2020 Accounting Revision WorkBook ENG

Directorate: Curriculum FET ACCOUNTING Grade 12 Revision WORKBOOK

Gr 12 Accounting Revision Workbook INVENTORY ACTIVITY 1: Inventory (June 2016) (40 marks; 30 minutes) 1.1 CONCEPTS 1.1.1 4 1.1.2 1.1.3 1.1.4 1.2 LYNN STORES 1.2.1 Calculate the value of the closing stock on 29 February 2016 using the weighted-average method. 8 1.2.2 Calculate the following for the year ended 29 February 2016: Cost of sales: Gross profit: 6 1.2.3 Calculate the average stock-holding period (in days) on 29 February 2016. 5 2

Gr 12 Accounting Revision Workbook 1.2.4 Calculate the value of the closing stock by using the FIFO method. 7 1.3.1 Identify ONE problem in Shop 1 and ONE problem in Shop 2. Quote figures. In EACH case, give ONE point of advice. Branch Problem Advice Shop 1 Shop 2 6 1.3.2 Explain TWO good decisions that Chad has made in respect of Shop 3. Quote figures. 4 TOTAL MARKS 40 3

Gr 12 Accounting Revision Workbook ACTIVITY 2: Inventory (Feb/March 2017) (40 marks; 30 minutes) 2.1 CONCEPTS 2.1.1 2.1.2 3 2.1.3 2.2.1 Calculate the unit price of cricket bats on 1 July 2015. 2 2.2.2 Calculate the value of the stock on hand on 30 June 2016 using the weighted-average method. 10 2.2.3 Calculate the gross profit on 30 June 2016. 5 4

Gr 12 Accounting Revision Workbook 2.2.4 Calculate how long (in days) it is expected to sell the closing stock of 465 cricket bats. Use the closing stock in your calculation. 4 2.2.5 Provide a calculation to support André's concern about the control of cricket bats. How can André solve this problem? Explain ONE point. 7 2.3 Identify ONE problem relating to each branch. Quote figures to support your answer. In each case, offer Bennie advice. BRANCH PROBLEM (with figures) ADVICE Parys Pretoria Pofadder 9 TOTAL MARKS 40 5

Gr 12 Accounting Revision Workbook ACTIVITY 3: Inventory (November 2017) (35 marks; 25 minutes) 3.1 CONCEPTS 3.1.1 3.1.2 3.1.3 3.1.4 4 3.2 HOT-WHEELS (PTY) LTD Motorbikes: 3.2.1 Calculate the value of the closing stock on 30 September 2017 using the specific identification method. 7 3.2.2 Mike requires your advice on the three different models of motorbikes in which he is trading. Explain TWO points of advice. Point 1: Point 2: 4 6

Gr 12 Accounting Revision Workbook Helmets: 3.2.3 Calculate the value of the closing stock on 30 September 2017 using the weighted-average method. 9 3.2.4 Is the weighted-average method appropriate to value the helmets? Explain ONE point. 3 3.2.5 Mike suspects that helmets are being stolen from the shop despite security cameras being installed. Provide a calculation to verify his suspicion. 5 What can Mike do to improve the internal control of stock? State THREE points. Point 1: Point 2: Point 3: 3 TOTAL MARKS 35 7

Gr 12 Accounting Revision Workbook ACTIVITY 4: Inventory (Feb/March 2018) (35 marks; 25 minutes) 4.1 4.1.1 4.1.2 4.1.3 3 4.2.1 Calculate the value of the closing stock according to the FIFO method on 31 December 2017. 6 4.2.2 Calculate the cost of sales. Calculate the gross profit. 8 4.2.3 Calculate the value of the closing stock on 31 December 2017 by using the weighted-average method. 6 What will be the effect on the gross profit if the owner changes to this valuation method? Provide figures. 3 8

Gr 12 Accounting Revision Workbook 4.3 You are provided with information relating to Leno Furnishers. They sell tables, chairs and beds for cash only. The owner is concerned that the figures provided reflect poor internal control and decision-making. Identify ONE problem for each product. Quote figures. In EACH case, give advice on how to solve the problem. Product Problem (with figures) Advice Tables Chairs Beds 9 TOTAL MARKS 35 9

Gr 12 Accounting Revision Workbook ACTIVITY 5: Inventory (June 2018) (40 marks; 30 minutes) 5.1.1 Calculate the value of the closing stock of bicycles on 31 May 2018. Workings Answer Tempo Cruze Ryder 8 Calculate the cost of sales for the year ended 31 May 2018. Workings Answer 4 Calculate the gross profit for the year ended 31 May 2018. Workings Answer 3 5.1.2 Calculate the selling price of a Ryder bicycle. Workings Answer 3 Calculate the average number of Ryder bicycles sold per month. Workings Answer 3 Indicate how long it will take Fred to sell the closing stock of the Ryder bicycles. Show calculations. Workings Answer 3 10

Gr 12 Accounting Revision Workbook Give ONE possible reason for the slow sales of Ryder bicycles. Give advice (ONE point) to Fred in this regard. 4 5.2.1 Explain why it was NOT a good idea to change to a cheaper supplier of T-shirts. State TWO points. Point 1: Point 2: 4 5.2.2 Celia decided to change the supplier in 2018 and to change the mark-up %. How has this decision affected the business? State TWO points. Point 1: Point 2: 4 5.2.3 Make TWO separate suggestions to Celia to improve the profit on pants in 2019. Point 1: Point 2: 4 TOTAL MARKS 40 11

Gr 12 Accounting Revision Workbook (Q 5.2, Nov 2018) ACTIVITY 6: Inventory Valuation (20 marks; 15 minutes) 6. PACKER'S SUITCASE SHOP 6.1 Calculate the value of the closing stock on 30 June 2018 using the first- in-first-out method. Workings Answer 5 6.2 Charles suspects that suitcases have been stolen. Provide a calculation to support his concern. Workings Answer 5 6.3 Charles is concerned about the volume of stock on hand. Calculate for how long his closing stock is expected to last. Workings Answer 6 ONE problem with keeping too much stock on hand: ONE problem with keeping insufficient stock on hand: 4 TOTAL MARKS 20 12

Gr 12 Accounting Revision Workbook (Q2, May/Jun 2019) ACTIVITY 7: Inventory Valuation (40 marks; 30 minutes) 7.1 7.1.1 7.1.2 7.1.3 3 7.2 PHOTO-FIX TRADERS 7.2.1 Calculate: Value of closing stock of cameras Workings Answer 9 7.2.2 Value of closing stock of photo frames Workings Answer 8 7.2.3 The owner suspects that photo frames are being stolen. Provide a calculation to confirm his suspicions. Workings Answer 5 13

Gr 12 Accounting Revision Workbook 7.2.4 Tom is thinking of employing an assistant at a wage of R3 500 per month to control the stock of photo frames. Explain why this is NOT a good idea. Provide TWO points with figures/calculations. Explanation Figures Point 1 Point 2 6 7.3 MANAGEMENT OF INVENTORIES Product Problem Solution Cupboards Tables Chairs 9 TOTAL MARKS 40 14

Gr 12 Accounting Revision Workbook RECONCILIATIONS ACTIVITY 1: Creditors' reconciliation (June 2016) (18 marks, 15 minutes) 1.1.1 CREDITORS' RECONCILIATION CREDITORS' LEDGER STATEMENT Balance 110 170 111 600 (a) (b) (c) (d) (e) (f) (g) (h) 14 1.1.2 State TWO internal control measures that the business can use to prevent similar incidents from happening in future. 4 TOTAL MARKS 18 15

Gr 12 Accounting Revision Workbook ACTIVITY 2: Bank reconciliation (Mar 2017) (16 marks; 15 minutes) 2.1.1 Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016. Provisional Bank balance R16 785 Correct Bank balance Favourable/Unfavourable: ________________ 8 2.1.2 Bank Reconciliation Statement as at 31 July 2016 6 2.1.3 Explain ONE internal control measure that the business should implement to ensure that this will not happen in the future. 2 TOTAL MARKS 16 16

Gr 12 Accounting Revision Workbook ACTIVITY 3: Debtors' reconciliation and Age analysis (June 2017) (30 marks, 25 minutes 3.1 TRUE OR FALSE 3.1.1 3.1.2 3.1.3 3 3.2 MIZZY BOUTIQUE Use the table provided to indicate corrections that must be made to the Debtors' Control Account and the debtors' list. Provide figures and a plus (+) or minus (–) sign for each correction. Debtors' Control Debtors' List Account Balance/Total on R37 710 R39 490 28 February 2017 (a) (b) (c) (d) (e) (f) Balance/Total on 28 February 2017 13 3.3 GLENDALE TRADERS 3.3.1 Explain how a debtors' age analysis can assist with internal control over debtors. 2 17

Gr 12 Accounting Revision Workbook 3.3.2 Calculate the percentage of total debts exceeding the credit terms. 4 3.3.3 Explain ONE problem (with figures) relating to EACH of the following debtors: DEBTOR PROBLEM WITH FIGURES D Pillay W Patel 4 3.3.4 Explain TWO problems (with figures) relating to debtor D Gouws. 4 TOTAL MARKS 30 ACTIVITY 4: Bank Reconciliation And Internal Control (Nov 2017) (30 marks; 25 minutes) 4.1 4.1.1 4.1.2 4.1.3 3 18

Gr 12 Accounting Revision Workbook 4.2.1 Calculation of CRJ total Calculation of CPJ total 90 500 85 920 Bank account balance: 14 4.2.2 Bank Reconciliation Statement on 30 June 2017 9 19

Gr 12 Accounting Revision Workbook 4.2.3 Explain the problem relating to deposits. Quote evidence. Explain TWO strategies to prevent this in future. Strategy 1: Strategy 2: 4 TOTAL MARKS 30 ACTIVITY 5: Debtors' Reconciliation (March 2018) (25 marks; 20 minutes) 5.1.1 Explain why the debtors' age analysis is considered to be an effective internal control measure. State ONE point. 2 20

Gr 12 Accounting Revision Workbook 5.1.2 Explain TWO different problems highlighted by the debtors' age analysis. In EACH case, provide the name of a debtor and figure(s). PROBLEM DEBTOR AND FIGURE(S) 6 5.2 DEBTORS' RECONCILIATION 5.2.1 CORRECTIONS TO THE DEBTORS' CONTROL ACCOUNT ON 30 NOVEMBER 2017 Balance before errors and omissions 25 700 (i) (ii) (iii) (iv) (v) Correct Debtors' Control balance 7 5.2.2 DEBTORS' LIST ON 30 NOVEMBER 2017 L Nkosi (5 700 S Muller (11 100 M Welthagen ( –1 900 B Sandleni (15 900 Correct total of Debtors' List 10 TOTAL MARKS 25 21

Gr 12 Accounting Revision Workbook ACTIVITY 6: Reconciliation And Age Analysis (FS, Sep 2017) (35 marks; 30 minutes) 6.1 CONCEPTS 6.1.1 6.1.2 6.1.3 6.2.1 Calculate the correct Bank Account balance on 30 June 2017. 6.2.2 Bank Reconciliation Statement on 30 June 2017 22

Gr 12 Accounting Revision Workbook 6.3 Creditors' Reconciliation Creditors' Control Creditors’ List Balance/total 184 870 170 490 A B C D Balance/total 6.4 Identify TWO problems regarding the control over debtors. Provide relevant names and/or figures. In each case provide ONE point of advice to the owner. PROBLEM ADVICE TOTAL MARKS 35 23

Gr 12 Accounting Revision Workbook (Q2.2 Nov 2018) ACTIVITY 7: Creditors Reconciliation (21 marks; 15 minutes) 7.1 CREDITORS' LEDGER: STATEMENT OF ACCOUNT OF MARITI ACCOUNT SUPPLIERS Balance 147 820 145 060 (a) (b) (c) (d) (e) (f) 13 7.2 The internal auditor insists that direct payments (EFTs) must be used to pay suppliers. Explain ONE reason to support his decision. 2 Explain ONE internal procedure to ensure control over this system. 2 7.3 Besides dismissing Vernon, provide ONE suggestion for action to be taken against him. Provide ONE suggestion to prevent this problem in future. 4 TOTAL MARKS 21 24

Gr 12 Accounting Revision Workbook (Q1, May/June 2019) ACTIVITY 8: Bank Reconciliation (20 marks; 15 minutes) 8.1 Calculate the correct Bank Account balance on 31 May 2019. Provisional Bank balance R19 400 Favourable/Unfavourable: 9 8.2 Bank Reconciliation Statement on 31 May 2019 DEBIT CREDIT 7 8.3 State TWO internal control measures that the business can use to ensure that this will not happen in the future. 4 TOTAL MARKS 20 25

Gr 12 Accounting Revision Workbook MANUFACTURING ACTIVITY 1: Manufacturing (Nov 2016) (45 marks; 35 minutes) 1.1 1.1.1 1.1.2 1.1.3 1.1.4 4 1.2.1 Calculate direct labour cost. 8 Calculate direct material cost. 6 1.2.2 Production Cost Statement for the year ended 29 February 2016: Prime cost Cost of production of finished goods 8 26

Gr 12 Accounting Revision Workbook 1.2.3 Calculate the break-even point for 2016. 5 Explain whether the owner should be concerned or not. Provide figures. 3 1.2.4 The owner is not satisfied with the internal control of the raw material (fabric). STOREROOM: FACTORY: Raw material stolen Raw material wasted CALCULATION: metres of fabric STRATEGY 11 TOTAL MARKS 45 27

Gr 12 Accounting Revision Workbook ACTIVITY 2: Manufacturing (June 2016) (50 marks; 40 minutes) 2.1 ABE ACCESSORIES 2.1.1 Factory Overhead Cost Note 15 2.1.2 Production Cost Statement for the year ended 29 February 2016 Direct material 350 000 Direct labour cost Prime cost/Direct cost Factory overhead cost Total cost of production Cost of production of finished goods 8 28

Gr 12 Accounting Revision Workbook 2.2 NEW FASHION MANUFACTURERS 2.2.1 Gloria is concerned about the wastage of direct materials. Calculate the number of metres of fabric that was wasted. 5 Gloria feels that the wastage is significant. Provide a calculation to support her opinion. 3 2.2.2 Give TWO possible reasons for this wastage and, in EACH case, give advice to prevent this from happening in future. Reason Advice 1. 2. 4 2.2.3 Calculate the break-even point for the year ended 29 February 2016. 4 Explain why the business should be satisfied with the number of units made during the current financial year. State TWO points. 4 29

Gr 12 Accounting Revision Workbook 2.2.4 What effect will it have on the production cost of a dress? Provide a calculation to support your answer. 3 State TWO other consequences of importing the direct material. 4 TOTAL MARKS 50 30

Gr 12 Accounting Revision Workbook ACTIVITY 3: Manufacturing (Nov 2017) (55 marks; 45 minutes) 3.1 GEVEN MANUFACTURERS 3.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2017 Direct material cost Direct labour cost Prime cost Factory overhead cost Total cost of production 14 3.1.2 ABRIDGED INCOME STATEMENT FOR YEAR ENDED 28 FEBRUARY 2017 Sales Cost of sales Gross profit Administration cost Selling and distribution cost Net profit 14 31

Gr 12 Accounting Revision Workbook 3.2 GYMWEAR MANUFACTURERS 3.2.1 Shirts: Calculate the break-even point for shirts. 4 Identify ONE variable cost (with figures) that has not been well controlled. Give TWO possible reasons for this problem. ONE VARIABLE COST REASONS WITH FIGURES Reason 1: Reason 2: 4 Explain why Jan might be concerned about the large decreases in the other TWO variable costs. 4 Jan does not understand why the unit cost of production has increased when neither his fixed costs nor the variable costs have increased. Explain why this is so. State ONE point (with figures). 4 32

Gr 12 Accounting Revision Workbook 3.2.2 Shoes: Calculate the % increase in the selling price of shoes. 3 Jan decided to improve the quality of the shoes and to export them. Explain how the direct material costs and the selling and distribution costs were affected by this decision. Provide figures. 4 Jan was concerned that the increase in price would have a negative impact on the business. Explain whether his concern was justified. State TWO points. Point 1: Point 2: 4 TOTAL MARKS 55 33

Gr 12 Accounting Revision Workbook ACTIVITY 4: Manufacturing (Mar 2018) (45 marks; 35 minutes) 4.1 GLAMOUR DRESS CREATIONS 4.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2017 Prime cost Total manufacturing cost Work-in-process (1 March 2016) 76 000 Production cost of finished goods 21 4.1.2 Calculate the net profit for the year ended 28 February 2017. 7 4.2 LIGHTING SOLUTIONS 4.2.1 Calculate the factory overhead cost per unit for the year ended 31 December 2017. 2 4.2.2 Explain why George would not be concerned about the 28,1% increase in total variable cost from R936 000 to R1 200 000. 3 34

Gr 12 Accounting Revision Workbook 4.2.3 Give TWO reasons for the increase in the selling and distribution cost per unit. 2 4.2.4 Calculate the break-even point for the year ended 31 December 2017. 4 Comment on the production level for 2017. State TWO points. Quote figures. 4 4.2.5 Lighting Solutions are considering importing raw materials because it is cheaper and of a higher quality. Name TWO aspects that they must consider before finalising their decision. 2 TOTAL MARKS 45 35

Gr 12 Accounting Revision Workbook ACTIVITY 5: Manufacturing (Mar 2017) (45 marks; 35 minutes) 5.1 MOSES MANUFACTURERS 5.1.1 PRODUCTION COST STATEMENT ON 30 APRIL 2016 Direct labour cost 716 960 Prime cost Total manufacturing cost Work in process at beginning of year 142 000 Cost of production of finished goods 16 5.1.2 Complete the abridged (shortened) Income Statement to calculate the net profit for the year ended 30 April 2016. Gross profit 1 250 000 Net profit 8 36

Gr 12 Accounting Revision Workbook 5.2 UNIT COSTS AND BREAK-EVEN ANALYSIS 5.2.1 Explain the difference between fixed cost and variable cost. 2 5.2.2 Calculate the break-even point for 2017. 5 5.2.3 Comment on the break-even point and the level of production for 2016 and 2017. Explain why the owner should be satisfied or not. 6 5.2.4 Identify the variable cost that should be of great concern to the owner. Explain and provide a calculation to support your answer. 4 5.2.5 Despite the fact that there was a decrease in the fixed costs per unit, the owner is still not satisfied with his control over the fixed costs. Explain and provide calculation(s) to support his opinion. 4 TOTAL MARKS 45 37

Gr 12 Accounting Revision Workbook (Q1, Nov 2018) ACTIVITY 6: Manufacturing (40 marks; 30 minutes) 6.1 6.1.1 6.1.2 6.1.3 3 6.2 KRIGE SHIRTS 6.2.1 Calculate direct labour cost. 9 6.2.2 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 31 JULY 2018 Direct material cost 528 300 Prime cost Total production cost Work-in-progress (1 August 2017) Cost of production of finished goods 12 38

Gr 12 Accounting Revision Workbook 6.3 GEMMA'S MANUFACTURERS 6.3.1 Calculate the break-even point for the year ended 31 August 2018. 5 6.3.2 Compare and comment on the break-even point and the production level achieved over the last two years. Quote figures. 6 6.3.3 Give TWO reasons for the increase in direct material cost. Suggest ONE way to control this cost. REASONS: SUGGESTION: 5 TOTAL MARKS 40 39

Gr 12 Accounting Revision Workbook (Q3, May/June 2019) ACTIVITY 7: Manufacturing (40 marks; 30 minutes) 7.1 7.1.1 7.1.2 7.1.3 7.1.4 4 7.2.1 Calculate: The value of the closing stock using the first-in-first-out stock valuation method Workings Answer 5 Calculate: Direct material cost  Workings Answer  4 7.2.2 Factory overhead cost TOTAL b/f 84 330 8 7.2.3 Provide evidence (figures) to justify his concern. In each case, also give a possible reason for the increase in EACH unit cost, apart from normal inflation. COST EVIDENCE REASON Total fixed cost per unit Direct labour cost per unit 6 40

Gr 12 Accounting Revision Workbook 7.2.4 Calculate the break-even point on 31 December 2018. Workings Answer 4 Explain whether or not there was any improvement in the trends of the level of production and the break-even point from one year to the next. Quote figures. 4 The owner cannot understand why he is making a better profit this year. Explain how this happened. Provide TWO points. Quote figures. 5 TOTAL MARKS 40 41

Gr 12 Accounting Revision Workbook BUDGETS ACTIVITY 1: Budgeting (June 2016) (40 marks; 30 minutes) 1.1 (a) Operating profit (b) Cost of sales (c) Wages (d) Rent income 12 1.2.1 Calculate the monthly salary due to the sales manager in June 2016. 4 1.2.2 Calculate the total credit sales expected in July 2016. 4 42

Gr 12 Accounting Revision Workbook 1.2.3 Calculate the cost price of the new vehicle purchased on 1 May 2016. 4 1.3 Comment on the control of telephone and water and electricity. What advice would you offer Susan? State ONE point. Comment: Advice: 4 1.4 Susan wants to reduce the maintenance budget to R500 per month and then use this saving for staff training. What should she consider before making this change? State TWO points. 4 43

Gr 12 Accounting Revision Workbook 1.5 Explain how Susan responded to this threat. State THREE points. Provide figures/calculations to support your answer. 6 Explain whether Susan's response was successful or not. Provide figures. 2 TOTAL MARKS 40 ACTIVITY 2: Budgeting (Nov 2016) (40 marks; 30 minutes) 2.1.1 TWO items recorded incorrectly in the Cash Budget: 2 2.1.2 TWO items in the Cash Budget that would NOT appear in a Projected Income Statement: 2 44

Gr 12 Accounting Revision Workbook 2.2 DEBTORS' COLLECTION SCHEDULE MONTHS CREDIT SALES SEPTEMBER OCTOBER July 120 000 8 400 August 151 200 60 480 September 172 800 86 400 October 155 280 9 2.3 AMOUNTS FOR THE CASH BUDGET WORKINGS AMOUNT (a) Cash sales for September (b) Payments to creditors for October (c) Directors' fees for October (d) Interest on loan for October 18 45

Gr 12 Accounting Revision Workbook 2.4.1 The directors changed the method of payment to the salespersons. Explain how this has benefitted the salespersons. Quote figures. Explain how this has benefitted the business. Quote figures. 4 2.4.2 The directors are not concerned about the overspending on packing material. Explain why this is so. Quote figures or calculations. 5 TOTAL MARKS 40 46

Gr 12 Accounting Revision Workbook ACTIVITY 3: Budgeting (March 2017) (40 marks; 30 minutes) 3.1 Calculate the expected monthly percentage of goods sold on credit. 4 3.2 Debtors Collection Schedule for March 2017 MONTH CREDIT SALES FEBRUARY MARCH December 2016 74 000 16 280 January 2017 68 000 27 200 * February 2017 70 000 24 010 * March 2017 64 000 * Cash from debtors 67 490 * 5 3.3.1 Explain why the owner is concerned. Give TWO reasons with supporting figures. 4 3.3.2 Suggest ONE solution for this problem. 2 47

Gr 12 Accounting Revision Workbook WORKINGS ANSWER 3.4.1 Payment to (a) creditors 6 Salaries of (b) sales assistants 5 3.4.2 Calculate the percentage increase in rent on 1 March 2017. 4 3.4.3 Calculate the amount of the interest on investment expected to be received in March 2017. 4 3.5 Identify TWO payments that you consider to be poorly managed in February 2017. In EACH case, give a suggestion to improve the internal control of the items identified. PAYMENT ADVICE 6 TOTAL MARKS 40 48

Gr 12 Accounting Revision Workbook ACTIVITY 4: Budgeting (June 2017) (45 marks; 35 minutes) 4.1 Comment on the control of EACH item and give ONE point of advice in each case. COMMENT ADVICE Telephone Staff training 4 4.2 Identify TWO items incorrectly entered in the Cash Budget. 2 4.3 CREDITORS' PAYMENT SCHEDULE CREDIT MONTH MAY JUNE PURCHASES March R64 000 6 400 April R72 000 10 800 May 57 000 June R96 000 74 200 9 49

Gr 12 Accounting Revision Workbook 4.4 CALCULATION AMOUNT Cash sales (i) Cash purchases of stock (ii) Delivery expenses (iii) Salaries and wages (iv) Repayment of loan (v) Cash at end of month (vi) Cash deficit for the month (vii) 21 50

Gr 12 Accounting Revision Workbook 4.5 Piet wants to save on costs by not offering a free delivery service. Is this a good idea? Explain. 3 4.6 Explain ONE advantage and ONE disadvantage of each option. OPTION ADVANTAGE DISADVANTAGE Raise a new loan Hire (lease) the assets from Computer Solutions Ask a friend to become equal partner 6 TOTAL MARKS 45 51

Gr 12 Accounting Revision Workbook ACTIVITY 5: Budgets (Nov 2017) (30 marks; 25 minutes) 5.1 Explain the main purpose of a Cash Budget. Explain the main purpose of a Projected Income Statement. 2 5.2.1 Larry expects debtors to settle accounts by the end of the month following the sales transaction month. Use the November figures to calculate the % of debtors that are expected to comply with the credit terms. Use the November figures to calculate the % of bad debts expected. 9 5.2.2 Larry does not believe that his debtors' control clerk, Shirley, deserves a bonus on 31 October 2017. Provide evidence to support his opinion. Offer Larry advice to improve debtors' collections (TWO points). Point 1: Point 2: 4 52

Gr 12 Accounting Revision Workbook 5.3.1 Calculate the fixed % of sales used by Larry to budget for delivery expenses. Calculate the amount of the loan to be repaid on 31 December 2017. 6 5.3.2 Refer to variances in Information D. Explain why Larry would feel that all these variances are problems for his business. COMMENT ON VARIANCES Sales Advertising Packing materials Delivery expenses 9 TOTAL MARKS 30 53

Gr 12 Accounting Revision Workbook ACTIVITY 6 Projected Income Statement (March 2018) (45 marks; 35 minutes) 6.1.1 Calculate the mark-up percentage on spare parts used in the Projected Income Statement for March 2018. 3 6.1.2 Calculate the % decrease in service fee income expected in April 2018. 3 6.1.3 Calculate the additional space (in square metres) the business will rent from April 2018. 4 6.1.4 Calculate the interest rate on the fixed deposit. 5 6.2 Comment on the control of stock and explain how Vusi intends to correct this. Quote figures. 4 54

Gr 12 Accounting Revision Workbook 6.3.1 Vusi is thinking of purchasing the business premises rather than renting it. State ONE advantage and ONE disadvantage of this option. Advantage: Disadvantage: 4 6.3.2 Vusi offers a free delivery service of spare parts to customers, but plans to discontinue this service on 31 March 2018. State TWO points to support this decision. 4 6.3.3 Calculate the cost of the new vehicle that he plans to purchase on 1 April 2018. 4 55

Gr 12 Accounting Revision Workbook 6.4.1 Explain whether Water and electricity has been well controlled, or not. 3 6.4.2 Explain whether you agree with Vusi's decision not to use the full budget for Advertising. 3 6.4.3 Explain whether Consumable stores have been well controlled, or not. 4 6.4.4 Explain how Vusi's decision about the mark-up percentage on spare parts has affected the business. 4 TOTAL MARKS 45 56

Gr 12 Accounting Revision Workbook (Q6, Nov 2018) ACTIVITY 7: Cash Budgets (35 marks; 30 minutes) 7.1 Debtors' Collection Schedule for October 2018 MONTHS CREDIT SALES SEP. 2018 OCT. 2018 July 369 600 81 312 August 384 400 211 420 September 403 200 76 608 October 420 000 369 340 7 7.2 Calculate: (i) Cash sales for September Workings Answer (ii) Rent income for October Workings Answer (iii) Payments to creditors in October Workings Answer 9 7.3 Calculate the % increase in salaries of sales assistants for October 2018. Workings Answer 3 Explain whether the sales assistants should be satisfied with this increase. 2 57

Gr 12 Accounting Revision Workbook 7.4 Refer to Information E. 7.4.1 Explain the effect of the new competitor on any TWO items in the budget for September. Provide figures. 4 7.4.2 Identify TWO changes Donald implemented in October in response to the new competitor. Quote figures. Give ONE reason for EACH change. Item (with figures) Possible reason 6 7.4.3 Explain why Donald feels that his decisions were successful. Provide TWO points (with figures). Point 1 Point 2 4 TOTAL MARKS 35 58

Gr 12 Accounting Revision Workbook (Q6, May/Jun 2019) ACTIVITY 8: Budgets (30 marks, 25 minutes) 8.1 Identify TWO items in the Cash Budget that will not appear in a Projected Income Statement. 2 8.2 (i) Calculate: Rent income, June 2019 Workings Answer (ii) Calculate: Fixed deposit: Protea Bank, July 2019 Workings Answer (iii) Calculate: Cash purchases of trading stock, July 2019 Workings Answer 7 8.3 Calculate the total purchases for April 2019. Workings Answer 2 8.4 DEBTORS' COLLECTION SCHEDULE CREDIT SALES JUNE JULY MAY 576 000 374 400 JUNE 159 030 JULY 855 000 TOTAL 533 430 8 59

Gr 12 Accounting Revision Workbook 8.5.1 Comment on the following (provide figures): Effect of the advertising on sales 3 Payment to creditors 2 8.5.2 Identify TWO strategies (except advertising) that the business used to achieve sales targets for May 2019. Quote figures. 4 Explain whether these were good strategies, or not. Provide ONE point with figures. 2 TOTAL MARKS 30 60

Gr 12 Accounting Revision Workbook VAT ACTIVITY 1: VAT (March 2016) (15 marks; 10 minutes) VAT CONCEPTS 1.1.1 1.1.2 1.1.3 3 1.2 VAT CALCULATIONS Calculate the correct amount of VAT the business has to pay. Show ALL workings. 12 TOTAL MARKS 15 61

Gr 12 Accounting Revision Workbook ACTIVITY 2: VAT (June 2016) (17 marks, 10 minutes) 2.1 2.1.1 2.1.2 2.1.3 3 2.2.1 Calculate the VAT amount that is either payable to or receivable from SARS. 12 2.2.2 What comment would you offer Nelson concerning this practice? State ONE point. 2 17 ACTIVITY 3: VAT (Nov 2016) (10 marks; 8 minutes) Calculate the amount receivable from or payable to SARS for VAT on 31 August 2016. Receivable/Payable: 10 62

Gr 12 Accounting Revision Workbook ACTIVITY 4: VAT (March 2017) (14 marks; 10 minutes) 4.1 CONCEPTS 4.1.1 3 4.1.2 4.1.3 4.2 VALUE-ADDED TAX (VAT) 4.2.1 Calculate the amount of VAT either receivable from or payable to SARS on 31 July 2016. Receivable/Payable: __________________ 9 4.2.2 The owner wants to change the VAT amount on bad debts from R840 to R4 200. Give ONE reason why you would disagree with him. 2 TOTAL MARKS 14 63

Gr 12 Accounting Revision Workbook Activity 5: VAT (March 2018) (15 marks; 10 minutes) 5.1 Calculate the VAT amount that is either receivable from or payable to SARS on 31 July 2017. 11 5.2 Nomvula has ordered goods with a marked price of R35 000 from Beta Suppliers. The sales director of Beta Suppliers, Jim Frow, has offered to sell these goods to Nomvula for R15 000, provided that they do not have to issue an invoice. Comment on the offer made by Jim. State TWO points. 4 TOTAL MARKS 15 64

Gr 12 Accounting Revision Workbook ACTIVITY 6: VAT (MCED, June 2018) (30 marks; 25 minutes) 6.1 Choose the correct one between brackets: 6.1.1 6.1.2 3 6.1.3 6.2 Explain the THREE different types of VAT and give an example of each? 6 6.3 Explain the difference between VAT INPUT and VAT OUTPUT. VAT INPUT VAT OUTPUT 4 65

Gr 12 Accounting Revision Workbook 6.4 Use these entries to calculate the correct amount owing to SARS/ or owed by SARS. Show your workings. 17 TOTAL MARKS 30 (Q2.1, Nov 2018) ACTIVITY 7: VAT (14 marks; 10 minutes) 7.1 WORKINGS ANSWER (a) (b) (c) (d) 10 66

Gr 12 Accounting Revision Workbook 7.2 Explain what you would say to Samson. Provide TWO points. Point 1 Point 2 4 TOTAL MARKS 14 (Q1.1, May/Jun 2019) ACTIVITY 8: VAT (13 marks; 10 minutes) 8.1 8.1.1 8.1.2 2 8.2 Calculate the amount receivable from or payable to SARS for VAT on 30 April 2019. Workings Answer Receivable/Payable: 11 TOTAL MARKS 13 67

Gr 12 Accounting Revision Workbook FIXED ASSETS (Q5.3, Nov 2018) ACTIVITY 1: FIXED ASSETS (21 marks; 15 minutes) MINDEW LIMITED 1.1 WORKINGS ANSWER (i) (ii) (iii) (iv) (v) 17 1.2 Explain how the internal auditor should check that movable fixed assets were not stolen. 2 1.3 As an independent auditor, what advice would you give? Provide ONE point. 2 TOTAL MARKS 21 68

Gr 12 Accounting Revision Workbook COMPANIES / FIN STATEMENTS / ANALYSIS ACTIVITY 1: Statement of Financial Position (Balance Sheet) ; Audit Report (June 2016) (65 marks; 50 minutes) 1.1 CONCEPTS 1.1.1 1.1.2 1.1.3 1.1.4 4 1.2 PARADISE LIMITED 1.2.1 Ordinary share capital 6 Retained income Balance at beginning of year 1 634 000 Ordinary share dividends Balance at end of year 10 69

Gr 12 Accounting Revision Workbook 1.2.2 STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 29 FEBRUARY 2016 ASSETS NON-CURRENT ASSETS Fixed deposit: Sandton Bank CURRENT ASSETS 3 538 600 TOTAL ASSETS EQUITY AND LIABILITIES ORDINARY SHAREHOLDERS' EQUITY Ordinary share capital NON-CURRENT LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL EQUITY AND LIABILITIES 35 70

Gr 12 Accounting Revision Workbook 1.3 AUDIT REPORT 1.3.1 What type of audit report did Topstar Ltd receive? Choose from the following: unqualified, qualified, disclaimer. Reason: 3 1.3.2 To whom is an audit report addressed? Reason: 3 1.3.3 Explain why the auditor mentioned IFRS in the audit report. 2 Explain why the auditor mentioned the Companies Act (Act 61 of 1973) in the audit report. 2 TOTAL MARKS 65 71

Gr 12 Accounting Revision Workbook ACTIVITY 2: Audit Report; Statement of Comprehensive Income (Income Statement) (Nov 2016) (70 marks; 55 minutes) 2.1 2.1.1 2.1.2 2.1.3 2.1.4 4 2.2 AUDIT REPORT 2.2.1 To whom is the audit report addressed? 1 2.2.2 Who has to ensure that the financial statements are prepared and presented at the annual general meeting? 1 2.2.3 Fralezi Ltd received a/an (qualified/unqualified/disclaimer of opinion) audit report. Explain your choice. 2 2.2.4 Explain why the independent auditors referred to pages 11–29 in the report. 2 72

Gr 12 Accounting Revision Workbook 2.3 FRALEZI LTD STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT) FOR THE YEAR ENDED 30 JUNE 2016 Sales Cost of sales Gross profit Other income Operating expenses Directors' fees Salaries and wages Sundry expenses Operating profit Interest income Profit before interest expense Interest expense Net profit before tax Income tax for the year Net profit after tax 504 000 TOTAL MARKS 60 70 73

Gr 12 Accounting Revision Workbook ACTIVITY 3: Company Financial Statements and Interpretation (March 2017) (75 marks; 60 minutes) 3.1 GANDHI LTD STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT) FOR THE YEAR ENDED 28 FEBRUARY 2017 Sales Cost of sales Gross profit 3 150 000 Other income Commission income 12 000 Gross income Operating expenses Salaries and wages 824 000 Depreciation 216 500 Sundry expenses Operating profit Interest income Net profit before interest expense Interest expense Net profit before tax Income tax (396 800) Net profit after tax 33 74

Gr 12 Accounting Revision Workbook 3.2.1 ORDINARY SHARE CAPITAL AUTHORISED SHARE CAPITAL 1 200 000 ordinary shares ISSUED SHARE CAPITAL Ordinary shares on 1 March 2016 3 084 000 10 3.2.2 RETAINED INCOME Balance on 1 March 2016 674 500 Ordinary share dividends Balance on 28 February 2017 10 3.3 EQUITY AND LIABILITIES SECTION OF THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) SHAREHOLDERS' EQUITY NON-CURRENT LIABILITIES CURRENT LIABILITIES TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 16 75

Gr 12 Accounting Revision Workbook 3.4.1 Calculate B Sly's percentage shareholding in the company before and after the share buy-back. Before the buy-back: After the buy-back: 4 3.4.2 Explain why the other shareholders will be concerned about this transaction. 2 TOTAL MARKS 75 76

Gr 12 Accounting Revision Workbook ACTIVITY 4: Statement of Comprehensive Income (Income Statement) and Fixed Assets (June 2017) (70 marks; 55 minutes) 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4 4.2 MTOMBENI LTD 4.2.1 Calculate: Carrying value of the vehicle sold on 30 November 2016 5 Calculate: Total depreciation on equipment on 28 February 2017 7 77

Gr 12 Accounting Revision Workbook 4.2.2 MTOMBENI LTD Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2017: Sales (5 500 000 Cost of sales (3 150 000 Operating expenses Directors' fees 380 000 Audit fees 54 000 Operating profit Interest income Net profit after interest income Net profit before tax Income tax Net profit after tax 864 000 54 TOTAL MARKS 70 78

Gr 12 Accounting Revision Workbook ACTIVITY 5: Fixed Asset, Statement of Financial Position (Balance Sheet); Audit report (Nov 2017) (65 marks; 50 minutes) 5.1 (a) Calculate the carrying value of Land and Buildings on 1 March 2016. 2 (b) Calculate the total depreciation on Vehicles on 28 February 2017. 6 (c) Calculate the carrying value of Vehicles on 28 February 2017. 4 (d) Calculate the carrying value of Equipment sold on 31 December 2016. 6 (e) Calculate the total carrying value of Fixed Assets on 28 February 2017. 4 79

Gr 12 Accounting Revision Workbook 5.2 ODETTE LTD STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 28 FEBRUARY 2017 ASSETS  NON-CURRENT ASSETS CURRENT ASSETS Inventory 408 880 Trade and other receivables Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Ordinary share capital Retained income 520 000 NON-CURRENT LIABILITIES CURRENT LIABILITIES  TOTAL EQUITY AND LIABILITIES 37 80

Gr 12 Accounting Revision Workbook 5.3 AUDIT REPORT As a shareholder, what concerns would you have regarding this audit report? Explain THREE points. Point 1: Point 2: Point 3: 6 TOTAL MARKS 65 81

Gr 12 Accounting Revision Workbook ACTIVITY 6: Statement of Financial Position (Balance Sheet); Audit Report (March 2018) (65 marks; 50 minutes) 6.1 6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 5 6.2 ORBIT LTD 6.2.1 (a) ORDINARY SHARE CAPITAL Authorised 6 000 000 shares Issued 8 (b) RETAINED INCOME Balance on 1 July 2016 874 000 Ordinary share dividends Balance on 30 June 2017 11 82

Gr 12 Accounting Revision Workbook 6.2.2 ORBIT LTD STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 30 JUNE 2017 ASSETS NON-CURRENT ASSETS Fixed/Tangible Assets Fixed deposit 380 000 CURRENT ASSETS Inventory 478 000 TOTAL ASSETS EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Ordinary share capital Retained income NON-CURRENT LIABILITIES Loan: Helping Bank CURRENT LIABILITIES Trade and other payables TOTAL EQUITY AND LIABILITIES 28 83

Gr 12 Accounting Revision Workbook 6.2.3 As a shareholder, explain your concern regarding the proposed buy-back of shares. Provide calculations to support your concern. 6 6.3 AUDIT REPORT: DF ENTERPRISES LTD 6.3.1 (a) 2 (b) 6.3.2 (a) The audit report below indicates a/an (qualified/unqualified) opinion. 1 (b) Explain why the shareholders should be concerned about this audit report. State TWO points. 4 TOTAL MARKS 65 84

Gr 12 Accounting Revision Workbook ACTIVITY 7: Cash Flow and Interpretation (Nov 2017) (85 marks, 65 minutes) 7.1 7.1.1 7.1.2 7.1.3 7.1.4 4 7.2 SO-FINE LTD 7.2.1 ORDINARY SHARE CAPITAL AUTHORISED SHARE CAPITAL 1 200 000 ordinary shares ISSUED SHARE CAPITAL 900 000 Ordinary shares on 1 September 2016 Ordinary shares on 31 August 2017 5 292 000 7 RETAINED INCOME Balance on 1 September 2016 147 370 Net profit after income tax 438 130 Ordinary share dividends ` Balance on 31 August 2017 9 85

Gr 12 Accounting Revision Workbook 7.2.2 SO-FINE LTD CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2017 CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Interest paid Dividends paid Income tax paid ? CASH FLOWS FROM INVESTING ACTIVITIES Purchases of fixed assets ? ? ? Change in investments CASH FLOWS FROM FINANCING ACTIVITIES ? ? ? ? Change in non-current liabilities Net change in cash and cash equivalents ? Cash and cash equivalents – opening balance ? Cash and cash equivalents – closing balance ? 19 7.2.3 Calculate the percentage operating profit on sales. 3 Calculate the debt-equity ratio. 4 7.2.4 Calculate the dividends per share (DPS) of a shareholder who owned the same number of shares for the entire financial period. 4 86

Gr 12 Accounting Revision Workbook 7.3 CASTRO LTD 7.3.1 Comment on the price of R9,10 charged by Castro Ltd for the new shares issued. 3 7.3.2 Explain how the issue of new shares has affected the financial gearing and risk of Castro Ltd. Quote TWO financial indicators. 6 7.3.3 If Henry wanted to retain his 60% shareholding in the company, how many shares would he have had to buy? 3 How much would he have had to pay? 2 Henry decided NOT to buy these shares. Apart from the % shareholding, explain TWO reasons why he has made a mistake by not taking up this option. Reason 1: Reason 2: 6 87

Gr 12 Accounting Revision Workbook RONKI LTD 7.3.4 Comment on the liquidity of Ronki Ltd. Quote TWO financial indicators. 6 7.3.5 Comment on the price paid by Ronki Ltd for the repurchase (buy-back) of shares. 3 7.3.6 Explain THREE ways in which Henry has benefited from the repurchase of the shares by Ronki Ltd. Point 1: Point 2: Point 3: 6 TOTAL MARKS 85 88

Gr 12 Accounting Revision Workbook ACTIVITY 8: Fixed Assets, Cash Flow and Interpretation (Mar 2018) (70 marks; 55 minutes) 8.1 NO. WORKINGS AMOUNT (a) Additions to buildings (b) Total depreciation on equipment (c) Disposal of equipment at carrying value 15 8.2.1 WORKINGS ANSWER Calculate the income tax paid. 5 8.2.2 Calculate the dividends paid. 3 8.2.3 Calculate the net change in cash and cash equivalents. 4 8.3 CASH EFFECTS OF FINANCING ACTIVITIES 10 89

Gr 12 Accounting Revision Workbook 8.4.1 Calculate the debt-equity ratio. 3 8.4.2 Calculate the earnings per share (in cents). 3 8.4.3 Calculate the return on average shareholders' equity (ROSHE). 5 8.5 Explain why the directors felt that the 630 cents offered on the shares repurchased was a fair price. Quote TWO financial indicators with figures. 4 8.6.1 The directors revised the dividend pay-out policy for the current financial year. Calculate the percentage of earnings distributed as dividends for each year to show this change. 4 90

Gr 12 Accounting Revision Workbook 8.6.2 Give ONE reason why the directors took this decision. 2 8.6.3 Explain why the shareholders may not be satisfied with the return they earn. Quote a financial indicator or figure(s). 3 8.7 Apart from the dividends, identify THREE good decisions. Explain the effect of each decision on the company. Quote figures. GOOD DECISIONS EFFECT ON COMPANY (with figures) Decision 1: Decision 2: Decision 3: 9 TOTAL MARKS 70 91

Gr 12 Accounting Revision Workbook (Q3, Nov 2018) ACTIVITY 9: Fin. Statements & Audit Reports (75 marks; 60 minutes) 9.1 9.1.1 9.1.2 9.1.3 9.1.4 4 9.2.1 TEMBISO LTD STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT) FOR THE YEAR ENDED 28 FEBRUARY 2018 Sales Cost of sales (4 856 000) Gross profit Other operating income 879 440 Gross income Operating expenses Salaries and wages 501 200 Operating profit Interest income Net profit before interest expense Interest expense Net profit before tax Income tax Net profit after tax 959 400 28 92

Gr 12 Accounting Revision Workbook 9.2.2 ORDINARY SHARE CAPITAL AUTHORISED SHARE CAPITAL 1 600 000 ordinary shares ISSUED SHARE CAPITAL 1 480 000 Ordinary shares on 28 February 2018 8 816 000 7 RETAINED INCOME Balance on 1 March 2017 376 600 Ordinary share dividends Balance on 28 February 2018 7 9.2.3 EQUITY AND LIABILITIES SECTION OF THE STATEMENT OF FIN. POSITION SHAREHOLDERS' EQUITY Ordinary share capital 8 816 000 Retained income NON-CURRENT LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 16 93

Gr 12 Accounting Revision Workbook 9.3 AUDIT REPORT 9.3.1 Point 1 Opinion 1 Point 2 IFRS and Companies Act 2 Point 3 Independent 2 9.3.2 Point 4 TWO examples of ethical responsibilities: Example 1: Example 2: 4 Point 5 TWO examples of audit evidence: Example 1: Example 2: 4 TOTAL MARKS 75 94

Gr 12 Accounting Revision Workbook (Q4, Nov 2018) ACTIVITY 10: Cash Flow and Interpretation (70 marks; 55 minutes) 10.1 CALCULATION OF FINANCIAL INDICATORS FOR 2018 10.1.1 Calculate: % operating expenses on sales Workings Answer 2 10.1.2 Calculate: Acid-test ratio Workings Answer 4 10.1.3 Calculate: % return on shareholders' equity Workings Answer 4 10.2 FIGURES FOR 2018 CASH FLOW STATEMENT 10.2.1 Calculate: Change in investments Workings Answer 2 10.2.2 Calculate: Income tax paid Workings Answer 4 10.2.3 Calculate: Fixed assets sold (at carrying value) Workings Answer 5 95

Gr 12 Accounting Revision Workbook 10.3 EXPLANATIONS ON CASH FLOW STATEMENT 10.3.1 Explain why the directors are satisfied with the improvement in cash and cash equivalents since 1 July 2016. Quote figures. 3 10.3.2 Identify THREE decisions that the directors made to pay for land and buildings. Decision 1 (with figures) Decision 2 (with figures) Decision 3 (with figures) 6 Explain how these decisions affected the capital employed in the 2018 financial year. Quote figures. Explain how these decisions affected the financial gearing in the 2018 financial year. Quote TWO indicators and their figures. 6 10.3.3 From the Cash Flow Statement identify ONE decision made by the directors in 2017 that they did NOT make in 2018, besides the points mentioned above. Give a possible reason for the decision in 2017. Decision (with figures) Possible reason 3 96

Gr 12 Accounting Revision Workbook 10.4 DIVIDENDS, RETURNS AND SHAREHOLDING 10.4.1 Calculate: Total interim dividends paid for the 2018 financial year Workings Answer Calculate: Interim dividends per share for the 2018 financial year Workings Answer 6 10.4.2 Calculate total dividends earned by Dudu Mkhize for the 2018 financial year. Workings Answer 5 10.4.3 Calculate the minimum number of additional shares that Dudu should have bought. Workings Answer 3 97

Gr 12 Accounting Revision Workbook 10.5.1 Explain why it was necessary to purchase properties in other provinces instead of in KZN. 2 Explain whether the decision to purchase these properties had the desired effect on sales. Quote figures. 3 Explain another strategy they used to solve the problem of low sales. Quote figures. 3 10.5.2 Give advice on what Ben Palo should say about the following topics: Advice on what to say on earnings per share: 3 Advice on what to say on % return earned: 3 Advice on what to say on share price on the JSE: 3 TOTAL MARKS 70 98

Gr 12 Accounting Revision Workbook (Q4, May/Jun 2019) ACTIVITY 11: Audit Report; Company Financial Statements (80 marks; 60 minutes) 11.1 11.1.1 11.1.2 11.1.3 11.1.4 4 11.2 AUDIT REPORT 11.2.1 Choose the correct word from those given in brackets. Give ONE reason. 3 11.2.2 Give ONE reason why the Companies Act requires public companies to be audited by an independent auditor. 2 11.2.3 Newspaper reports have indicated that Kego and Murray Associates have been found guilty of misconduct in terms of audit work done at several large firms. Explain how this may influence shareholders of Everest Ltd. State TWO points. 4 99

Gr 12 Accounting Revision Workbook 11.3 MVVS LTD 11.3.1 Statement of Comprehensive Income (Income Statement) for the year ended 31 March 2019 Sales Cost of sales Gross profit Operating income Rent income 99 500 Gross operating income Operating expenses Directors' fees 1 262 100 Water and electricity 218 000 Telephone 75 600 Audit fees 104 000 Sundry expenses 61 001 Operating profit Interest income Profit before interest expense Interest expense Net profit before tax 691 000 Income tax Net profit after tax 53 100

Gr 12 Accounting Revision Workbook 11.3.2 NOTES TO THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) Fixed/Tangible Assets Land and Vehicles Equipment buildings Carrying value at beginning of 12 500 000 275 000 280 500 financial year Cost 12 500 000 750 000 398 000 Accumulated depreciation - (475 000) (117 500) Movements Additions at cost - - Disposals at carrying value - - Depreciation - (94 250) Carrying value at end of 12 500 000 financial year Cost 12 500 000 1 377 000 Accumulated depreciation - 8 Ordinary share capital Authorised: 8 000 000 shares Issued: 1 200 000 shares in issue at beginning 6 TOTAL MARKS 80 101

Gr 12 Accounting Revision Workbook (Q5, May/Jun 2019) ACTIVITY 12: Cash Flow (75 marks; 60 minutes) 12.1 12.1.1 12.1.2 12.1.3 12.1.4 4 12.2 KULFI LTD 12.2.1 RETAINED INCOME NOTE: Balance on 1 March 2018 Net profit after tax Ordinary share dividends Balance on 28 February 2019 12 12.2.2 Calculate: Income tax paid Workings Answer 4 Calculate: Dividends paid Workings Answer 4 102

Gr 12 Accounting Revision Workbook 12.2.3 Cash effects of investing activities 9 Net change in cash and cash equivalents 4 12.2.4 Calculate: Acid-test ratio Workings Answer 4 Calculate: Debt-equity ratio Workings Answer 4 Calculate: % return on average shareholders' equity (ROSHE) Workings Answer 5 12.2.5 The shareholders are satisfied with the improvement in the liquidity position. Quote THREE financial indicators (with figures) to support this statement. 6 103

Gr 12 Accounting Revision Workbook 12.2.6 The company increased the share capital by R840 000, and the loan by R550 000. Explain how this affected the gearing and risk of the company. Quote TWO financial indicators. 12 Explain what the directors have done with this cash inflow. State TWO points. 4 12.2.7 Provide calculations to show the change in the pay-out rate. 4 Give ONE reason why many shareholders were satisfied with the change in policy. Quote figures. 2 12.2.8 Explain how the repurchase of the shares benefited Martha's shareholding. Quote figures. 4 TOTAL MARKS 75 104