Accounting Grade 12 Paper 2 KZN Prelim 2020 Question Paper

Downloaded from hlayiso.com education Department: Education PROVINCE OF KWAZULU-NATAL NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING P2 PREPARATORY EXAMINATION SEPTEMBER 2020 MARKS: 150 TIME: 2HOURS This question paper consists of 13 pages and an answer booklet of 9 pages.

Downloaded from hlayiso.com Accounting P2 2 Preparatory Examination September 2020 NSC INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. Answer ALL the questions. A special ANSWER BOOK is provided in which to answer ALL the questions. Show workings in order to achieve part-marks. You may use a non-programmable calculator. You may use a dark pencil or blue/black ink to answer the questions. Where applicable, show all calculations to ONE decimal point. Write neatly and legibly. oe nO a F ODN ZB Use the information and table below as a guide when answering the question. Try NOT to deviate from it. QUESTION 1: 40 marks; 32 minutes Topic of the question This question integrates: Bank Reconciliation RECONCILIATIONS AND Creditors ’ Reconciliation INTERNAL CONTROL Internal control QUESTION 2: 30 marks; 24 minutes Topic of the question This question integrates: Calculations CASH BUDGETS Cash Budget and interpretations Internal control QUESTION 3: 40 marks; 32 minutes Topic of the question This question integrates: Calculations Production Cost Statement COST ACCOUNTING Break-even calculation and interpretation Internal control QUESTION 4: 40 marks; 32 minutes Topic of the question This question integrates: Inventory valuation INVENTORY VALUATION, Problem solving PROBLEM-SOLVING AND . , FIXED ASSETS Recording of Fixed Assets Internal control Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting P2 3 Preparatory Examination September 2020 QUESTION 1: RECONCILIATION AND INTERNAL CONTROL NSC 1.1 BANK RECONCILIATION The following information relates to Shoes Suppliers for July 2020. REQUIRED: 1.1.1. Show the entries that must be recorded in the Cash Journals by completing the table provided in the ANSWER BOOK. 1.1.2 Prepare the Bank Reconciliation Statement on 31 July 2020. 1.1.3 As the internal auditor you are not happy with the manner in which cash is being controlled in this business. e Identify TWO problems. Quote figures to support your answer. e Give advice on how each of these problems can be avoided in future. INFORMATION: A. Bank Reconciliation Statement on 30 June 2020: Favourable balance as per Bank Statement R 18 450 | Outstanding deposits: | Dated 10 June 2020 R 25 000 | ee Dated 25 June 2020 R 12 670 | Outstanding Cheques: | No. 502 (dated 19 January 2020) R 4 800 No. 613 (dated 24 July 2020) R 13 400 a No. 614 (dated 29 July 2020) R 6 950 Favourable balance as per Bank Account in the Ledger R 31970 Copyright reserved On 31 July 2020, the provisional totals in the Cash Journals were: « Cash Receipts Journal, R504 350 e Cash Payments Journal , R487 330 On comparing the July 2020 Bank Statement, received from Sure Bank, with the Bank Reconciliation Statement of June 2020, the following were noted: e The outstanding deposit of R12 670 appeared on the bank statement. e Cheque No. 614, R6 950, was presented for payment. e Cheque No’s 502 and 613 did not appear on the Bank Statement for July 2020. Note: The outstanding deposit of R25 000 did not appear on the Bank Statement for July 2020. An investigation revealed that this money was never deposited. The cashier cannot account for the cash. The following items appeared only on the Bank Statement for July 2020: e Bank charges, R1 420 e Interest on favourable bank balance, R150 e A direct deposit of R6 250 from a tenant appeared twice on the Bank Statement. The bank will rectify this on the Bank Statement next month. e A debit order of R1 850 for the monthly insurance (40 marks; 32 minutes) (9) (9) (6) Please turn over

Downloaded from hlayiso.com Accounting P2 4 Preparatory Examination September 2020 | NSC E. Cheque No. 633 appeared correctly on the Bank Statement as R 6 230. The Cash Journal shows it as R2 630. F. The following entries were in the Cash Journals for July 2020 only: ¢ Adeposit of R11 850 (dated 24 July 2020) e Cheque No. 652, R5 650 (dated 31 July 2020) e Cheque No. 655, R1 440 (dated 18 August 2020) G. The Bank Statement shows a favourable balance of R43 210 on 31 July 2020. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting P2 5 Preparatory Examination September 2020 NSC 1.2 CREDITORS RECONCILIATION The Creditors’ Control account and Creditors’ List of Khoza Traders were prepared by an inexperienced bookkeeper. He identified the following figures at the end of the month: e Creditors’ control balance, R74 710 ¢ Creditors list total, R32 590 REQUIRED: 1.2.1 Briefly explain how the preparation of a creditors’ reconciliation as an internal control measure can assist the business in managing their creditors effectively. Provide TWO points. (4) 1.2.2 Use the table provided to indicate the changes that must be made in the Creditors’ Control account and Creditors’ List to take into account the errors and omissions noted. Indicate the increase or decrease with a (+) or (-) with each amount. (8) 1.2.3. Refer to information B. An investigation into the transaction relating to the credit purchase from Station Ltd revealed that Thabani Zungu (purchasing manager) ordered goods for himself. These goods were not taken into stock. State TWO internal control measures that the business can use to prevent similar incidents from happening in future. (4) INFORMATION: Errors and omissions noted: A. The total of the Creditors’ List was undercast by R900. B. A credit purchase from Station Ltd for R3 720 was not recorded in the books of the business. C. Trading stock returned to Malinga Ltd, R720, was entered correctly in the Creditors Allowances Journal (CAJ), but was posted as R270 to the Creditors’ account of Malinga Ltd. D. — The Creditors Control total in the Cash Payments Journal is R16 400. The bookkeeper credited this to the Creditors Control account by mistake. E. An invoice for R8 870 for stock purchased from Zondi Market on account has been correctly recorded in the Creditors Journal, but has not been posted to their account in the Creditors ledger. 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting P2 QUESTION 2 CASH BUDGETS 6 Preparatory Examination September 2020 NSC (30 marks, 24 minutes) You are provided with an incomplete Cash Budget of Kwadambuza Traders. The business is owned by Florence Mthiyane. REQUIRED: 2.1 Complete the Debtors’ Collection Schedule for October 2020. (4) 2.2 Calculate the amount of bad debts that will be written off in October 2020. (3) 2.3 The owner wants to improve the collection from debtors. Mention TWO strategies that the business can use to encourage debtors to pay their accounts on time. (4) 2.4 Calculate the missing figures indicated by (i) — (v) on the Cash Budget. (11) 2.5 The rent will increase on 1 October 2020. Calculate the percentage increase. (3) 2.6 Interest on loan is paid on the last day of each month and is not capitalised. Calculate the loan balance on 1 September 2020. (3) 2.7 Give a reason for the entry for Fixed Deposit, R44 000 in October 2020. (2) INFORMATION: A. Actual and budgeted sales and cost of sales: MONTH TOTAL SALES Actual: July 2020 462 000 August 2020 396 000 Budgeted: September 2020 _ 372 000 October 2020 438 000 NOTE: ¢ 60% of the total sales are for cash. e Mark-up is 50% on cost. B. Debtors’ Collection Schedule: MONTH CREDIT SALES | SEPTEMBER | OCTOBER July 2020 _ 184 800 33 264 August 2020 158 400 110 880 ? September 2020 148 800 14 880 ? October 2020 175 200 ? 159 024 ? Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting P2 7 Preparatory Examination September 2020 NSC c. Debtors currently pay according to the following trend: 10% paid in the month of sale 70% paid in the first month following the month of sale 18% paid in the second month following the month of sale The balance is written off in the third month following the month of sale. D. The business maintains a fixed level of stock through monthly purchases. E. 50% of the total purchases are on credit. Creditors are paid in the month following the month of purchase to take advantage of a 5% discount. F. Cash Budget for the two months ending 31 October 2020: SEPTEMBER | OCTOBER | RECEIPTS Cash sales _ ee) 262 800 | Collection from debtors _ 159 024 ? Rent income ___5 500 6 160 | Fixed deposit (including interest) 44 000 TotalReceipts PAYMENTS _ Cash purchases of trading stock 124 000. (ii) Payments to creditors (for stock) iii 117 800 | Salary — store manager _ _ 12 000 13 800 Salaries — 5 shop assistants 15 000 15 675 | Telephone _ 3410 4200 | Advertising _ _ 19 800 12 000 Loan instalment. _ |. 20 000 Interest on loan (15% p.a) 1875 1625 Deposit on motor vehicle : _ 44000 | Drawings See Instalment on motor vehicle . 43 200 (12 equal instalments) ae | Other operating expenses _ _ 34 075 51 262 Total Payments _ CASH SURPLUS/ DEFICIT) (24 800) 38 600 BANK AT BEGINNING OF MONTH 11 200 (iv) BANK AT END OF MONTH (13 600) (v) 30 Copyright reserved Please turn over

Downloaded from hlayiso.com | Accounting P2 8 Preparatory Examination September 2020 | NSC | | QUESTION 3: COST ACCOUNTING (40 marks; 32 minutes) 3.1. MZUZU MANUFACTURERS Mzuzu Manufacturers is a manufacturing business that produces one style of jersey. The financial year ended on 30 June 2020. REQUIRED: 3.1.1 Calculate the following: « Direct material cost e Direct labour cost 3.1.2 Prepare the Production Cost Statement. 3.1.3 The owner is of the opinion that the workers are not properly supervised. ¢ Identify TWO separate problems relating to the supervision of workers. Quote figures to support your answer. e In EACH case, provide a solution. INFORMATION: A. Stock balances: 30 JUNE 2020} 1 JULY 2019 Raw material stock R 314 550 R115 200 Work-in-progress stock ? 22 400 B. Raw materials are purchased only on credit. Invoices totaling R723 600 were received for the financial year. Cc. The business employs FIVE factory workers, with the following conditions: ¢ They must work 8 hours normal time per day for 5 days a week, e 48 weeks a year, and ¢ They must produce two jerseys an hour during normal and overtime. Details relating to total number of hours worked by workers and remuneration rates for the financial year ended 30 June 2020: HOURS RATE NUMBER OF PER PER WORKERS TOTAL WORKER HOUR Normal time 1 680 R47 5 2 Overtime 1 152 R94 5 R 541 440 2 832 ? NOTE: Employers’ contribution: 11,5% of normal wage. D. Factory overhead cost for the financial year amounted to R117 688. E. Additional information Copyright reserved The business produced 22 400 jerseys during the financial year, at a unit cost of R60. (4) (8) (9) (6) Please turn over

Downloaded from hlayiso.com Accounting P2 9 Preparatory Examination September 2020 3.2 Copyright reserved NSC MNAND!I MANUFACTURERS Mnandi Manufacturers is a manufacturing business that produces one type of health bars. The financial year ended on 31 July 2020. Production is based on orders received; therefore there are no work-in-progress balances. REQUIRED: 3.2.1. The owner wants to know if the level of production for this year was satisfactory. e Calculate the break-even point for the year ended 31 July 2020. ¢ Do you consider the level of production to be satisfactory or not? Explain by quoting figures to support your opinion. 3.2.2 The owner is concerned about the management of the variable costs. e Identify ONE problem regarding the variable costs. Quote appropriate figures to support your answer. (4) (3) e Provide TWO solutions for the problem identified. (6) INFORMATION ON 31 JULY: 2020 2019 TOTAL UNIT TOTAL UNIT (R) COST (R) (R) COST (R) Fixed cost 278 400 2,90 277 200 3,30 Variable cost 41 128 000 11,75 831 600 9,90 Direct material cost 518 400 5,40 327 600 3,90 Direct labour cost 451 200 4,70 369 600 4,40 Selling and distribution cost 158 400 1,65 134 400 1,60 Selling price per unit R15,50 R14,50 Number of units produced and sold 96 000 84 000 Break- even point (units) 2? 60 261 40 Please turn over

Downloaded from hlayiso.com Accounting P2 10 Preparatory Examination September 2020 NSC QUESTION 4: INVENTORY VALUATION , PROBLEM-SOLVING AND FIXED ASSETS (40 marks; 32 minutes) 4.1 HAT LIFE STYLE Hat Life Style sells fashionable hats. The financial year ended on 29 February 2020, REQUIRED: 4.1.1 Calculate the number of hats on-hand on 29 February 2020. (3) 4.1.2 Calculate the value of the final stock on-hand on 29 February 2020 using the weighted-average method. (7) INFORMATION: A. Stocks on hand: UNIT PRICE DATE NO OF UNITS | (including TOTAL carriage) 1 March 2019 100 R40 R4 000 29 February 2020 ? ? 2? B. Purchases for the financial year ended 29 February 2020: DATE NO OF UNITS | UNIT PRICE TOTAL April 2019 100 R50 R5 000 July 2019 150 R60 R9 000 October 2019 200 R90 R18 000 February 2020 50 R120 R6 000 TOTAL 500 : R38 000 Cc. Carriage on purchases was fixed at R2.40 per unit for the entire financial period. D. 510 units were sold at a fixed selling price of R150 per unit. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting P2 4.2 SHAPE FOR WOMEN: 41 Preparatory Examination September 2020 NSC The following information relates for the financial year ended 31 March 2020. REQUIRED: 4.2.1 Calculate the number of days of stock on-hand for Gym Bags. Gym Bags are sold at a mark-up of 25% on cost. The average stock amounted to R79 903. (5) 4.2.2 \dentify ONE different problem in respect of the manner in which each product is managed. Quote figures to support your answer. In each case offer practical advice. (9) INFORMATION: A. Information (in units) for each product: Sweatbands Towels Gym Bags Opening stock 120 80 150 Purchases 5 600 960 4.200 Sales 4 800 840 930 Closing stock 810 200 420 B. Other relevant information for each product: Sweatbands Towels Gym Bags Selling price per unit R45 R125 R350 Stock holding period 50 days 70 days 4.2.1 Cash deposited R216 000 100 000 R325 500 Copyright reserved Please turn over

Accounting P2 Downloaded from hlayiso.com 12 Preparatory Examination September 2020 NSC 4.3 FIXED ASSETS The following appeared in the books of Tom and Sons the end of the financial year. REQUIRED: Calculate the missing amounts indicated b Asset Note for the year ended 29 February 2020. INFORMATION A. Fixed/Tangible Assets: on 29 February 2020, y (i) — (iv) in the Fixed/Tangible Vehicles Equipment Cost price 1470 000 Accumulated depreciation (1 290 000) (350 000) Carry value on 1 March 2019 180 000 Movements: Additions at cost 240 000 54 000 Disposal at carry value - (iii) Depreciation (ii) (46 275) Carry value on 29 February 2020 Cost price (i) 755 000 Accumulated depreciation (iv) Vehicles: ° Depreciation: 15% p.a. on the cost price. . A new vehicle for R240 000 was purchased on 1 January 2020. Equipment: . Depreciation: 10% p.a. on the diminishing value method. . New equipment costing R54 000 was purchased 1 July 2019. ° Equipment with a cost price of R85 000 was sold at its carrying value on 1 December 2019. On 1 March 2019 the accumulated depreciation on this equipment was R48 000. Copyright reserved (16) 40 TOTAL MARKS: 150 Please turn over

Downloaded from hlayiso.com 13 Accounting P2 NSC Preparatory Examination September 2020 GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit X 100 Gross profit X 100 Net profit before tax X 100 Sales 1 Cost of sales 4 Sales 1 Net profit after tax X 100 Operating expenses X 100 Operating profit X 100 4 Sales 1 Sales a Sales Total assets : Total liabilities Current assets : Current liabilities (Current assets — Inventories) : Current liabilities Average trading stock X 365 Cost of sales 4 (Trade and other receivables + Cash and cash equivalents) : Current liabilities Average debtors X 365 Credit sales 1 Cost of sales Average trading stock 365 Average creditors X 365 Trading stock X 365 Cost of sales 1 Average creditors X Credit purchases 365 4 Cost of sales 1 Net profit after tax X 100 Long-term liabilities : Shareholders’ equity Number of issued shares a Net income after tax X 100 Average shareholders’ equity 1 x 100 Net income after tax + Interest on loans Average Shareholders’ equity + Average Long-term liabilities Shareholders’ equity X 100 4 Number of issued shares Number of issued shares Dividends for the year_ X 100 Dividends pershare X 100 1 Earnings per share 1 Copyright reserved