Accounting Grade 12 Paper 1 KZN June 2025 Question Paper

LIMPOPO PROVINCIAL GOVERNMENT REPUBLIC OF SOUTH AFRICA DEPARTMENT OF EDUCATION NATIONAL SENIOR CERTIFICATE GRADE 12 ee Se ee ee 2 ACCOUNTING P1 JUNE 2025 MARKS: 150 TIME: 2 hours This question paper consists of 14 pages, a formula sheet and a 10-page answer book.

Limpopo DoE/June 2025 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL questions. 2; A special ANSWER BOOK is provided in which to answer ALL questions. 3; Show ALL workings to earn part-marks. 4. You may use a non-programmable calculator. 6, You may use a dark pencil or biue/black ink to answer questions. 6. Where applicable, show ALL calculations to ONE decimal point. te If you choose to do so, you may use the Financial Indicator Formula Sheet attached at the end of this question paper. The use of this formula sheet is NOT compulsory. 8. Write neatly and legibly. 9. Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION TOPIC MARKS | MINUTES 1 Financial Statements 60 50 2 Cash Flow Statement, and Financial Indicators 40 30 3 Interpretation of Company Financial Information 35 30 4 GAAP, Audit Report, and Corporate Governance 15 10 TOTAL 150 120 Copyright reserved Please turn over

Limpopo DoE/June 2025 Question Paper QUESTION 1: FINANCIAL STATEMENTS (60 marks; 50 minutes) HE-LECTRIX LTD You are given the financial details of He-Lectrix Ltd for the year ending 28 February 2025. The company trades in Solar power system installation and maintenance. He-Lectrix Ltd adds a standard markup of 200% on the cost of goods sold. REQUIRED: Complete the following for the year ended 28 February 2025: 1.1. Statement of Comprehensive Income (35) 1.2. Retained Income note (8) 1.3. Statement of Financial Position; Equity and Liabilities Section (17) Copyright reserved Please turn over

Grizaddbommleaded from Stanmorephysics.com Limpopo DoE/June 2025 fe] INFORMATION: Question Pape! NOTE: SOME AMOUNTS ARE PROVIDED IN THE ANSWER BOOK A Extract: Balances from the Financial Statements on 29 February 2024 Balance Sheet Section R Ordinary share capital 37 440 000 Retained income 16 420 000 Equipment 1 160 000 Accumulated depreciation on Equipment 935 000 Provision for bad debts 23 500 Consumable stores on hand (consumable stores) 1 250 B Extract: Balances/ totals from Pre-Adjustment Trial Balances for the year ended 28 February 2025 Balance Sheet Section ) R Trading stock i 695 000 Debtors’ control ” 578 000 SARS: Income tax {provisional payment) 546 100 Loan: Scrooge Bank (8% p.a.) 312 000 Creditors control 714 000 Nominal Accounts Section Sales 15 900 000 Cost of sales Debtors’ allowances Discount allowed Fee income Discount received Consumable stores Ordinary share dividends Cc Shares and dividends: DATE DETAILS OF SHARES AND DIVIDENDS 1 March 2024 4 800 000 ordinary shares in issue. 31 May 2024 1 000 000 Additional Ordinary shares issued at R8,96 30 September 2024 Interim dividends of R928 000 were paid. It was recorded. 1 February 2025 250 000 Shares repurchased at R9,95 each. 28 February 2025 A final dividend of 18 cents per share was declared. Repurchased shares qualify for the final dividends. Copyright reserved Please turn over

Limpopo DoE/June 2025 D_ Additional information and adjustments that still need to be considered: (a) (b) (c) (f) (g) (h) (i) (k) (!) The R7 200 water bill for February 2025 has not yet been paid to the Municipality. A R32 000 payment for an advertisement campaign placed with News27 in February is still outstanding. News27 bought an extra solar panel for R7 500 from He-Lectrix Ltd, but the sale hasn’t been recorded. It was agreed that He-Lectrix Ltd could subtract this amount from the unpaid advertisement payment. The company donated a solar system to a local daycare, resulting in a missed gross profit of R12 400 since the goods were not sold. Consumable Stores: The bookkeeper forgot to reverse the transaction for the consumable stores on hand on the 1° of March 2024. Consumable stores worth R2 250 were ordered and recorded, but they have not been delivered yet as the suppiier is still waiting for certain items from Germany. The annual stock take indicated the following was on hand on 28 February 2025: e Consumable stores R 1960 e Trading Stock R 672 000 Depreciation on equipment is calculated at 20% per annum using the cost price method. When the tenant began renting on 1 March 2024, it was agreed that the rent would increase by only 5% on 1 November 2024, provided the tenant paid the R9 000 deposit for rent. The deposit was received but not recorded. The tenant still owes rent for February. The bank statement for February 2025 was received, highlighting the following items: e He-Lectrix Ltd has not yet recorded bank charges R390 and interest on the credit bank balance of R450. e An EFT payment of R7 200 was recorded in the books of He-Lectrix Ltd to settle an R8 000 account with a creditor. However, the bank could not process the payment due to an incorrect account number being entered by He-Lectrix Ltd. A debtor who owed R9 600 was declared insolvent. The estate has paid 45 cents on the rand, and the remaining balance must be written off as bad debt. No entries have been made for either of these transactions. The provision for bad debts must be adjusted to R22 736. A loan repayment of R24 000 is due on 31 May 2025. After all adjustments, an amount of R14 900 is still owed to SARS for the company tax. The earnings per share (EPS) was calculated at 26c on 28 February 2025. 60 Copyright reserved Please turn over

Limpopo DoE/June 2025 QUESTION 2: CASH FLOW STATEMENT, AND FINANCIAL INDICATORS (40 marks; 30 minutes) 2.1. DISKOM LTD The information relates to Diskom Ltd for the financial year ended 30 April 2025. REQUIRED: 2.1.1 Complete the Ordinary Share Capital note. (9) 2.1.2 Complete the following sections of the Cash Flow Statement: e Cash effects from operating activities (10) e Cash effects from investing activities (7) 2.1.3. Calculate the following financial indicators on 30 April 2025: e Current ratio (4) e % Return on average total capital employed (ROTCE) (6) e Interim dividends per share (4) Copyright reserved Please turn over

Limpopo DoE/June 2025 INFORMATION: A Extract from the Statement of Comprehensive Income on 30 April 2025: Sales 3 188 150 Depreciation 413 000 Interest expense 78 000 Net profit after tax 637 630 Note: The income tax rate is 30%. B_ Extract from the Statement of Financial Position on 30 April: 2025 2024 Fixed assets (carrying value) 4 094 900 3 830 000 Financial assets 190 000 Inventories 720 800 520 000 Trade and other receivabies 240 000 356 000 Cash and cash equivalents 56 600 6 500 Shareholders’ equity 6 062 000 5 124 800 Ordinary share capital 5 852 000 2? Retained income 210 000 420 800 Trade and other payables 90 440 SARS: Income tax 21 270 Dr 36 600 Cr Shareholders for dividends 2? 265 000 Bank Overdraft 0 38 400 Current liabilities 360 700 430 440 Capital Employed 7 100 000 6 000 800 Cc Fixed assets: e Extensions to land and buildings were completed during the year at a cost of R830 400. e Avehicle was sold during the year at carrying value. D Share capital and dividends: DATES DETAILS OF SHARES AND DIVIDENDS 2 100 000 authorised ordinary shares 1 May 2024 70% of the authorised shares were issued. 30 June 2024 300 000 additional shares were issued 30 September 2024 | An interim dividend was paid, R318 600 31 January 2025 230 000 shares were repurchased 40 Copyright reserved Please turn over

Limpopo DoE/June 2025 QUESTION 3: INTERPRETATION OF COMPANY FINANCIAL INFORMATION (35 marks; 30 minutes) REQUIRED: 3.1. CONCEPTS Match the concepts listed in COLUMN A with an explanation provided in COLUMN B. Write only the letter (A—G) next to each number (3.1.1—3.1.5) in the ANSWER BOOK. COLUMN A COLUMN B 3.1.1 | Liquidity A_ | Operating efficiency of the business. 3.1.2 | Profitability B_ | Provides credibility in the global economy to financial statements. 3.1.3 | Solvency C_ | Should be compared to the interest rates on investments offered by banks. 3.1.4 | IFRS D_ | Current asset : Current Liabilities 3.1.5 | ROSHE E | Interested in the profitability of the company. G_ | Total assets : Total liabilities (5x 1=5) NOTE: Provide figures, financial indicators, or calculations in EACH case to support your comments and explanations. 3.2. ELSALTD. AND ANNA LTD. You are presented with the financial information of two similar-sized companies operating in the frozen food sector. The financial year ended on 28 February 2025 for both companies. 3.2.1. The CEO of Anna Ltd believes that the company has shown a positive improvement in their liquidity situation because the current ratio has increased significantly to 3,6 : 1. Explain whether he is correct or not by quoting ONE other financial indicator, with figures, to support your answer. (4) 3.2.2 Calculate and compare the dividend pay-out policy of each company. (4) Give a possible reason why one company opted to adjust their policy. (2) 3.2.3 Elsa Ltd decided to increase their loans during the current financial year, whilst Anna Ltd chose to maintain their existing loans. Quote ONE financial indicator and comment on the degree of gearing of each company. (8) 3.2.4 A shareholder of Anna Ltd is worried because the value of the company's shares has gone down. Describe the reason for his concern. Quote and explain TWO financial indicators to support your answer. (4) Copyright reserved Please turn over

Limpopo DoE/June 2025 3.2.5 Olaf Snow owns 528 000 shares in Anna Ltd. He inherited R350 000 from his wealthy Uncle Kristoff, who sadly passed away. When Anna Ltd issued new shares on 1 December 2024, Olaf had the chance to purchase an additional 84 000 shares at 410 cents each. However, he chose to spend the R350 000 on a luxurious Christmas holiday in New York with his girlfriend instead of buying the extra shares. Clarify why Otaf's decision was a mistake. Discuss his % shareholding and provide TWO additional reasons, supported by figures or calculations, to support your explanation. (8) INFORMATION: [__ELSALTD ‘ANNA LTD 2025 2024 2025 2024 Current ratio 1,9:1 21:1 3,6:1 | 28:1 Acid test ratio Ast | Aas 15:1 | 1,5:1 Dividends per share _ 45 cents 65cents | 60cents | 62cents _ Earnings per share _ | 86 cents 80 cents 70 cents | 72 cents % return on average shareholders’ equity 13% | 11% 11,6% | 12% % return on average capital employed 15% | 12% 11,7% | 13% | Debt/equity ratio | 06:1 | O3:1 | 04:1 | 04:1 | | Net asset value per share 642 cents | 630cents | 610cents | 618 cents Market price per share 645 cents | 622 cents | 582cents | 615 cents Total number of shares issued — 1200000 | 1100000 Interest rate on loans 13% 13% Copyright reserved 35 Please turn over

QUESTION 4: GAAI Limpopo DoE/June 2025 P, AUDIT REPORT AND CORPORATE GOVERNANCE (15 marks; 10 minutes) 4.1. GAAP PRINCIPLES Match the GAAP principles listed in COLUMN A with an explanation provided in COLUMN B. Write only the letter (A-E) next to each number (4.1.1-4.1.4) in the ANSWER BOOK. COLUMN A COLUMN B 4.1.1 | Matching A | The owner's personal matters should be kept separate from the business records. cost 4.1.2 | Historical Major expenses, such as audit fees, should be presented separately in the financial statements. 4.1.3 | Materiality Losses should be recorded as soon as they are identified, even if they might be recovered later. Entity 4.1.4 | Business Income and expenses must be recorded in the period they are earned or incurred. m Oo; OF Assets are recorded at the purchase price, regardless of whether the market price is higher. 4.2 AUDIT REPO BARBI LTD. RT AND CORPORATE GOVERNANCE An extract from the audit report of Barbi Ltd. is provided below. REQUIRED: 4.2.1 Explain the role of the independent auditor. 4.2.2 Did Barbi Ltd receive a qualified, unqualified, or a disclaimer audit report? Explain your choice. 4.2.3. To whom is the audit report addressed? 4.2.4 The marketing expense on the Statement of Comprehensive Income relates to a spa and beauty treatment day arranged by the CEO for her friends. The CEO recommended to the external auditor that this transaction be excluded. Copyright reserved The external auditor was not willing to do this. Briefly explain why he feels this way. Provide TWO consequences for the auditor if he agrees to the recommendation of the CEO. Please turn over (4) (2) (2) (1) (2) (4)

Limpopo DoE/June 2025 INFORMATION: EXTRACT FROM THE REPORT OF THE INDEPENDENT AUDITORS Audit opinion: In our opinion, the financial statements fairly represent the financial position of Barbi Limited on 28 February 2025, except for the marketing expense in the Statement of Comprehensive Income which could not be verified, as no documentation existed for this expenditure. Marley & Kazuza Chartered Accountants (SA) 10 April 2025 15 TOTAL: 150 Copyright reserved Please turn over

Limpopo DoE/June 2025 GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit x 100 Gross profit x 100 Sales 1 Cost of sales 1 Net profit before tax x 100 Net profit after tax x 100 Sales 1 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 Credit sales 1 Average creditors x 365 Cost of sales 1 Net income after tax x 100 Average shareholders’ equity 1 Net income after tax__ x 100 Number of issued shares 1 (*See note below) Net income before tax + Interest on loans x 100 Average shareholders’ equity + Average non-current liabilities 1 Shareholders’ equity x 100 Dividends forthe 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 pershare x 100 Earnings per share 1 Dividends for the year x 100 Net income after tax ‘1 Total fixed costs Selling price per unit — Variable costs per unit NOTE: * In this case, if there is a change in the number of issued shares during a financial year, the weighted-average number of shares is used in practice. Copyright reserved urn over