Accounting Grade 12 Paper 1 KZN June 2022 Question Paper

EDUCATION REPUBLIC OF SOUTH AFRICA NATIONAL SENIOR CERTIFICATE GRADE 12 Poo gm le : ACCOUNTING P14 : : COMMON TEST " " JUNE 2022 : rere rerrrrrerrrrrrerrert tte rte rrr rr tree rer ree? oa MARKS: 150 TIME: 2 hours This question paper consists of 9 pages, a formula sheet and an 8-page Answer Book. Copyright Reserved _ Please Turn Over__

Downloaded from hlayiso.com June 2022 Common Test Accounting P4 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL the questions. 2. Aspecial ANSWER BOOK is provided in which to answer ALL the questions. 3. | Show ALL workings to earn part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or blue/black ink to answer the questions. 6. Where applicable, show ALL calculations to ONE decimal point. 7. If you choose to do so, you may use the Financial Indicator Formula Sheet attached at the end of this question paper. The use of this formula sheet is NOT compulsory. 8. Write neatly and legibly. 9. Use the information and table below as a guide when answering the question. Try NOT to deviate from it. QUESTION TOPIC MARKS MINUTES 1 Statement of Comprehensive Income 50 40 2 Tangible note and Cash Flow Statement 50 40 3 Audit report and Interpretation 50 40 TOTAL 150 120 Copyright Reserved Please Turn Over

Downloaded from hlayiso.com Accounting P1 3 June 2022 Common Test NSC QUESTION 1 (50 Marks; 40 Minutes) STATEMENT OF COMPREHENSIVE INCOME PALM LTD You are provided with information taken from the financial records of Palm Ltd. The end of the financial year, 28 February 2022. All goods are sold at a fixed mark-up of 50% on cost. REQUIRED: 1.1 Complete the Statement of Comprehensive income for the year ended -� 2 Febr Certain amounts have been entered in the Statement (45) d income note to the Statement of Financial Position on (5) LANCES/TOTALS ON 28 FEBRUARY 2022 Balance Sheet Accounts Section R Retained income 1 March 2021 700 000 Mort a e loan (interest rate: 12% 975 000 Fixed de osit interest rate: 8, 5% 520 000 Tradin stock 1 534 000 Debtors control 280 200 Provision for bad debts (1 March 2021 18 524 SARS: income tax rovisional tax a ments 110 000 Nominal Account Section Sales 15 472 000 Cost of sales ? Debtors allowances 70 000 Directors fees 2 983 500 - Audit fees 79 000 13 600 123 000 - 292 330 - - iiii Bad debts 12 100 iiii Commission income 146 850 !! Bad debts recovered 3 005 Interest on fixed de osit 27 000 Interest on loan ? Interest earned on current account 9 300 De reciation 92 660 Dividends on ordina shares 550 000 Copyright Reserved Please Turn Over

Downloaded from hlayiso.com lune 2022 Camman Tast WoU Adjustments and additional information: A. A credit note for R45 000 issued to a debtor for goods retume 26 February 2022, was not recorded. Goods are sold at a profi of 50% on cost. B. A debtor, B Zulu, who owes the business R1 200, has been declared solvent. His estate paid 40 cents in the rand. This amount was recei and recorded. Write off the balance as irrecoverable. 9g C. Adjust the provision for bad debts to 5% of good book debt. D. Stock counts on 28 February 2022 revealed the following on hand: e Trading stock R1 500 000 e Packing material R1 200 E. Commission income for February amounted to R13 350 is still not yet received. F. There were three directors at the start of the accounting period. Directors fee for all three directors have been paid for the full accounting period. On 1 September 2021 directors fees decreased by 5% p.a for all directors. The new director was employed on 1 February 2022. She will earn the same fee with other directors. Her director's fee was not yet paid. Provide the outstanding fees owed to the director. G. Advertising includes a fee of R15 000 which was paid for a contract which start form 1 April.2021 to 31 March 2022. H. Outstanding interest on fixed deposit must be taken into account. A further fixed deposit of R60 000 was invested on 1 August 2021. This was properly recorded. Interest on fixed deposit is not capitalised. Il. External auditors are owed a further R6 000 for the financial year ended 28 February 2022. J. The interest on mortgage loan must be brought into account. K. A final dividend of R350 000 was recommended on 28 February 2022. L. The Income tax rate is 30% of the net profit before tax 50 Copyright Reserved Please Turn Over

Downloaded from hlayiso.com Accounting P1 5 June 2022 Common Test NSC QUESTION 2 (50 Marks; 40 Minutes) TANGIBLE NOTE AND CASH FLOW STATEMENT 2. ROYAL LTD 1 You are provided with information relating to Royal Ltd for the financial year ended 30 April 2022. REQUIRED: 2.1.1. Complete the Fixed/Tangible Asset Note for the year ended 30 April 2022. (16) 2.1.2 Complete the Cash Flow Statement Ltd for the year ended 30 April 2022. Some of the details and figures have been entered in the ANSWER BOOK. (25) 2.1.3. Calculate the following financial indicators on 30 April 2022: e Percentage operating profit on sales (3) e Debt-equity ratio (3) ¢ Net asset value per share (3) INFORMATION: A. Information extracted from the Income Statement on 30 April 2022: Sales 5 611 000 Operating profit 1 410 550 Interest on loan 86 760 Net profit before tax 1 323 790 B. Figures extracted from the Balance sheet and notes on 30 April: 2022 2021 Shareholder’s equity R4 607 300 R3 808 100 Fixed assets ? 3 948 600 Mortgage loan 1 142 000 920 000 Inventories 759 600 589 500 Cash and cash equivalent - 20 000 Bank overdraft 2 111 000 Shareholders for dividends 30 000 60 000 Copyright Reserved Please Turn Over

i Accounting P41 Cc. Fixed/Tangible assets Wou Downloaded from hlayiso.com Buildings Vehicles Equipment Carrying value - 1 May 2021 3 452 000 413 400 83 200 Cost 3 452 000 872 000 340 000 Accumulated depreciation 0 (458 600) (256 800) Movement Additions at cost (a) 0 116 000 Disposals at carrying value 0 (b) 0 Depreciation 0 (c) (e) Carrying value - 30 April 2022 4 522 800 (d) Cost 4 522 800 Accumulated depreciation 0 Additional information in respect of fixed assets: e An extension to the office block was undertaken during the year. e The business had three vehicles at the beginning of the year. The following details appeared in the Fixed Asset Register on 1 May 2021: Vehicle 1 Vehicle 2 Vehicle 3 Cost 240 000 352 000 280 000 Accumulated depreciation (225 000) (70 400) (163 200) Carrying value 15 000 281 600 116 800 NOTE: Vehicle 1 is old and is reaching the end of its useful life. Vehicle 3 was sold at its carrying value of R102 800 during the year. e Equipment of R116 000 was purchased on 1 October 2021. No equipment was sold. e Depreciation policy: Vehicles: 20% on cost Equipment: 15% on carrying value D. Loan The company took out an additional loan on 30 April 2022. Repay, the old loan, including interest totalled R164 760. Interest on capitalised. E. Shares es or ON e Sfiso Mthembu, a shareholder, is very concerned about the liquidity and profitability situation of the company and has decided to sell his shares. The directors repurchased all 80 000 ordinary shares from him at a price of R4,20 per share. The average issue price on this date was R3,05. e No new shares were issued. Number of shares in issue on 30 April 2022 was R750 000. F. Dividends Total dividends paid and declared for the financial year ended 30 April 2022 amounts to R170 000. Copyright Reserved 50 Please Turn Over

Downloaded from hlayiso.com Accounting P1 June 2022 Common Test NSC QUESTION 3 (50 Marks; 40 Minutes) AUDIT REPORTAND INTERPRETATION 3.1. Choose an accounting concept from Column B that best matches the analysis questions in Column A. Write only the letter (A — D) next to the number (3.1.1 — 3.1.3) in the ANSWER BOOK. COLUMN A COLUMN B 3.1.1 | To what extent does the business rely on borrowed funds? . emuigity 2 3.1.2 | Can the business pay off all its debts? 3.1.3 | Is the business able to pay its short- term debts in the next financial year? ¢ D. | Risk ing E x3) (3) ae OW co 3.2 AUDIT REPORT ee You are provided with an extract from the audit report of MEVAS Limited. REQUIRED: 3.2.1. What type of audit opinion is provided by the independent auditor? 3.2.2 To whom is the audit report addressed? 3.2.3 What is the responsibility of the directors with regards to the audit report? 3.2.4 Other than the shareholders of MEVAS Limited, list TWO other parties that will be interested in the audit report of the company. Briefly explain why each would be interested. INFORMATION: Extract from the audit report: Because of the significance of the matters, we do not express an opinion on the financial statements as to whether they have been properly prepared, in all material respects, in accordance with the IFRS. In addition, we do not express an opinion on the Statement of Financial Position together with the notes thereon as to whether they are properly drawn up so as to exhibit a true and correct view of the state of the Company's affairs as at 28 February 2022 according to the best of our information and explanations given to us. Copyright Reserved Please Turn Over

Downloaded from hlayiso.com BEET Peed Ota ae aay Utacat ou 3.3. MQHELE LTD You are provided with information relating to Mqhele Limited for the financial year ended 28 February 2022. Mghele is authorised to issue 2 000 000 shares REQUIRED: 3.3.1 Ordinary share capital note to the Statement of Financial Position on 28 February 2022. (10) 3.3.2 Liquidity Comment on the liquidity position of the company. Quote THREE financial indicators (with figures) in your answer and explain the change in each trend. (6) 3.3.3 Dividends e Doacalculation to show the change in the dividend pay-out policy. Provide ONE reason why the directors took this decision. (5) e Comment on the dividend per share over the past two years. Quote figures. (2) 3.3.4 Returns and earnings Comment on the % return and earnings per share of the company. Quote TWO financial indicators with figures. (6) 3.3.5 Shareholding A shareholder is not satisfied with the dividend received, as it is less than that of last year. Explain why you agree with him. Quote figures. (3) 3.3.6 Risk and gearing Explain how the loan affected the risk and gearing and whether or not it was a good idea to increase the loan. Quote TWO financial indicators with figures (6) Copyright Reserved Please Turn Over

Downloaded from hlayiso.com Accounting P1 June 2022 Common Test nsc INFORMATION: A. Share Capital 1 March 2021 885 000 shares were in issue 1 September 2021 500 000 additional shares were issued. 31 December 2021 150 000 were repurchased at R1.40 above the average share price. B. Financial indicators: 2022 2021 Current ratio 2.0 :1 16:1 Acid test ratio 1.6:1 0.8:1 Stock turnover rate 6 times 4 times Debtors collection period 30 days 35 days Earnings per share 63 cents 135 cents Dividends per share 63 cents 81 cents Dividend payout rate 2 60 % Debt-equity ratio 0.4:1 0.3:1 Return on average shareholders’ equity 6.1% 9% (ROSHE) Return on total capital employed 75% 8% (ROTCE) Net asset value per share 1229 cents 1017 cents Cc. Additional information: 2022 2021 Market price of shares on stock exchange 900 1030 Ordinary shareholders equity 15 179 600 9 000 450 Retained income 3 076 600 2 927 450 weet ate in 11% 12% = d deposit (Investment) 8.5% 8.5% 50 ? _ Toran MARKS: 450 Copyright Reserved Please Turn Over

Downloaded from hlayiso.com NOU GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit X 100 Gross profit X 100 Sales 1 Cost of sales 1 Net profit before tax X 100 Net profit after tax X 100 Sales 1 Sales 1 Operating expenses X 100 Operating profit X 100 Sales 4 Sales 1 Total assets : Total liabilities Current assets : Current liabilities ot te eines! eat Non-current liabilities : Shareholders’ equity (Trade and other receivables + Cash and cash equivalents) : Current liabilities Average trading stock X 365 Cost of sales Cost of sales 1 Average trading stock Average debtors X 365 Average creditors X 365 Credit sales 1 Cost of sales 1 : Net profit after tax X 100 ee tox Ps =e 100 Number of issued shares 1 (*See note below) Net income after tax + Interest on loans xX 100 Average Shareholders’ equity + Average non-current liabilities 1 Shareholders’ equity X 100 Dividends for the year_ X 100 Number of issued shares 1 Number of issued shares 4 Interim dividends X 100 Final dividends X 100 Number of issued shares 1 Number of issued shares 1 Dividends per share X 100 Dividends for the year_ X 100 Earnings per share 1 Net income after tax 1 Total fixed costs Selling price per unit —- Variable costs per unit NOTE e In this case, if there is a change in the number of issued shares during a financial year, the weighted-average number of shares is used in practice. Copyright Reserved