Accounting Grade 12 KZN March 2018 Memo

Downloaded from hlayiso.com education Department: Education ' PROVINCE OF KWAZULU-NATAL GREENBURY SECONDARY SCHOOL ! ACCOUNTING : GRADE 12 | | FIRST QUARTERLY TEST : 2018 | Nee 7 MARKS :170 TIME :90 MINUTES NAME: GRADE 12: This question paper consists of 8 pages and an answer booklet of 7 pages. Pagelof8s

Downloaded from hlayiso.com INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. SNOARwYNS Answer ALL the questions. A special ANSWER BOOK is provided in which to answer ALL the questions. Show ALL workings to earn part-marks. You may use a non-programmable calculator. You may use a dark pencil or blue/black into to answer the questions. Where applicable, show all calculations to ONE decimal point. Write neatly and legibly. Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION 1 : 46 marks; 30 minutes Topic : This question integrates : Profit Calculation and Financial accounting Notes to Financial Concepts Statement Profit calculation Notes to Balance Sheet [~ QUESTION 2 : 61 marks; 30 minutes | Topic : ; | This question integrates : - Notes to Financial ~~ Financial accounting Statement and Balance Balance Sheet and Notes Sheet QUESTION 3 : 63 marks; 30 minutes Topic : This question integrates : Fixed Assets _ Financial accounting a Cash Flow Cash Flow Statement Managing Resources Fixed Assets Page 20f8

Downloaded from hlayiso.com QUESTION 1 : Profit Calculation and Notes to Financial Statements [46 Marks; 30 Minutes] 1.1. Acompany’s published annual report comprises five main parts. Choose a description in Column B that matches the term in Column A. Write only the letter (A — E) next to the question number (1.1.1 — 1.1.5) in the answer book. “COLUMN A | COLUMN B 1.1.1 | Income Statement A. An explanation of the operations of the 1.1.2 | Balance Sheet company during a financial year. 1.1.3 | Cash Flow Statement B. Reflects whether or not the 1.1.4 | Director's Report shareholders can rely on the financial 1.1.5 | Independent Audit Report statements. C. Reflects the profit / loss of the | company for the year. D. Reflects the effect on the operating, financing and investing activities on | the cash resources. E. Reflects the net worth of the company. [5x1=5] 1.2 BEENILTD Refer to the information from the records of BEENI LTD for the financial year ended 30 June 2018. REQUIRED 1.2.1 Calculate the correct net profit after tax after taking into account the information (A) below. Indicate an increase by (+) or a decrease by (-). Show workings in brackets, wherever applicable, to earn part marks. [22] 1.2.2 Prepare the retained income note to the Balance Sheet. [13] 1.2.3. The CFO (Chief Financial Officer), Charlene Maharaj, has convinced the company to buy back a further 400 000 shares from her close relative during the next financial year. Charlene currently owns 1 904 400 shares in this company, which is 46% of the issued shares. As a shareholder, explain your concern regarding the proposed buy-back of shares. Provide calculations to support your concern. [6] Page 30f8

Downloaded from hlayiso.com INFORMATION A. The net profit before tax R1 431 700 was calculated before taking into account the following adjustments : © R100 000 is owed to the independent auditors. e Stock of packing materials on hand as per inventory on 30 June 2018 amounted to R2 000. e The provision for bad debts is to be decreased by R3 000. e Insurance included an annual premium of R6 000 paid for the period 1 December 2017 to 30 November 2018. e The loan statement from A.Raj bank reflected the following : Balance on 1 July 2017 R600 000 | Repayments during the year R312 000 Interest Capitalised R? Balance on 30 June 2018 _ R360 000 _ e During a burglary stock costing R50 000 was stolen. The insurance company agreed to pay out an amount of R40 000, but this has not yet been received. e An amount of R4 800 representing 40 cents in the rand was received from the insolvent estate of a debtor and recorded in the Cash Receipts Journal on 30 June 2018. No entry was made to write off the balance of the account. e 60 000 ordinary shares were repurchased from a disgruntled shareholder on 31 May 2018. The company paid R3,50 per share. This was paid but the bookkeeper debited the full amount to Sundry Expenses. Additional Information v The business has an authorised share capital of 6 000 000 shares v Ordinary share capital (1 July 2017) R3 150 000 ¥ 70% of the shares were in issue on 1 July 2017 | B. Income tax for the year amounted to R408 800. This was calculated at 28% of the corrected net profit. C. Dividends : e Interim dividends R630 000. e A final dividend of 20 cents per share was declared on 30 June 2018. Only shares in the share register qualify for full dividends. _* Page 4 of 8

Downloaded from hlayiso.com QUESTION 2 : Balance Sheet and Notes [61 Marks; 30 Minutes] 2.1 JUANITA LTD Refer to the information from the records of JUANITA LTD for the financial year ended 30 June 2018. REQUIRED 2.1.1 Prepare the following notes to the Balance Sheet : 2.1.1.1 Ordinary Share Capital (11] 2.1.1.2 Trade and other Payables [18] 2.1.2 Complete the Balance Sheet on 30 June 2018. Where notes are not required, show ALL workings in brackets. [32] INFORMATION A. Extract from the books on 30 June 2018 : [ Fixed / Tangible Assets (carrying value) ?| Fixed Deposit : Shana Bank 250 000 Ordinary Share Capital (1 September 2017) 1 200 000 Retained Income (1 July 2017) 148 800 Bank (Favourable) 7 470 000 Loan : Tes Bank 2 Trading Stock a 127 000 | Debtors Control : : 20 000 Creditors Control / 146 600 Prepaid Expenses 3 000 Income Received in Advance ; 2 000 SARS — Income Tax (Provisional Payments) 400 000 SARS PAYE : 2 000 [ Dividends on Ordinary Shares (Interim) 200 000 | B. Shares ® The company has an authorised share capital of 2 000 000 shares. e On 1 September 2017 an additional 200 000 shares were issued at R4,25 each. It has been properly recorded. e On 27 June 2018, the Directors decided to repurchase 50 000 shares from a disgruntled shareholder at R5 each. No entries were made. Page 5 of 8

Downloaded from hlayiso.com C. Dividends e A final dividend of 30 cents per share was declared on 30 June 2018. Only shares in the share register qualify for final dividends. D. Income Tax e The net profit after tax was calculated as R1 051 200. e The income tax for the year amounted to R408 800. This was calculated at 28% of the net profit. E. The following adjustments have been taken into account to calculate the net profit after tax. e Provision for bad debts is set at 5% of outstanding debts. e The electricity account for June 2018 is still outstanding, R4 000. e Consumable stores used during the year amounted to R12 000. This represents 80% of the total consumable stores purchased. e The details of an employee J. Jakes, employed on 1 June 2018 was omitted from the Salaries Journal. DEDUCTIONS PAYE PENSION FUND NET SALARY 1 000 2 800 12200, | ¢ The employer contributes towards the employees’ pension fund : R2 for every R1. No payments were made. F. The loan statement from Tes Bank reflected the following : Balance on 1 July 2017 R480 000 Repayments during the financial year (including interest) ~ R177 600 Interest Capitalised R57 600 Balance on 30 June 2018 ? R40 000 of the loan will be paid back in the next financial year. G. Bank Statement The bank statement received on 30 June 2018 showed an outstanding cheque for RS 000 issued to Quickfix CC for repairs. This cheque was dated 10 July 2018. H. Fixed deposit 20% of the fixed deposit will mature on 31 December 2018. Page 6 of 8

QUESTION 3 : Fixed Assets and Cash Flow Downloaded from hlayiso.com LEAH LTD The given information relates to LEAH LTD for the financial year ended 28 February 2018. RE QUIRED 3.1 Refer to Information A and Information B. [63 Marks; 30 Minutes] Calculate the missing amounts denoted by (a) to (c) on the Fixed Asset Note. [14] 3.2. Prepare the note CASH GENERATED THROUGH OPERATIONS to the Cash Flow Statement for the year ended 28 February 2018. [14] 3.3 Complete the Cash Flow Statement for the year ended 28 February 2018. Show workings to earn part marks. [35] INFORMATION A. Information from the Financial Statement on 28 February : - 2018 2017 Depreciation 9 ? Interest Expenses 123 000 126 500 Net Profit before Tax 422 500 157 500 Net Profit after Tax 295 750 113 400 | Fixed Assets (Carrying value) 4934 450 3 993 390 Shareholders Equity 4 375 250 3 135 000 Ordinary Share Capital 4 117 500 3 000 000 Retained Income 257 750 135 000 Non-Current Liabilities 750 000 1 300 000 Inventories (Only Trading Stock) 288 000 ~ 363 000 Debtors | 318 000 | 254 000 | Creditors 287 000 367 000 | Cash and Cash Equivalents 2 500 245 000 Bank Overdraft 27500) - SARS — Income Tax _ 5 200 (Cr) 3 390 (Cr) Shareholders for Dividends _ 98000) 50.000 Page 7 of 8

Downloaded from hlayiso.com B. Fixed Asset Note Fixed Asset comprise only Buildings and Equipment | “BUILDINGS | EQUIPMENT Carrying value (01/03/2017) _ 2 866 990 1 126 400 Cost (01/03/2017) 2 200 000 Accumulated Depreciation (01/03/2017) j | (1073600) | Movements - Additions OO (a) 300 000 Disposals a —_ (b) Depreciation (c) Carrying Value (28/02/2018) . 1 058 520 Cost (28/02/2018) cS Accumulated Depreciation (28/02/2018) e Additional equipment was purchased on 1 June 2017. e Extensions to the building were completed on 31 August 2017. e Old equipment was sold at carrying value on 28 February 2018. e Equipment is depreciated at 20% using the Diminishing-Balance Method. C. Share Capital and Dividends e The company is registered with an authorised share capital of 1 000 000 ordinary shares. e On 1 March 2017 there were 500 000 shares in issue. A further 200 000 shares were issued on this date. e An interim dividend of R70 000 was paid on 31 August 2017. e On 28 February 2018, 25 000 ordinary shares were repurchased from the estate of a deceased shareholder at R6,30 per share. The average issue price was R6,10 at this point. e A final dividend was declared on 28 February 2018. 8 TOTAL : 170 Page 8 of 8

Downloaded from hlayiso.com education S % Oepartment: Education z PROVINCE OF KWAZULU-NATAL 10 PLEASE TICK Hk [om [AR | Fo SS ey N | GREENBURY SECONDARY SCHOOL | | ACCOUNTING : GRADE 12 ; FIRST QUARTERLY TEST : 2018 | ANSWER BOOKLET Noe Z NAME: GRADE12:_ QUESTIONS _ _ MARKS MODERATOR | 1. dt 2. 6] a oe 3. i3 7 | TOTAL foo N.B. This answer book consists of _7_ pages. Page lof7

Downloaded from hlayiso.com QUESTION 1 1.4 Tate yl 1.14.2 |; Z mM13t, 4414], | 1.1.5 |p Y 1.2 1.2.1 Calculate the correct net profit before tax Incorrect Net Profit 1431 700 Auont Fees ~ weece |\/ frccing MATERIALS ; + 260 V DECREASE “es fap uistos fer, BAD vEbTC + see |v Hiseinasice (bee ha) 4 t asco F} yorenest ow dean (bee ow Mace + riowde) ~ tow iss bus To ouncany — ( So cor wad) = lecco Sry nenrs _( A sh . _ - Fie @p Suuapy ExPenses —— ( oe Ra, soy~ + aoc (4 Net polit batt tax - Hie: Bap | Yucome Thx (405 so) Net profit after tax leg? Bo OQ 1.2.2 Retained Income Balance of Retained Income beginning of year 1 571 800 Aver Paetic AE TER TAK ( 40% 800 ihe) see pda {OS} 20 ® _ , ; FZ A csansaie cf bocce ster AT AAT ADE Avene Prue (lls cee ) iG Dividends ( 45% cov) / Vorensn ya (40 eco fea ( lye ‘+ MO cov stnhes) Balance of Retained Income at end of year (528 cer) G ! eco ceo’ Af — 13 Page 2 of 7

Downloaded from hlayiso.com 1.2.3 Asashareholder, explain your concern regarding the proposed buy-back of shares. Provide calculations to support your concern. Calculate NUHBER CF sManes i TSSUE AFTER REPULCHASE WexT AiBAUCIAL Te = toa ~ and A, jen oF SHARES oWNe BY CFE = Vondgee Gy $64 sy HO of Z SHAREHDIDIWG AFTER REPWLCUSE WERT Fisaweme Tee = Tee a Z = 62,97 @O/ =_Z? Concern y cho Wilkk own Here THAW sof cf THE SHARES > HaTeriTy SHAREHPUNER, V/ | Page 30f7

Downloaded from hlayiso.com QUESTION 2 2.1 2.1.1. Ordinary Share Capital 2.1.2. Trade and other Payables [ Authorised 2 000 000 Ordinary Shares Issued 100 000 Shares in issue at beginning of year (saeca.-esee too wv | ace coy JZ | 2anves cesuen co | eRe dei7/ bunts THE Tene. AT Raas va 850 cee 4 (Se ceo ) J | SHARES REPuRcHAsM aT AVERAGE (Rite fa Pa | (Axo ae ) icine / | Shares in issue at end of year ioe oo Z| Shns-Wicowe Tax (405 veo ~~ Ae0 cco) : 8am | SWmweneraens for owrnenris (“eo A 782 1 snes ) eae W Comnciit fenrips OF _ Mendy L 7 - wv ¢ Chebiions Cowimey (mb be t soe) 15] bow t frwcwe REcervey ih Ablanice Ree 4 SHAS De ( ccd rooGi) ; _ Bee) W/| ecru Exreuses apse v4 fesision fay (2909 reo : 3400 Z CREDITORS fo SALAMIS 12 2% I | ~ a seteco 18 | Page 4 of 7

Downloaded from hlayiso.com 2.1.2 JUANITA LTD Balance Sheet on 30 June 2018 [ ASSETS - a a a a NON-CURRENT ASSETS | 0073 cep Fixed / Tangible Assets 73 eo | 6 O Financial Asset (95, eo = So 2) OO 2eo ey Y | a | CURRENT ASSETS +37 ceo Inventory CYT he 4 Tee) 130 000 Q Reccivnsies (dee loco + ee) 22 vv ©) nn a ie [ _actet an Gast Feu nLeurs 5 (aT00eb ~ 250 peod + Stco + 56 cee ) 15 ow 2 EQUITY A AND LIABILITIES — I SHAREHOLDERS EQUITY oo a ly 876 00 Ordinary Share Capital Ret 14) 1 cee. cx CD ica EY deca = on Retained Income (ins 966 FIST oe = 50 0cw ~ We we IS owe. i S]5 Coo @ NON-CURRENT LIABILITIES wl ae | Lean Leah Bank (480 coo - rye lier SY ho) + 4o eve ecw A 390 coo Y CURRENT LIABILITIES — fo sae dep Trade and other Payables ( fee 21-2" iF wo Y J a re ae | 32] TOTAL EQUITY AND LIABILITIES (crue) | Aso wy || 32 | TOTAL AL MARS (tor, |— | | 61 Page 5 of 7

Downloaded from hlayiso.com QUESTION 3 3.1 | No. WORKINGS AMOUNT (a) |Additionsto Buildings 7 4434. S00” ied i cE snp mune i ces to (b) | Total Depreciation on Equipment ci: foe & Wb Hee ( arce cov ~ jeBdow ) weve: fee A 360 cov x ty 25 age vv AS ope (c) ‘Disposal of Equipment at carrying value | { me f J Z v HAE 400 | B00 cep -- AJo ISS ~ jo$s $20 Woee w ee 14 3.2 Cash Generated through Operations Net profit before Tax 4a 5 Adjustment for _ M Demeccinticn a (Norm ty sa Lb) ao x0 Y hrirenesr Krense wee Profit before changes in Working Capital SiS T80 Changes in Working Capital ( bg ce6 ) = _ H# Inventory wecnéasey ( 365 ete 288 ceo) T5 coo 4t Receivables isceepsen ( 38 oe ~95 coo) ( be me | a+ Payables necnensem ( 370th 28 ee) (© ce ty _ Tet 730 te Page 6 of 7

Downloaded from hlayiso.com 3.3. Cash Flow Statement for the year ended 28 February 2018 | CASH EFFECTS OF OPERATING AGTIVITIES fonceanos) 573 840 w Cash generated through Operations (hee 4.2) TRL To Q Interest Paid oO is 32) | (a3 evo) / UA dininetins Pan (tis ceo = Setve t Ysece) (To cee 2 hive) ( 1% ee J w Tax Paid (- Nb Ise - 33 + Gace) C04 HoX) CASH EFFECT OF INVESTING ACTIVITIES TOTAL MARKS a 63 (1an 340) Tangible Assets Purchased ib tog a4 reocee ) ( 1308 WN | A disiosnt oF Tate ASSET AT Crea boo, Vatué Rev 4.0 (c) 47 bow 1G Investments / Fixed Deposit —_ _ | CASH EFFECT OF FINANCING ACTIVITES hd Soo Proceed from New Shares Issued Can/Sco FISiSe6 See coy i370 ceo @ Repurchase of Shares (asete « AG, 3) a (157 se) SH Nou Caonenr lansusies/ tons (Boo coo 50 cor) (850 oto) | NET CHANGE IN CASH AND CASH EQUIVALENTS (970 cee )Y Cash and Cash Equivalents : Beginning | (aseary-, w ag Cash and Cash Equivalents : Ending ( 97508 . ato) | Mewes V|| 35 Page 7 of 7

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