Accounting Grade 12 Eastern Cape Mock 2020 QP (Eng)

Downloaded from hlayiso.com Name: NATIONAL SENIOR CERTIFICATE GRADE 12 SEPTEMBER 2020 ACCOUNTING P1 FINANCIAL REPORTING AND EVALUATION ANSWER BOOK MAXIMUM MARKS QUESTION MODERATED MARKS MARKS OBTAINED 1 15 2 30 3 30 4 40 5 35 150 This answer book consists of 11 pages.

Downloaded from hlayiso.com 2 ACCOUNTING P1 (ANSWER BOOK) (EC/SEPTEMBER 2020) QUESTION 1: CORPORATE GOVERNANCE AND AUDIT REPORT 1.1 1.1.1 1.1.2 1.1.3 1.1.4 4 1.2 AUDIT REPORT 1.2.1 Where, why and when is this audit report expected to be presented? Where Why When 3 1.2.2 Provide TWO points why the independent auditors make reference to pages 12–30 of the Annual Report. 4 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/SEPTEMBER 2020) ACCOUNTING P1 (ANSWER BOOK) 3 1.2.3 Explain TWO points on the impact of this report on the company. 4 TOTAL MARKS 15 Copyright reserved Please turn over

Downloaded from hlayiso.com 4 ACCOUNTING P1 (ANSWER BOOK) (EC/SEPTEMBER 2020) QUESTION 2: STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020. Sales 6 720 000 Cost of sales Gross profit Other operating income Gross operating income 2 662 080 Operating expenses Audit fees 120 000 Depreciation 340 000 Sundry expenses 432 110 Operating profit Interest income Operating profit before interest expense Interest expense Net profit before tax Income tax (272 700) Net profit after tax 30 TOTAL MARKS 30 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/SEPTEMBER 2020) ACCOUNTING P1 (ANSWER BOOK) 5 QUESTION 3: STATEMENT OF FINANCIAL POSITION AND SHARE CAPITAL NOTE 3.1 Share Capital Authorised Share Capital: 3 000 000 ordinary shares Issued Share capital: Shares in issue at beginning of 1 800 000 year (120 000)   Shares in issue at the end of the year  9 Copyright reserved Please turn over

Downloaded from hlayiso.com 6 ACCOUNTING P1 (ANSWER BOOK) (EC/SEPTEMBER 2020) 3.2 STATEMENT OF FINANCIAL POSITION ON 31 AUGUST 2020. NON-CURRENT ASSET Fixed assets 8 121 000 Financial assets 830 200 CURRENT ASSETS     TOTAL ASSETS   EQUITY AND LIABILITIES  SHAREHOLDER EQUITY  Ordinary share capital  Retained income 14 960 NON-CURRENT LIABILITIES   CURRENT LIABILITIES 1 097 840 Trade and other payables 463 840    TOTAL EQUITY AND LIABILITIES  21 TOTAL MARKS 30 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/SEPTEMBER 2020) ACCOUNTING P1 (ANSWER BOOK) 7 QUESTION 4: CASH FLOW STATEMENT, FINANCIAL INDICATORS 4.1 4.1.1 4.1.2 4.1.3 3 4.2.1 CASH GENERATED FROM OPERATIONS Depreciation 390 000 Interest expense 452 000 Change in inventory (915 100) Change in receivables Change in payables Cash generated from operations 9  4.2.2 CASH EFFECT FROM FINANCING ACTIVITIES  7  Copyright reserved Please turn over

Downloaded from hlayiso.com 8 ACCOUNTING P1 (ANSWER BOOK) (EC/SEPTEMBER 2020) 4.2.3 Calculate the following amounts for the Cash Flow Statement. Income tax paid Workings Answer 4 Dividends paid Workings Answer 7 Proceeds on fixed assets sold Workings Answer 4 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/SEPTEMBER 2020) ACCOUNTING P1 (ANSWER BOOK) 9 4.2.4 Calculate the following financial indicators on 29 February 2020: Return on average Shareholders’ Equity Workings Answer 4 Net asset value per share Workings Answer 2 TOTAL MARKS 40 Copyright reserved Please turn over

Downloaded from hlayiso.com 10 ACCOUNTING P1 (ANSWER BOOK) (EC/SEPTEMBER 2020) QUESTION 5: INTERPRETATION OF COMPANY INFORMATION 5.1 Compare the liquidity position of both companies and comment on the company that is managing the short term assets more effectively. LOCK LTD DOWN LTD COMMENT 6 5.2 Compare the dividend pay-out policy of each company. LOCK LTD DOWN LTD 4 Provide TWO possible reasons why one company decided to change their policy. 4 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/SEPTEMBER 2020) ACCOUNTING P1 (ANSWER BOOK) 11 5.3 Lock Ltd decided to increase their loans during the current financial year, whilst Down Ltd decided to maintain their existing loans. Comment on the decisions of both companies. Make reference to the degree of risk and gearing LOCK LTD DOWN LTD 8 5.4 A shareholder of Down Ltd is concerned about the drop in the market price of the shares. Explain why they feels this way. Provide TWO points. 4 5.5 M. Mtolo owns 576 000 shares in Down Ltd, which represents 48% of the total issued shares. He wants to purchase another 25 000 shares. 5.5.1 Do a calculation to show how this would change his % shareholding in the company. 5 5.5.2 Provide TWO reasons why you think he is specifically interested in increasing his shareholding in Down Ltd. 4 TOTAL MARKS 35 TOTAL: 150 Copyright reserved Please turn over