Accounting Grade 12 NW Prelim 2019 Question Paper

Downloaded from hlayiso.com NAME: NATIONAL SENIOR CERTIFICATE ACCOUNTING GRADE 12 SEPTEMBER 2019 SPECIAL ANSWER BOOK MARKS QUESTION MAX MARKS AWARDED MODERATOR 1 20 2 40 3 50 4 85 5 75 6 30 TOTAL 300 This answer book consists of 19 pages. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 2 NW/September 2019 NSC – Answer Book QUESTION 1 1.1 CONCEPTS 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 5 1.2.1 Calculate the amount owning to SARS in respect of VAT at the end of February 2019 after taking the transactions into account. No. Calculation Amount owing to SARS A B C D E F G H 13 1.2.2 Pro Party Shop is experiencing cash flow problems and there is no money available to pay SARS. The bank account shows an overdraft of R52 110 on 31 January 2019. The directors have asked the accountant to reduce the sales amount so that the business will then receive a refund from SARS. Must the accountant go along with this suggestion? Give ONE reason for your decision. 2 TOTAL MARKS 20 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 NW/September 2019 NSC – Answer Book QUESTION 2 2.1 BANK RECONCILIATION AND INTERNAL CONTROL 2.1.1 According to the January Bank Statement, does Rose Boutique have a favourable or unfavourable bank balance? Give a reason for your answer. 2 2.1.2 Calculate the Bank balance according to the books of Rose Boutique on 31 January 2019. State whether this balance is favourable or unfavourable. 7 2.1.3 The Reconciliation Statement for January 2019 shows an error that was made by the bank. Give ONE example of the type of error the bank could have made in this instance. 2 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 4 NW/September 2019 NSC – Answer Book 2.1.4 There are large outstanding deposits on the Bank Reconciliation Statement provided by the bookkeeper. On investigation it appears that these funds were in fact received by the cashier on 20 and 25 January 2019. (a) What concern should you have regarding the deposits? 1 (b) Provide TWO solutions to ensure that this does not happen in future. 4 2.1.5 Rose Boutique issued a post-dated cheque no. 510 (dated 15 April 2019). Explain how this cheque will be handled in the financial statements on the financial year end, 28 February 2019. 2 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 5 NW/September 2019 NSC – Answer Book 2.2 CREDITORS’ RECONCILIATION AND INTERNAL CONTROL 2.2.1 CREDITORS’ RECONCILIATION STATEMENT ON 30 JUNE 2019 R Calculate the correct balance of Bailey Ltd. in the Creditors’ Ledger. 13 2.2.2 Refer to Information D. Calculate the average creditors’ payment period in days. 5 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 6 NW/September 2019 NSC – Answer Book 2.2.3 Provide TWO internal control measures which can be implemented by a business for good internal control over creditors. 4 TOTAL MARKS 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 7 NW/September 2019 NSC – Answer Book QUESTION 3 3.1 3.1.1 3.1.2 3.1.3 3.1.4 3.1.5 5 3.2 N’SYNC MANUFACTURERS 3.2.1 Calculate the value of the raw material on hand on 28 February 2019, using the weighted-average method. Calculation Answer 4 3.2.2 Calculate the value of the direct material issued for production. Calculation Answer 3 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 8 NW/September 2019 NSC – Answer Book 3.2.3 Prepare the note for Factory overhead cost. R Factory overhead cost 616 280 Indirect material Insurance 12 3.2.4 PRODUCTION COST STATEMENT ON 28 FEBRUARY 2019 R Direct material cost Direct labour cost Prime cost Factory overhead cost Manufacturing cost Work-in-progress: Beginning 65 050 Work-in-progress: End Total cost of production 14 3.3 CRAFTY WOOD 3.3.1 Calculate the break-even point for 2018. Calculation Answer 6 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 9 NW/September 2019 NSC – Answer Book 3.3.2 Calculate the units produced and sold for 2018. Calculation Answer 2 3.3.3 Explain whether you think the owner, Jenny, should or should not be concerned about the profitability and sustainability of her business. Provide TWO reasons and justify your answer by providing supporting figures. 4 TOTAL MARKS 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 10 NW/September 2019 NSC – Answer Book QUESTION 4 4.1 Choose a GAAP principle in COLUMN B that matches the description in COLUMN A. 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 5 4.2.1 (a) ORDINARY SHARE CAPITAL Authorised shares: 1 000 000 ordinary shares Issued share capital: Ordinary shares on 1 July 2018 Ordinary shares on 30 June 2019 10 (b) RETAINED INCOME Balance on 1 July 2018 Net profit after income tax Ordinary share dividends Balance on 30 June 2019 13 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 11 NW/September 2019 NSC – Answer Book 4.2.2 SAHARA LTD BALANCE STATEMENT ON 30 JUNE 2019 ASSETS NON-CURRENT ASSETS Fixed Assets CURRENT ASSETS Inventory Trade and other receivables Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES SHAREHOLDERS EQUITY NON-CURRENT LIABILITIES Loan: Quality Bank CURRENT LIABILITIES Trade and other payables Shareholders for dividends TOTAL EQUITY AND LIABILITIES 46 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 12 NW/September 2019 NSC – Answer Book 4.3 AUDIT REPORT 4.3.1 Provide ONE reason why public companies must be externally audited. 2 4.3.2 What type of report did Giovanni Ltd receive from the independent auditors? Explain your answer. Type: Explanation: 3 4.3.3 Refer to information B. One of the directors says that “the company must not waste money on things like this.” Provide THREE reasons against his opinion. 6 TOTAL MARKS 85 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 13 NW/September 2019 NSC – Answer Book QUESTION 5 5.1 FIXED ASSETS 5.1.1 Calculate the cost price of the delivery vehicle that was traded in on 31 August 2018. Calculation Answer 4 5.1.2 Calculate the missing figures as indicated by (i)–(iv) on the fixed asset note. No. Calculations Answer (i) (ii) (iii) (iv) 14 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 14 NW/September 2019 NSC – Answer Book 5.2 CASH FLOW STATEMENT 5.2.1 Reconciliation between profit before taxation and cash generated from operations. R Adjustment in respect of: Operating profit before changes in working capital: Changes in working capital: Cash generated from operations 17 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 15 NW/September 2019 NSC – Answer Book 5.2.2 Cash effects of operating activities 13 5.2.3 Net change in cash and cash equivalents Cash and cash equivalents : Beginning Cash and cash equivalents : End 4 5.3 INTERPRETATION AND ANALYSIS 5.3.1 Comment on the following financial indicators: Comment with figures Reason for change (a) % gross profit on the cost of sales 3 (b) % operating expenses on sales 3 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 16 NW/September 2019 NSC – Answer Book 5.3.2 From 2017 to 2018 the directors made a well-considered decision to change the policy on the distribution of profit in the form of dividends. Explain this change. Quote figures or calculations to support your answer. 4 5.3.3 Shareholders are satisfied with the issue price of the new shares. Quote TWO financial indicators with figures to support this statement. 4 5.3.4 One of the directors feel that the loan should be paid as soon as possible. Do you agree? Quote TWO financial indicators with figures to support your opinion. Opinion: Financial indicators with figures: 5 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 17 NW/September 2019 NSC – Answer Book 5.3.5 The shareholders should be satisfied with the return on their investment and the companies’ earnings. Explain TWO financial indicators with figures to support this opinion. 4 TOTAL MARKS 75 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 18 NW/September 2019 NSC – Answer Book QUESTION 6 6.1 Complete the Debtors’ Collection Schedule for August 2019. DEBTORS’ COLLECTION SCHEDULE FOR AUGUST 2019 CREDIT SALES AUGUST May 42 000 June 49 200 July 43 200 August 33 600 6 6.2 Calculate the missing amounts indicated by (i)–(iv) on the Cash Budget. No. Calculations Answer (i) (ii) (iii) (iv) 11 6.3 Refer to Information A and E. The workers are dissatisfied with the increases they will be receiving in August 2019. They have also indicated that they will embark on strike action in October 2019 if the owner does not address their concerns. Give ONE reason (with figures) that the owner could use to justify the increase he granted to the workers in August 2019. 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 19 NW/September 2019 NSC – Answer Book 6.4 Refer to Information A and G. The owner requires your comment regarding the new vehicle. Apart from the deposit and the monthly instalment of R6 250, explain how the next Cash Budget will be affected. State THREE points. 3 6.5 Refer to Information H. At the end of August 2019 the following figures were identified. The owner has asked that you explain to him why the budgeted and actual amounts of certain items differ significantly. Comment on the control of the following items in September 2019. Provide ONE point of advice to Terry in respect of each item. COMMENT ADVICE ADVERTISING: PACKING MATERIALS: 6 TOTAL MARKS 30 TOTAL: 300 Copyright reserved