Accounting Grade 12 KZN March 2015 Memo

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Downloaded from hlayiso.com Accounting INSTRUCTIONS AND INFORMATION March 2015 Common Test Read the following instructions and be sure to follow them carefully: This question paper consists of 9 pages. 2. A special ANSWER BOOK consisting of 9 pages is provided in which to answer all the questions. 3. Answer ALL. the questions. 4. Workings must be shown in brackets in order to earn part marks. 5. Non-programmable calculators may be used. 6. You may use dark pencil or black / blue pen to answer the questions. 7. Marks will be deducted for missing details and foreign entries. 8. Use the information in the table below as a guide when answering the question paper: Question 1: 47 Marks, 28 Minutes Main topic of the question: This question integrate: Financial statements Financial accounting Balance sheet Ordinary share capital note e Retained income Question 2: 34 Marks, 20 Minutes Main topic of the question: This question integrate: Cash Flow Statement Financial accounting e Cash generated from operations « Cash Flow Statements Question 3: 19 Marks, 12 Minutes Main topic of the question: This question integrate: Calculation of ratio’s and interpretation Financial accounting e Debtors average collection period « Return on average capital employed ¢ interpretation Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 March 2016 Common Test NSC QUESTION 1 . {47 Marks; 28 Minutes) You are provided with the information related to Ladysmith LTD on 28 February 2015. REQUIRED: 1.1. Prepare the following notes to the Balance Sheet. 1.1.4 Ordinary share capital. (7) 1.1.2 Retained income. (7) 41.2 Prepare the Balance Sheet on.28 February 2015. (33) Cj (Where notes are not required, show ALL workings in brackets to earn part J marks) INFORMATION: A. Share Capital Of the 500 000 authorised ordinary shares, 400 000 were issued by the end of the year. Three quarters of these shares were issued for 600 cents each in 2009 while a quarter was sold for 780 cents per share on 1 November 2014. At the end of the financial year, 28 February 2015, 20 000 ordinary shares were | repurchased for 800 cents per share. These shareholders were entitled to final | dividends. Transaction was not recorded. i ¢ > The following balances appeared in the books on 28 February 2015: Fixed assets ? Fixed deposit: WKM Bank (7% per annum) 1 March 2014 300 000 Retained income (1 March 2014) 580 500 Mortgage loan: Jozini Bank 750 600 Trade debtors 223 606 Provision for bad debts 1 600 Bank 324 494 Net profit after tax ? Creditors control 110 000 Accrued income 86 000 Accrued expenses 9 920 SARS- Income tax DR 290 000 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 4 March 2015 Common Test NSC Dividends . An interim dividend of 60 cents per share was paid. The new shares issued did not qualify for the interim dividend. . A final dividend of 80 cents per share was declared on 26 February 2015. Income tax Income tax of R 300 000 was calculated at 30% of the net profit. Inventory Inventory valued R5000 was donated to local schools, transaction was properly recorded. Physical count on 28 February 2015 revealed the following: e Trading stock R 250 000. ° Consumable stores R 2 000. Fixed Deposit Interest on fixed deposit is earned at 7% p.a. and is capitalised. No interest has been received as yet. Fifty percent of the investment will mature on 30 June 2015. Mortgage Loan The company took out a mortgage loan from Jozini Bank on 4 July 2013. The loan is repayable in five equal annual installments at the end of June each year. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 5 March 2015 Common Test NSC QUESTION 2 : (34 Marks; 20 Minutes) CASH-FLOW STATEMENT The information given below was extracted from the financial statements of Nongoma LTD, distributors of exquisite traditional cloths. REQUIRED: 2.1 Prepare the following: - 2.1.1 Complete the note for reconciliation between profit before taxation ‘ ) and cash generated from operations. (6) 2.1.2 Prepare the Cash-Flow Statement for the year ended 28 February 2015. (22) 2.2 The directors have taken significant decisions during the year which have obviously affected the cash balance. List THREE of these by quoting figures from the Cash Flow Statement in each case. State why each of these decisions will have an important effect on the future results of the company. (6) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 6 NSC INFORMATION: 1. Extract from the Income Statement for the year ended 28 Febru March 2015 Common Test ary 2015 Sales 7 650 000 Depreciation 160 000 Interest expense (loan) 140 000 Net income before tax 844 200 Income tax 260 400 Net profit after tax ? 2. Balance Sheet on 28 February 2015 ASSETS 2015 2014 Non-current assets 5 894 200 4 300 000 Fixed assets 4 950 000 3 700 000 Investments/financial assets 944 200 600 000 Current assets 626 500 664 700 Inventories 175 000 241 900 Trade debtors and other receivables (2.1) 408.000 368 000 Cash and cash equivalents 43 500 54 800 TOTAL ASSETS 6 520 700 4 964 700 | EQUITY AND LIABILITIES Shareholders’ equity 5 189 000 3 321 000 Ordinary share capital 3 900 000 2 400 000 Retained income 4 289 000 921 000 Non-current liabilities Sa0 900 900 000 Loan 680 000 900 000 sores 651 700 743 700 Current liabilities Trade creditors and other payables (2.2) 394 700 543 700 Shareholders for dividends ? 200 000 TOTAL EQUITY AND LIABILITIES 6 520 700 4 964 700 Copyright reserved Please turn over }

Accounting Downloaded from hlayiso.com 7 March 2015 Common Test NSC 2.1. Trade debtors and other receivables 2015 2014 Trade debtors 398 000 353 000 Prepaid expenses 10 000 - SARS (income tax) - 15 000 408 000, 368 000 2.2 Trade creditors and other payables 2015 2014 Trade creditors 368 700 508 700 Accrued expenses - 35 000 SARS (income tax) 23 000 - 391 700 543 700 3. Additional Information 3.1‘ Fixed Assets Land and buildings were bought for R1 600 000. Vehicles were sold at book value. No other fixed/tangible assets were sold or purchased during the year. 3.2. Ordinary Shares co 2 000 000 shares have been authorized. 500 000 ordinary shares were in issue at the end of the previous financial year, 28 February 2014. 200 000 ordinary shares were issued on 1 November 2014 at R9 per share. 50 000 ordinary shares were repurchased from an unhappy shareholder over and above the average price by R4 on 28 February 2015. 3.3 dividends Copyright reserved Interim dividends of 20 cents per share was declared and paid on 4 September 2014. Final dividends of 30 cents per share were declared on 28 February 2015. The shareholder who also bought back his 50 000 shares qualified for this final dividend. Please turn over

Downloaded from hlayiso.com Accounting 8 March 2015 Common Test NSC QUESTION 3 (19 Marks; 12 Minutes) PART A CALCULATION OF RATIOS You are provided with information related to Khanda Shabangu LTD on 28 February 2015. REQUIRED: Use the information below to calculate the following figures or financial indicators for the financial year ended 28 February 2015: 3.1. Debtors average collection period in days (4) 3.2 Return on average capital employed (5) INFORMATION RELATING TO KHANDA SHABANGU LTD 28 February 2015 =| 28 February 2014 Sales (cash sales is 20%) 890.000 700 000 Cost of sales 556 250 437 500 Interest expenses 19 500 28.000 Income tax 224 100 ~ 300 000 Net profit after tax 522 900 310 000 Debtors control 64 000 52 000 Creditors 320 000 450 000 Ordinary share capital 2 400 000 4600 000 Retained income 200 000 | 168 000 Loan 130 000 940 000 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 9 March 2015 Common Test NSC PART B INTERPRETATION OF RATIOS You are provided with information related to Lekota LTD on 28 February 2015. REQUIRED: 3.3 Existing shareholders are happy with the price at which each new share was sold. Quote TWO financial indicators / figures to support their opinion and comment on it. . (3) 3.4 With regard to the loan and the repayment thereof: " Do you think that it was a good idea to pay off a large portion of the loan? . Briefly explain your findings with reference to TWO relevant financial indicators. Name and quote figures in your explanation (7) Financial indicators 2015 2014 Net asset value per share 597 cents 509 cents Earnings per share 450 cents 390 cents % return on shareholders’ equity 51% 49% % return on capital employed 28.4% 18% ) | Debt/equity ratio 0.14: 1 4:1 Interest rate 15% INFORMATION: A. Market price on JSE: ° Market price on JSE was 560 cents on 1 April 2014. It increased by 30 cents during the financial year. B. Details of shares issued: ° 600 000 ordinary shares were in issue at the end of the previous financial year. . 345 000 ordinary shares were issued at R6.20 on 1 July 2014, TOTAL MARKS: [100] Copyright reserved

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