016. (8) 3.1.4 The fixed deposit of R100 000 matures next month. The interest on fixed 3.1.5 deposit is 10% p.a while the interest on overdraft is 12% p.a. What advice would you offer the owner in this regard? Explain TWO points, quoting appropriate figures to support your answer. (4) Refer to Information 4 below. * Explain why the internal auditor should be concerned about the outstanding deposit of R20 295. » Explain how cheque No. 674 should be dealt with when the financial Statements are prepared on 29 February 2016. Give a reason for your answer. (4) Copyright reserved Please turn over

Accounting Downloaded fram hlayiso.COM common test June 2016 NSC INFORMATION: 4. At the end of the previous month, 31 January 2016, the following items were reflected in the Bank Reconciliation Statement: Credit Balance as per Bank Statement 12 545 Outstanding deposit: 12.000 Outstanding cheques: e 261 (dated 19 August 2015) « 549 (dated 15 January 2016) e 543 (dated 19 February 2016) Balance as per bank account 2. On29 February 2016, the provisional totals in the journals were: « CRJ R70 600 e CPJ R105 320 3. The following items were reflected on the Bank Statement but not in the journals for February 2016: eseeee Direct deposit by a debtor, K Kwela, R2 400 Bank charges, R520 Interest on fixed deposit for February, R700 Interest on overdraft for February, R810 Stop-order in favour of Rama Insurance Co, R660 Dishonoured cheque on 29 February 2016, originally presented by a debtor, M Maduna, R6 200 Cheque no. 519 was presented for payment. 4, The following differences were noticed: Copyright reserved Cheque No. 565 for repairs was shown in the CPJ as R1 570, but on the February Bank Statement as R1 750. The Bank Statement is correct. A deposit of R12 000 appeared on the Bank Statement on 1 February 2016, but did not appear in the February CRJ. A deposit of R20 295, dated 20 February 2016, appeared in the February CRJ, but not on the February Bank Statement. The following cheques appeared in the February CPJ, but not on the Bank Statement: No. 654 (dated 23 February 2016), R2 800 No. 674 (dated 29 May 2016), R2.520 Please turn over

Accounting 3.2 Downloaded from hlayiso.com NSC THE CREDITORS CONTROL ACCOUNT AND THE CREDITORS LIST Common Test June 2016 The bookkeeper of Nonhlanhla Zwane Stores made some mistakes and omitted certain transactions in preparing the Creditors’ Control Account and the Creditors’ List on 29 February 2016. You are the internal auditor for the store. REQUIRED: 3.2.1 List the corrections that the bookkeeper must make to the Creditors’ Control Account in the General Ledger and Creditors list. If no entry is applicable, write “NO ENTRY” (15) INFORMATION Pre-adjustment figures on 29 February 2016 Creditors’ Control Account balance R160 300 Creditors’ List total from the Creditors’ Ledger R170 400 « Brian Traders R29 600 *® Thomas Wholesalers R96 500 * Willies Stores R44 300 ERRORS AND OMISSIONS A __ The total of the Creditors Allowance Journal was undercast by R13 000, B The total of Creditors Journal was inaccurately added as R52 250 instead of R62 350. Cc A payment of R43000 to Willies Stores was correctly recorded in the Cash Payments Journal but the bookkeeper neglected to post this payment to the creditor's account. D Acheque for R2 100 issued to Brian Traders in settlement of their debt of R2 300 was correctly recorded in the Cash Payments Journal but inadvertently posted to Thomas Wholesalers account. Rectify the error. EA credit balance of R470 from Willies Stores’ account in the Debtors Ledger must be transferred to their account in the Creditors Ledger. F Credit purchases of merchandise to the value of R38 600 from Thomas Wholesalers were wrongly entered as R83 600 in the Creditors Journal and posted as such. G Brian Traders’ account was mistakenly debited with credit purchases of merchandise to the value of R15 000, Copyright reserved Please turn over

Downloaded from hlayiso.com NSC QUESTION 4 INCOME STATEMENT AND NOTES (90 Marks, 54 Minutes) You are provided with information relating to Mouso Limited. The company sells clothing and sews garments for their customers. Their financial year ends on 29 February 2016. REQUIRED: Accounting Common Test June 2016 A.1 Prepare the Income Statement for the year ended 29 February 2016 (59) 4.2 Prepare the following notes to the financial statements on 29 February 2016: 4.2.1 Retained income (8) 4.2.2 Trade and other payables (23) INFORMATION: The following balances and totals were extracted from the Pre-adjustment Trial Balance of Mbuso Ltd, on 29 February 2016. Balance Sheet Accounts Section Ordinary share capital 8 000 00 Retained income 700 00 Mortgage Loan: TVM Bank (interest rate: 18% p.a.) 500 000 Vehicles 2 Equipment 950 000 Accumulated depreciation on vehicles (1 March 2015) 1 350 000 Accumulated depreciation on equipment (1 March 2015) 450 000 Fixed Deposit: TVM Bank (interest rate: 12% p.a.) 900 000 Creditors Control 660 000 Debtors Control 458 500 Trading stock 740 900 Provision for bad debts (1 March 2015) 30 000 Bank 45 200 Pension fund 45 400 UIF 12.000 SARS (PAYE) 64 100 SARS (Income tax) 100 00€ | Nominal Accounts Section Sales 5 840 000 Cost of sales 2 730 000 Debtors allowances 20 000 Insurance 53 800 Rent income 120 600 Salaries and wages 860 000 Interest on loan 63 000 Interest on fixed deposit 130 000 Packing material §2 000 Bad debts 14 000 Employers contributions 491 000 Bad debts recovered 3 400 Directors fees 300 000 Sundry expenses 2 Ordinary share dividends 185 000 Copyright reserved Please turn over

1 | | Accounting Downloaded from hlayiso.com NSC. Common Test June 2016 ADJUSTMENTS AND ADDITIONAL INFORMATION: A There were two Directors at the start of the accounting period. Directors fees have been paid for the first half of the accounting period. On 1 September 2015 the directors fees decreased by 5% p.a for both directors. On 1 December 2015, one director left the company. Both directors earn the same monthly fee. Provide for the outstanding fees owed to the directors. A debtor who originally owed R32 000 has been declared insolvent. His estate paid 40 cents in every rand and this has been correctly recorded. The remaining balance must be written off. An invoice issued to a debtor for goods sold on credit for R 70 000, upon which a trade discount of 10% was granted, was not recorded. The mark-up for this sale was 60%, An amount of R1 700 received from M Mpoani had been credited to the debtors control account in February 2016. The account of M Mpoani was written off during January 2016. Provision for bad debts must be adjusted to 5% of debtors. No entries have been made for stock stolen at the beginning of January 2016. The insurance company has informed Mbuso LTD that they have transferred R 32 000 into the business bank account in respect of the insurance claim. Mbuso LTD bears 20% of any stock loss. The physical count on 29 February 2016 reflect the following stock on hand: « Trading stock R 650 150 e Packing material R 21000 Rent income for March 2016 has already been received. The monthly rent was increased by 10% on 1 December 2015. An employee was left out in the salaries Journal for February 2016. The details from his pay-slip were: Gross salary R25 000 | Net salary R18 375 PAYE deduction R4 500 Pension deduction Ri 875 UIF deduction R250 The business contributions were as follows: e Pension fund: 10,5% of gross salary. e UIF: rand-for-rand basis. Note: all contributions are debited to the Employers contribution account. Total depreciation for the year was R 93 000 Provide for outstanding interest on loan. A payment of R200 000 was made towards the loan on 31 August 2015 and this was properly recorded. Income tax for the financial year was calculated as R322 000 and this is 28% of the net profit before tax. Final dividends were declared at 35 cents per share. 560 000 ordinary shares were in issue on 29 February 2016. Copyright reserved Please turn over

Downloaded frqm hlayisO.COM amon test June 2018 NSC Accounting QUESTION 5 INVENTORY VALUATION AND PROBLEM SOLVING (30 Marks; 18 Minutes) 5,1 You are provided with information related to H World Traders for the year ended 29 February 2016. The business sells only high definition decoders. The periodic ilnventory system and the FIFO stock valuation method are in operation, They buy alll their stock from one supplier. REQUIRED: 5.1.1 Explain ONE main difference between the periodic and continuous (perpetual) inventory systems. (2) 5.1.2 Using the FIFO method calculate the following: * Value of closing stock on 29 February 2016. (7) « Calculate cost of sales. (5) * Gross profit for the year ended 29 February 2016. (3) } 5.1.3 Calculate the average stock holding period (in days) for this financial year. (4) INFORMATION: A. DATE NUMBER | PRICE CARRIAGE | AMOUNT OF PER ON R ; UNITS UNIT | PURCHASES 4 March 2014: 100 R55 600 (opening stock) PURCHASES 1150 R28 750 | R776 250 May 2015 250 R630 R6 250 | R163 750 October 2015 800 R650 R20 000 |_ R540 000 January 2016 100 R700 R2 500 | R72 500 28 February 2016; 130 ? C: (closing stock) B. Carriage on purchases during the year amounted to R25 per television set. C. Ten (10) defective television sets bought during January 2016 were returned to the supplier. The supplier allowed for this return including the carriage. D. A selling price of R1 095 per television set was maintained throughout the year. The total sales for the year amounted to R1 215 450. Copyright reserved Please turn over

Downloaded fram HlayiSO.COM cornmon Test June 2016 NSC Accounting 5.2 PROBLEM SOLVING Amanda Sibiya is the owner of Cell-G, who sells cellular phones. She has three different branches that are managed by Thando, Zanokuhle and Sizolwethu. She is concerned that the branches are not running effectively and gave you the following information to analyse for May 2016, REQUIRED: Identify ONE problem in each branch. Quote figures to identify the problem in each case. Give Amanda advice on how to solve each problem. (9) Branch 1 Branch 2 | Brach 3 Thando Zanokuhle | Sizolwethu Sales R340 000 R170 000 R400 000 ; Returns from customers for the | month R25 500 R21 000 R20 000 | Stock on hand 60 days 20 days 120 days Stock turnover rate 8 times 4 times 12 times j Number of employees 5 7 7 | Stock stolen/lost during the month 0 2 units 15 units Advertising {R15 000 R10 000 R12 000 Copyright reserved Please turn over

Accounting Downloaded fram hlayiso.COM commen test June 2016 NSC QUESTION6 FIXED ASSET AND INTERNAL CONTROL You are provided with information related to Mpephose Traders for the year ended 29 February 2016. The business is owned by Sibongile Buthelezi. INFORMATION: A. Office equipment and disposals: (40 Marks; 24 Minutes) Office equipment includes the office computers. Four of the office computers were stolen on 31 August 2015. These four computers were originally bought at a cost price of R14 000 each. The accumulated depreciation on the stolen computers on 31 August 2015 was R19 600. The insurance company, Ace Insurers, only paid out R6 000 for each computer. These computers were replaced at a higher price on 34 August 2015. Depreciation was calculated at 10% p.a. B. Information from the financial statements for year ended 29 February 2016: FIXED ASSETS LAND AND EQUIPMENT | VEHICLES BUILDINGS Carrying value at beginning of year 4 200 000 §50 000 403 501 Cost 1 200 000 1.900 000 699 000 Accumulated depreciation ‘450.000 295 499 Movements Additions ? Disposal at carrying value (700 000) (36 400) Depreciation ? (111 000) Carrying value at the end of year 500 000 ? 292 501 Cost 500 000 992 000 699 000 l Accumulated depreciation ? 406 499 REQUIRED: 6.1. Prepare the Asset Disposal Account for office equipment (computers) stolen on 31 ( \ August 2015. ) 6.2 Calculate the date which the stolen equipment was purchased. (6) 6.3. Calculate the cost price of the new equipment which was purchased on 31 August 2015. (5) 6.4 Calculate the total depreciation for equipment on 29 February 2016. (5) 6.5 One of the office employees, Zolly Ndunakazi, knows that the insurance policy only covers theft if there is evidence of forced entry. She also knows that Sphiwe broke the security gate of the office to make the incident look like forced entry. She is not sure if Sbongile knows about this. What advice would you give Zolly? Explain ONE point. (3) 66 Explain how the Fixed Assets Register will assist the internal auditor in his duties. (8) Copyright reserved Please turn over

Accounting lon Delivery vehicles: NSC Downloaded fram hlayiso.com Common Test June 2016 As a service to their customers, the business delivers goods within Durban. They charge a flat rate of R250 per delivery. Clients pay cash directly to the drivers. 3 660 deliveries were made during the year. The delivery service operated on 260 days during the year. You are the internal auditor and you are concerned about possible problems relating to the delivery vehicles and their drivers. D. Information from the Fixed Assets Register and the accounting records on 29 February 2016: Fixed Assets Delivery Delivery Delivery Register vehicle vehicle vehicle 4 2 3 | Name of driver Old mill Thanduyise Khombindlela Date purchased 1 April 2015 1 January 2010 1 April 2013 Cost price of vehicle R315 000 R144 000 R 240 000 Accumulated R94 500 R143 999 R168 000 depreciation | Carrying value R220 500 R1 R72 000 Number of days 200 days 260 days 260 days worked done Number of deliveries 300 deliveries 2080 deliveries 1 500 deliveries costs for the year REQUIRED: Cash paid in by R75 000 R525 000 R275 000 drivers Fuel and maintenance R36 400 430 500 R201 500. 6.7 Identify and explain ONE major problem relating to each delivery vehicle or its driver. Quote figures from the information to support your answer. Provide a valid solution for each problem. Copyright reserved (9) TOTAL MARKS: 300

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