Accounting Grade 12 Paper 2 NW Prelim 2023 Question Paper

Downloaded from hlayiso.com education Department: Education North West Provincial Government REPUBLIC OF SOUTH AFRICA NATIONAL SENIOR ICATE - !! !! !! !! !! !! !! !! !! !! !! !! !!� II II II II II II ,. II ,., 4liiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii iiiiiiiiiiiiiiii ii � MARKS: 150 TIME: 2 hours Stanmorephysics This question paper consists of 14 pages, a formula sheet and a 13-page answer book. Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer Atl>questions. 2. AspeciabANSWER BOOK is provided in which to answer ALL questions. 3 A Financial'Indicator formula sheet is attached at the end of this question paper. You may use it if necessary. 4. | Show ALL workings to earn part-marks. 5. You may use a non-programmable calculator. 6. You may use a dark pencil or blue/black ink to answer questions. 7. Where applicable, show ALL calculations to ONE decimal point. 8. Write neatly and legibly. 9. Use the information in the table below as a guide when answering the question paper. Try NOT to deviatefrom it. QUESTION TOPIC MARKS MINUTES 1 Reconciliations 40 30 2 Cost Accounting 45 35 3 VAT and. Inventory Valuation 35 30 4 Budgeting 30 25 TOTAL 150 120 Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 QUESTION 1: DEBTORS'-, CREDITORS'- AND BANK RECONCILIATION (40 marks; 30 minutes) 1.1. DEBTORS AND CREDITORS’ RECONCILIATION The information supplied below was taken from the books of North Traders. REQUIRED: Use the4iAformation supplied and show how each item, in the additional informatior® would affect the debtors and/or creditors (errors and omissions). Show the effect by indicating + and/or — signs, followed by the amount in the table provided. (15) INFORMATION: The following balances and totals appear in the general and subsidiary ledgers on 28 February 2023: Debtors' Control R36 100 | Debtors' List R36 730 Creditors' Control R47 550 | Creditors’ List R46 020 Additional Information: ‘ll, An invoice for R2 950 received from a supplier Kong Traders, was properly recorded in the appropriate journal and General Ledger, but was not posted to their account. 2. An EFT for R4 500 was received from a debtor whose account was previously written off as irrecoverable. It was mistakenly recorded in the Debtors' Control column of the Cash Receipts Journal and posted as such to the General Ledger and the Debtors’ Ledger. 3. An invoice for R400 received from Sisha Wholesalers was correctly entered in the relevant journal, but wrongly posted to the account of another creditor, Nyama Wholesalers. 4. B. Berg’s account of R4 600 is four months overdue. North Traders charged this account with 15% interest per annum for four months. No entries were made. 5. The bank statement showed an EFT for R920 which was received from a debtor O Olga, in full payment of her debt of R970. The bookkeeper credited R920 to the Debtors control account and reduced O Olga’s account with R290. 6. A debtor, C Cake, returned goods worth R980. The bookkeeper inadvertently recorded this in the Creditors’ AllowangesJournal. He also posted it to the Creditors Control account, but didsnot-post it to the Debtors or Creditors ledger. 7. A debit note for R220 was received from a creditorf=XY Traders, in respect of trade discount which they had granted. The bookkeeper entered this in the correct journal, but posted it to the wrong side of XY Traders’ account in the Creditors ledger. The General Ledger is correct. Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 1.2. BANK RECONCILIATION Stadig Industries has J Joubert as a bookkeeper, responsible for depositing money into the bank and processing EFT receipts and payments. He has left the countryrand cannot be traced. You are required to prepare the Bank Reconciliation for August 2023. The bank-statement was received from PP Bank via email on 27 August 2023. REQUIRED: 1.2.1. Use the table provided in the ANSWER BOOK to calculate the final totals of the Cash Journals on 31 August 2023. (11) 1.2.2 Calculate the correct bank balance in the ledger on 31 August 2023. (4) 1.2.3 Prepare the Bank Reconciliation Statement on 31 August 2023. (7) 1.2.4 An investigation revealed that the deposit of R31 210, dated 9 July 2023, did not appear in the July and August Bank Statements. This was in respect of cash received, that Joubert never deposited. You advised the owner to write off this amount. e State the GAAP principle that applies to this decision. e Explain TWO procedures, besides division of duties, to be implemented to prevent such a loss in future. (3) INFORMATION: A. Extract from the Bank Reconciliation Statement on 31 July 2023: Outstanding deposit: 9 July 2023 | R31 210 30 July 2023 12 105 Outstanding EFT’s: No 121 (dated 28 July 2023) 4716 No 122 (dated 30 July 2023) 8111 Favorable balance according to the Bank account in 146 800 the ledger of the business Copyright reserved The outstanding deposit of R12 105 dated 30 July 2023 and EFT 121, appeared on the Bank Statement for August 2023. EFT 122 appears on the August Bank Statement as R6 311. The Bank Statement is correct. The outstanding deposit of R31 210 on 9 July 2023 was never deposited, it seems to be stolen and must be writtenjoff. Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 B. On 31 August 2023, the provisional totals in the journals before the reconciliation were: CASH RECEIPTS JOURNAL CASH PAYMENTS JOURNAL R389 504 R287 000 c. The following information of the August 2023 Bank Statement from PP Bank, -did not appear in the August Cash Journals: A deposit of R31 100 from Alcatel Bank is a fixed deposit that matured together with the interest. Service fees of R391. An ATM withdrawal of R2 150 by the owner for personal use was incorrectly entered in the CPJ as R5 120. A debit order to The City Municipality for R28 115 for water, electricity and utilities. The direct deposit received from a debtor G Tapiwa of R4 800, in settlement of his account of R5 000. D. The following items reflected differences between the bank statement and the journals, and must also be considered: EFT 211, for R1 025 in favour of Micoh Motors was recorded in the appropriate journal. PP Bank however, reflected it twice on the August Bank Statement. The bank informed us that they will rectify it on the next Bank Statement. On 25 August 2023, Stadig Industries received proof of a direct deposit into the business’s bank account from debtor, N Neon, for R2 910. This is a payment on his account. The bookkeeper entered this in the CPJ. This receipt has not yet appeared on the bank statement. E. The following entries appeared in the August 2023 Cash Journals but did not appear on the Bank Statement for August 2023. Payments after the 27" of August were: EFT 322 for R7 140 dated 28 August 2023. A deposit of proceeds from cash sales of R16 878 on 31 Atigust 2023. F. The Bank Statement of 27 August 2023 showed a bank balance of R? 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 QUESTION 2: COST ACCOUNTING (45 marks; 35 minutes) 2.1 Indicate whether the following statements are TRUE or FALSE. Write only TRUE or FALSE next to the question numbers (2.1.1 to 2.1.3) in the ANSWER BOOK. 2.1.1 Cafriage on raw materials purchased, increases the cost of raw materials issued for production. (1) 2.1.2 Difect labour cost is part of factory overhead cost. (1) 2.1.3. Commission on sales will be classified as an administration cost. (1) 2.2; MAQ LAWN MOWER MANUFACTURERS You are provided with information relating to Maq Lawnmowers for the year ended 28 February 2023. The business manufactures one type of lawn mower. REQUIRED: 2.2.1. Prepare the Factory overhead cost note. (15) 2.2.2 Prepare the Production Cost Statement. (12) INFORMATION: A. Stock balances: 28 February 2023 1 March 2022 Work-in-process ? R160 000 Finished goods stock R 95 000 R110 000 Indirect factory material R15 100 R_13 201 B. The cost of salaries per production worker is R12 600 per month. The factory has 13 production workers earning the same salary. Cc. The factory foreman’s annual salary must be entered. His annual deductions for the year are: PAYE R39 600 (the PAYE rate is 18%). Pension R17 600 (this is 8% of gross salary; the employer’s fund contribution is twice the deduction). D. Accounts appearing in the General Ledger on 28 February 2023: Factory plant and machinery R2 800 000 Accumulated depreciation factory plant and machinery R2 528 000 (1 March 2022). Water and electricity R104 000 Rent expense R115 200 Insurance R_? e The factory uses 90% of water and electricity. e Rent is divided between the different sections according to floor space. TOTAL | FACTORY | ADMINISTRATION | SALES Floor space | 750 m? 450 m? 20 m? 280 m? e Insurance is allocated to the factory, sales and administration in the percentage ratio 45 : 35 : 25. The portion allocated to administration is R18 100. Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 Indirect materials of R38 400 were bought for the factory during the financial year. The following figures must still be brought into account: e Depreciation on factory plant and machinery at 10% p.a. on cost. These assets are very old and will need to be replaced next year. ¢ Direct (raw) materials issued for manufacturing, R1 335 400. Details from the Statement of Comprehensive Income for the year: Sales of finished goods R6 022 500 Cost of sales of finished goods (50% mark-up on cost) 2 2.3. VITAMIN CHEWABLES This business produces and sells boxes of multi-vitamin pills to boost the health of people. The owner is Mimi Muller. The financial year ends on 30 September 2023. REQUIRED: 2.3.1 2.3.2 2.3.3 2.3.4 Provide a calculation to confirm that the break-even point for the 2023 financial year is correct. Mimi is not happy with the number of units produced and sold. Provide evidence with figures to support her opinion. Provide TWO points. No theft has occurred in the business; however, Mimi is concerned that most of her workers are not loyal nor committed and do not have due regard for the products they produce. Provide TWO different points of evidence, with figures, to support her opinion. Mimi wants to improve her profit by R75 000 during the next financial year, while maintaining costs. Calculate the additional units that must be produced to achieve this target. INFORMATION: The following information was taken from the accounting records: 30 September 2023 30 September 2022 Total Per unit Total Per unit Sales R7 616 000 | R119,00| R7 644 000 R98,00 Variable costs R4 544 000 R71,00 | R4 400 000 R56,41 Fixed costs R2 942 400 R45,98 | R2 520 960 R32,32 Direct material cost R2 624 000 R41,00 | R2 371 200 R30,40 Direct labour cost R1 472 000 R23,00 | R1 528 800 R19,60 Selling & distribution cost R448 000 R7,00 R500 000 R6,41 Break-even point 61 300 units 60 615cunits Units produced & sold 64 000 units 78 0Q0-units Copyright reserved Please turn over (3) (4) (4) (4) 45

Downloaded from hlayiso.com Bewnlemded from Stanmorephysics.com NW/September 2023 QUESTION 3: VAT AND INVENTORY VALUATION (35 marks; 30 minutes) You are provided with information of Purple Sub (Pty) Ltd for the 2-month period, March and April 2023. The company specializes in ladies’ clothing. They make and sell ONE typeof; flare skirt and they buy and sell THREE types of dresses. The company is registered for VAT and only buys from VAT vendors. The mark-up-on skirts and dresses is 60% on cost. Skirts: TRe-WEIGHTED AVERAGE stock valuation method is used to value the stock of rolls of fabric that is needed to make the skirts. Dresses: The SPECIFIC IDENTIFICATION method of stock valuation is used. These dresses are bought directly from the manufacturer. A whistle-blower has informed the owner that employees might have stolen some of the fabric for the skirts. The informant is unsure if the fabric has been stolen from the storeroom or the factory. REQUIRED: 3.1 SKIRTS 3.1.1. Provide calculations to show how much stock of fabric (in metres): e has been stolen from the storeroom. e has been wasted, or stolen from, the factory. 3.1.2 Calculate the value (excluding VAT) of all the stock of fabric on hand at the year-end using the weighted average method. 3.1.3 Apart from obvious measures such as installing cameras and locking up the storage areas, what instructions should be given to the following staff managers to prevent theft of fabric? Provide TWO different points for each employee: e The storeroom manager e The factory manager INFORMATION FOR SKIRTS: A. _ Information relates to the period 1 March 2023 to 30 April 2023. B. All items are subject to 15% VAT. Cc. | STOREROOM STOCK RECORDS OF FABRIC USED FOR SKIRTS Date purchased Metres of fabric Cost price per Total cost excl. bought metre (excl. VAT) VAT Opening stock 490m R72 R 35 280 Purchases 2 420m R172 460 17 March 2023 800 m R70 R 56 000 11 April 2023 900 m R75 R 67 500 29 April 2023 720m R68 R 48 960 Issued to factory: 2312 m Closing stock per physical count: 470 m Copyright reserved Please turn over

Bewnlemded from Stanmorephysics.com Downloaded from hlayiso.com NW/September 2023 D. Production and sales of skirts: ° 800 skirts were produced and sold during the financial year. ° The factory expects to use 2,5 metres of fabric to make one skirt. ° The selling price per skirt is R510 excluding VAT. ° Aere was no stock of fabric or work-in-progress in the factory at the beginning or end of the financial year. 3.2. DRESSES REQUIRED: 3.2.1 Calculate the value of the closing stock (VAT excluded) of the dresses according to the Specific Identification method. (4) 3.2.2 Calculate the stock holding period of dresses. Note that this is for only a 2-month period March and April 2023, i.e. 61 days. (4) INFORMATION FOR DRESSES: E. DRESSES Stock and . purchases of | Or nit VAT exclusive dresses (units) Opening Stock (all Model A) 20 R1 000 R20 000 Purchases 170 R234 000 Model A 60 R 1000 R60 000 Model B 50 R 1 800 R90 000 Model C 60 R.1 400 R84 000 Note: There was no theft of dresses during this period. F. Sales of dresses during the financial period: Number of Sales excluding | Sales including dresses sold VAT VAT Model A 74 R118 400 R136 160 Model B 42 R120 960 R139 104 Model C 56 R125 440 R144 256 Sales 172 R364 800 R419 520 Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 3.3. VALUE ADDDED TAX The company’s records reflected that no amount was owing to or receivable from SARS on 28 February 2023. An administration assistant has compiled a template to calculate the VAT relatingito/March & April 2023 for both products (i.e. sales and dresses) and for theddditional adjustments required. This template is provided in the answer book. Some of the figures have already been entered, but it has not been completed. REQUIRED: Calculate the VAT on total sales, total purchases and the additional information that must be reflected on the VAT return for the period March to April 2023. You need to fill in the missing figures in column D only. You must indicate + for an increase, — for a decrease or 0 for no effect. The first item has been done for you as an example. State whether the VAT calculated will be a payable or receivable from SARS. (10) ADDITIONAL INFORMATION FOR VAT Details Exclusive Inclusive Administration wages and salaries 70 000 Operating expenses 103 200 Fixed asset purchased for business purposes Bad debts 142 600 2 645 35 Copyright reserved Please turn over

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Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 QUESTION 4: PROJECTED STATEMENT OF COMPREHENSIVE INCOME (30 marks; 25 minutes) Anel Aaron_owns Anel Technologies & Repairs. The business sells decoder software andihardware and charges fees for repairing decoders. Fees charged for repairs arelcash only. You are provided with a Projected Statement of Comprehensive Income for October and November 2023. Anel plans to start with Christmas-ptomotions in November. REQUIRED: 4.1. Explain how Anel changed the mark-up % from October to November, and provide TWO reasons why she might have chosen to do this. 4.2 Calculate the amount of the loan on 1 October 2023. 4.3 Anel has budgeted to increase wages of the shop assistants during November 2023. . Calculate the proposed percentage increase that will be granted during November 2023. . Do you think that the shop assistants will be satisfied with this increase? Give a reason to support your opinion. 4.4 Refer to information B An extract of budgeted and actual figures for September 2023 is provided. 4.4.1 Comment on the budgeted and actual figures for advertising. What consequences do this have for the business? Quote figures or calculations to support your opinion. 4.4.2 Anel is concerned about the difference between the budgeted and actual figures of repair material. Why is she concerned and what could be the reason for this difference? Quote figures or calculations to support your opinion. Copyright reserved Please turn over (4)

Bewnlemded from Stanmorephysics.com Downloaded from hlayiso.com INFORMATION: A. ANEL TECHNOLOGIES & REPAIRS NW/September 2023 Projected Statement of Comprehensive Income for the two months ended‘30 November 2023. OCTOBER | NOVEMBER R R Sales. 180 000 300 000 Cost of sales (100 000) (200 000) Gross profit 80 000 100 000 Other income 140 000 169 700 Sundry income 45 000 74 700 Fee income (for repairing services) 95 000 95 000 Gross operating income 220 000 269 700 Operating expenses (169 000) (198 750) Salary of the store manager 18 000 18 000 Wages of the shop assistants 48 000 51 840 Sundry expenses 13 500 22 410 Depreciation 8 000 8 000 Bad debt 13 000 14 000 Telephone 10 000 12 000 Advertising 30 000 44 000 Consumable stores (Repair services) 28 500 28 500 Operating profit 51 000 70 950 Interest income 20 000 20 000 Profit before interest expense 71 000 90 950 Interest expense (14% p.a. interest is not (13 160) (34 720) capitalised) Net profit for the month 57 840 56 230 Extract of budgeted and actual figures for September 2023. BUDGETED ACTUAL R R (i) _| Sales 190 000 120 000 (ii)_| Advertising 30 000 6 000 (iii) _| Fee income 80 000 73 000 (iv) | Consumable stores (Repair services) 24 000 29 200 Copyright reserved Please turn over

Downloaded from hlayiso.com Bewnlerded from Stanmorephysics.com NW/September 2023 4.5 PROBLEM SOLVING James, the manager of Apex hotel, did some research into saving electricity costs. He identified three cost saving measures which could also help in coping with loadshedding. However, the CFO, Brenda, thinks that they cannot=afford James’ budgeted total cost. The hotel normally has an occupancy rate of 70%, however, following Covid and increased loadshedding, this has reduced to 58%. REQUIRED: 4.5.1 Without the cost saving measures proposed, the total budget for electricity for the 2023 financial year is expected to be R780 000. Refer to Information B and C. Calculate the financial saving (in Rands) that the cost saving initiatives would have on the electricity expense. (6) 4.5.2 Calculate how long it will take for the savings to cover the total cost of the initiatives proposed. (2) 4.5.3 e Explain why you would advise James and Brenda to go ahead with the proposed measures or not. Provide a reason. (2) e Provide TWO other advantages that these changes would have for the future prospects of the hotel. (2) INFORMATION A. Expected electricity usage before implementing proposed changes: Lighting 20% Kitchen equipment 30% Geysers 35% Air conditioners 15% Total 100% B. Budget for investment in cost-saving equipment presented by James for 2023: R Replace existing lights with new LED lights 235 000 Install air-conditioner motion sensors 102 500 Replace electrical stoves with gas stoves 220 000 Replace old geysers with solar energy geysers 640 000 Total investment budget R1 197 500 c. Additional information on James’ proposals: e LED lights not only last much longer than the current light bulbs but they use 70% less energy and produce less heat. e Motion sensors in the various rooms will tumn-off the air- conditioning when guests are not in their rooms;;This should reduce the electricity used on air-conditioners by/30%. e Installing gas stoves would save 60% on electricity-in the kitchen. e Replacing old geysers with solar-energy geysers will not require electricity, but maintenance costs are expected to increase by R80 000 per annum. 30 TOTAL: 150 Copyright reserved

Downloaded from hlayiso.com Accdawmboaded from Stanmoreph ySiCS.COM NW/September 2023 GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit x 100 Sales 1 Gross profit x 100 Cost of sales 1 Net profitbefore tax x 100 Sales 1 Net profit after tax x 100 Sales 1 Operating expenses x 100 Sales 1 Operating profit x 100 Sales 1 Total assets : Total liabilities Current assets : Current liabilities (Current assets — Inventories) : Current liabilities Non-current liabilities : Shareholders’ equity (Trade & other receivables + Cash & cash equivalents) : Current liabilities Average trading stock x 365 Cost of sales 1 Cost of sales Average trading stock Average debtors x 365 Average creditors x 365 Cost of sales 1 Credit sales 1 Net income after tax x 100 Average shareholders’ equity 1 x 100 1 (*See note below) Net income after tax Number of issued shares Net income before tax + Interest on loans x 100 Average shareholders’ equity + Av erage non-current liabilities 1 Shareholders' equity x 100 Dividends for the year x 100 Number of issued shares 1 Number of issued shares 1 Interim dividends x 100 Final dividends x 100 Number of issued shares 1 Number of issued shares 1 Dividends per share x 100 Earnings per share 1 Dividends for the year x 100 Net income after tax 1 Total fixed costs Selling price per unit — V: ariable costs per unit NOTE: * In this case, if there is a change in the numbe weighted-average number of shares is used in r of issued shares during a financial year, the practice. Copyright reserved