Accounting Grade 12 NSC November 2013 Question Paper (Eng)

Downloaded from hlayiso.com GRAAD 12 NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING NOVEMBER 2013 MARKS: 300 TIME: 3 hours This question paper consists of 24 pages and an 18-page answer book. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 2 DBE/November 2013 NSC INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL the questions. 2. A special ANSWER BOOK is provided in which to answer ALL the questions. 3. Show workings in order to achieve part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or blue/black ink to answer the questions. 6. Calculate to ONE decimal place. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 DBE/November 2013 NSC 7. Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION 1: 35 marks; 20 minutes Topic of the question: Learning outcomes covered: LO1 Financial accounting Concepts, company AS1 Concepts transactions and debtors' AS2 Ledger accounts reconciliation AS3 Accounting equation AS4 Interpret reconciliation QUESTION 2: 35 marks; 20 minutes Topic of the question: Learning outcomes covered: LO2 Managerial accounting AS2 Production Cost Statement Manufacturing AS2 Unit costs and break-even point LO3 Managing resources AS6 Internal control and audit QUESTION 3: 75 marks; 45 minutes Topic of the question: Learning outcomes covered: LO1 Financial accounting Company financial statements AS5 Financial statements and notes and audit report AS6 Audit report QUESTION 4: 60 marks; 35 minutes Topic of the question: Learning outcomes covered: LO1 Financial accounting AS5 Cash Flow Statement Cash flow and interpretation of AS5 Analyse and interpret financial statements LO3 Managing resources AS5 Ethics QUESTION 5: 40 marks; 25 minutes Topic of the question: Learning outcomes covered: LO2 Managerial accounting AS3 Analyse and interpret Cash Budget LO3 Managing resources AS6 Internal control and audit QUESTION 6: 55 marks; 35 minutes Topic of the question: Learning outcomes covered: LO1 Financial accounting AS5 Financial statements LO3 Managing resources Fixed assets, inventory AS3 Interpret and report on asset disposal valuation and internal control AS4 Validate and calculate inventories AS5 Ethics AS6 Internal control and audit Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 4 DBE/November 2013 NSC QUESTION 1: CONCEPTS, COMPANY TRANSACTIONS AND DEBTORS' RECONCILIATION (35 marks; 20 minutes) 1.1 CONCEPTS REQUIRED: Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question number (1.1.1–1.1.3) in the ANSWER BOOK. 1.1.1 The concept that states that the financial affairs of the owner must be kept separate from the financial affairs of the business is the (business entity concept/going-concern concept). (2) 1.1.2 In the event of bankruptcy, the shareholders are not responsible for the debts of the business. This is because of (limited/unlimited) liability. (2) 1.1.3 In the financial statements, debtors will be shown as trade and other (equity/receivables/payables). (2) 1.2 COMPANY TRANSACTIONS REQUIRED: Use the table provided to indicate the following for each transaction: • Account debited and account credited in the General Ledger • Effect on the accounting equation The bank balance is favourable at all times. Example: Directors' fees paid, R145 000. ACCOUNT ACCOUNT NO. AMOUNT A O L DEBITED CREDITED e.g. Directors' fees Bank 145 000 – – 0 TRANSACTIONS: 1.2.1 The amount owing to SARS at the end of the previous financial year for income tax was paid, R37 400. 1.2.2 Received R180 000 for additional shares issued at par value. 1.2.3 A final dividend of R55 000 was declared by the directors at the end of the current financial year. (12) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 5 DBE/November 2013 NSC 1.3 DEBTORS' RECONCILIATION You are the internal auditor of Rose's Boutique. The Debtors' Control account and the Debtors' List for September 2013 were prepared by the bookkeeper, but there are some errors and omissions. REQUIRED: 1.3.1 Indicate the corrections that must be made to the Debtors' Control account in the General Ledger by showing the amounts with: + for increase; – for decrease OR write 'no change'. (7) 1.3.2 Prepare the correct Debtors' List on 30 September 2013. Show workings with the relevant amounts in brackets to earn part-marks. (10) INFORMATION: 1. Pre-adjustment figures on 30 September 2013 R Debtors' Control account balance 20 100 Debtors' List total from Debtors' Ledger 19 900 2. Debtors' List on 30 September 2013 Debit Credit T Stoffels 3 800 E Khune 7 400 S Mashele 1 900 M Devnarain 10 600 21 800 1 900 3. Errors and omissions: A The total of the Debtors' Journal was overcast by R1 800. B Interest of R200 must be charged on the overdue account of E Khune. C An amount of R3 200 received from T Stoffels was incorrectly recorded as R2 300 in the Cash Receipts Journal and posted accordingly to the Debtors' Ledger and the General Ledger. D Merchandise returned by M Devnarain, R800, was posted to the wrong side of his account in the Debtors' Ledger. E No entry was made for an invoice issued to S Mashele, R1 400. 35 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 6 DBE/November 2013 NSC QUESTION 2: MANUFACTURING (35 marks; 20 minutes) 2.1 COST ACCOUNTS REQUIRED: Choose a cost category from COLUMN B that matches a description in COLUMN A. Write only the letter (A–D) next to the question number (2.1.1–2.1.4) in the ANSWER BOOK. COLUMN A COLUMN B 2.1.1 Raw materials used in the factory A direct labour cost 2.1.2 Advertising expenses B factory overhead cost 2.1.3 Office telephone account C selling and distribution cost 2.1.4 Salary of the factory foreman D administration cost E direct material cost (4 x 2) (8) 2.2 PROTEA MANUFACTURERS Protea Manufacturers make one style of uniforms (overalls). The financial year ends on 31 August 2013. REQUIRED: 2.2.1 Provide the missing figures in the: • Production Cost Statement (8) • Note for Factory Overhead Cost (5) 2.2.2 The internal auditor is not satisfied with the direct labour cost for the year. • Explain the problem relating to the direct labour cost and quote figures to support your explanation. (3) • Give TWO possible solutions to this problem. (4) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 7 DBE/November 2013 NSC INFORMATION: 1. Production Cost Statement for the year ended 31 August 2013 Direct material cost ? Direct labour cost 985 600 Prime cost ? Factory overhead cost 94 980 Total manufacturing cost ? Work-in-process (1 September 2012) 12 420 ? Work-in-process (31 August 2013) ? Cost of production of finished goods ? 2. Direct material cost Fabric was issued from storeroom to factory using the weighted- average method. Quantity Cost per Total cost (metres) metre Stock on 1 September 2012 10 000 m R 9,00 R 90 000 Purchases of fabric 30 000 m 12,00 360 000 40 000 m 450 000 Issued to factory 28 000 m ? ? Stock on 31 August 2013 12 000 m ? ? 3. Direct labour cost Hours Rate Workers Total Normal time 1 200 R32,00 10 R384 000 Overtime 880 R64,00 10 R563 200 Employer's contributions R 38 400 R985 600 Information 4 on next page. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 8 DBE/November 2013 NSC 4. Allocation of cost items Refer to the relevant cost statements on the next page. 4.1 Factory rent is divided among factory, sales and administration in the ratio 5 : 2 : 1. 4.2 75% of the water and electricity expense must be allocated to the factory and the rest is an administration expense. 5. Factory overhead cost Indirect material 7 360 Indirect labour 22 230 Depreciation of factory plant 8 630 Rent expense ? Water and electricity ? Sundry expenses ? 94 980 6. Administration cost Rent expense 6 600 Insurance 8 860 Water and electricity 6 840 Stationery 3 440 Sundry expenses 24 560 50 300 7. Production and sales 21 400 overalls were produced and sold during the financial year. The cost of production of finished goods was R65,00 per unit. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 9 DBE/November 2013 NSC 2.3 SALLY'S STATIONERY BAGS Sally Venter makes fabric stationery bags which she sells to learners. REQUIRED: 2.3.1 Calculate the number of units that Sally needed to produce in order to break even in 2013. (4) 2.3.2 Comment on the number of bags she is producing. Quote figures or financial indicators to support your answer. Refer to the break-even calculation in your answer. (3) INFORMATION: 1. During the year, 12 860 units were produced and sold. 2. The selling price per unit was R30,00. 3. Variable and fixed costs: 2013 2012 Variable costs: TOTAL PER UNIT PER UNIT Direct material R128 600 R10,00 R12,20 Direct labour 102 880 8,00 7,00 Selling and distribution 51 440 4,00 3,80 R282 920 R22,00 R23,00 Fixed costs: Factory overheads R77 160 R6,00 Administration 19 290 1,50 R96 450 R7,50 35 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 10 DBE/November 2013 NSC QUESTION 3: COMPANY FINANCIAL STATEMENTS AND AUDIT REPORT (75 marks; 45 minutes) 3.1 Give ONE word/term for each of the following descriptions by choosing a word/term from the list below. Write only the word/term next to the question number (3.1.1–3.1.4) in the ANSWER BOOK. current asset; non-current asset; income; expense; current liability; non-current liability 3.1.1 Profit on the sale of an asset is a/an ... 3.1.2 The portion of a loan that will have to be repaid within a year is a/an ... 3.1.3 Consumable stores on hand are a/an ... 3.1.4 Interest on a bank overdraft is a/an ... (8) 3.2 SELATI LIMITED You are provided with information for the financial year ended 30 June 2013. REQUIRED: 3.2.1 Complete the Income Statement. (54) 3.2.2 Prepare the note for Retained Income. (7) INFORMATION: EXTRACT FROM THE TRIAL BALANCE ON 30 JUNE 2013: Balance Sheet Accounts Section R Ordinary share capital (R2 par value) 4 500 000 Share premium 790 000 Retained income (1 July 2012) 735 000 Trading stock 1 534 000 Debtors' control 521 300 Provision for bad debts 22 000 Creditors' control 786 800 Loan: Puma Bank 630 000 Bank (Dr) 129 400 SARS: Income tax (Dr) 260 000 Pension fund 15 800 Unemployment Insurance Fund (UIF) 2 300 Fixed deposit: Sharp Bank 450 000 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 11 DBE/November 2013 NSC Nominal Accounts Section R Sales ? Cost of sales 8 200 000 Salaries and wages 788 000 Directors' fees 1 840 000 Audit fees 88 000 Employer's contribution (Pension and UIF) 81 000 Bank charges 31 000 Sundry expenses 89 730 Bad debts 12 100 Rent income 69 160 Interest on fixed deposit 27 000 Repairs and maintenance 125 600 Packing material 43 900 Ordinary share dividends (interim) ? ADJUSTMENTS AND ADDITIONAL INFORMATION: 1. The auditors are owed a further R7 500. 2. Goods are sold at a mark-up of 60% on cost price. The company held discounted cash sales during the year to clear excess stock. The total of trade discount given to customers was R702 000. 3. Packing material to the value of R41 000 was used during the year ended 30 June 2013. 4. Interest on the bank overdraft, R2 800, is included in the bank charges. 5. No entries have been made for stock stolen at the beginning of June 2013. The insurance company has informed Selati Ltd that they have transferred R32 000 into the business' bank account in respect of the insurance claim. Selati Ltd bears 20% of any stock loss. 6. A physical stocktaking on 30 June 2013 reflected that stock to the value of R1 475 500 was on hand. 7. An amount of R1 700 received from M Mpoani had been credited to the Debtors' Control Account in June 2013. The account of M Mpoani was written off as a bad debt during May 2013. The provision for bad debts must be adjusted to 4% of outstanding debtors. Adjustment 8 on next page. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 12 DBE/November 2013 NSC 8. One employee was omitted from the Salaries Journal for June 2013. His salary details are: Deductions Employer's Contribution Net salary 2 020 1 610 4 980 9. EZ Builders was paid R105 000 for the construction of a storeroom (R80 000) and repairs to paving (R25 000). The entire amount was debited to Land and Buildings in error. 10. The loan statement from Puma Bank on 30 June 2013 reflected: Balance at beginning of financial year R1 470 000 Repayments during the year 840 000 Interest capitalised ? Balance at end of financial year 750 000 11. Rent income for July 2013 has already been received. The monthly rent was increased by 10% on 1 May 2013. 12. Depreciation is the missing figure in the Income Statement. 13. Net profit and tax: • After taking all adjustments into account, the correct net profit after tax is R588 000. • The income tax rate is 30% of net income before tax. 14. Shares and dividends: • Interim dividends of 14 cents per share were declared and paid on 31 December 2012. • 250 000 shares were issued on 1 January 2013. This was properly recorded. • Final dividends of 10 cents per share were declared on 30 June 2013. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 13 DBE/November 2013 NSC 3.3 AUDIT REPORT EXTRACT FROM THE REPORT OF THE INDEPENDENT AUDITORS We have audited the annual financial statements of Selati Ltd for the year ended 30 June 2013. These financial statements are the responsibility of the company's directors. Basis for Disclaimer of Opinion During the course of our audit we established that bonuses paid to directors amounting to R1,5m had not been authorised by the Remuneration Committee. Furthermore, no documentation is available for sundry expenses of R75 000. Audit Opinion Because of the significance of the matter described above, we have not been able to obtain sufficient audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements of Selati Ltd for the year ended 30 June 2013. Morley and Associates, Chartered Accountants (SA) REQUIRED: As a shareholder, why would you be concerned about this audit report? Explain. State THREE points. (6) 75 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 14 DBE/November 2013 NSC QUESTION 4: CASH FLOW AND INTERPRETATION OF FINANCIAL STATEMENTS (60 marks; 35 minutes) You are provided with information for the financial year ended 28 February 2013 for Jumbo Cellphones Ltd, a public company listed on the JSE. REQUIRED: 4.1 Refer to Information 8 below regarding the special programmes that are published with the financial statements in the annual report. 4.1.1 Why would the directors want to spend money on these programmes? Explain the main benefit of EACH programme for the company. (4) 4.1.2 Apart from the points mentioned above, why would the directors want to mention these programmes in the annual report? Explain. (2) 4.2 Provide the missing figures indicated by A to F in the Cash Flow Statement. Show workings to earn part-marks. (15) 4.3 Calculate the financial indicators below for the financial year ending 28 February 2013. Show all workings to earn part-marks. 4.3.1 Percentage net profit after tax on sales (3) 4.3.2 Earnings per share (3) 4.3.3 Debt-equity ratio (3) 4.3.4 Return on average shareholders' equity (ROSHE) (5) 4.4 The directors are of the opinion that the operating efficiency of the company has improved. Quote and explain TWO financial indicators (with figures) to support their opinion. (4) 4.5 The shareholders are happy with their return, earnings and dividends. Quote and explain THREE financial indicators (with figures) to support their opinion. (6) 4.6 New shares were issued at the beginning of the financial year at R9,00 each. As an existing shareholder, would you be satisfied with this issue price? Quote TWO financial indicators (with figures) to explain your opinion. (5) 4.7 A large loan repayment was made. Comment on whether this was a good idea or not. Quote TWO financial indicators (with figures) to support your comment. (4) 4.8 Apart from the dividends and the loan, what other major decisions by the directors are reflected in the Cash Flow Statement? State TWO major decisions and quote the relevant figures. Also explain how EACH of these decisions would benefit the company in future. (6) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 15 DBE/November 2013 NSC INFORMATION: 1. The company has an authorised share capital of 4 000 000 ordinary shares (par value R5,00 each). 2. Information extracted from the 2013 Income Statement: Sales 6 200 000 Depreciation 120 000 Interest on loan 168 000 Net profit before tax 1 200 000 Net profit after tax 840 000 3. Information extracted from the Balance Sheet: 2013 2012 Fixed Assets (carrying value) 7 125 000 6 931 000 Current Assets 575 000 419 000 Inventories 135 000 80 000 Accounts receivable 362 000 328 000 SARS (Income tax) - 9 000 Cash and cash equivalents 78 000 2 000 TOTAL ASSETS 7 700 000 7 350 000 Shareholders' Equity 5 285 000 4 000 000 Ordinary share capital (par value R5) 3 500 000 3 000 000 Share premium 1 200 000 800 000 Retained income 585 000 200 000 Non-current Liabilities: Venus Bank (8% p.a.) 2 100 000 2 800 000 Current Liabilities 315 000 550 000 Accounts payable 112 000 158 000 SARS (Income tax) 28 000 - Shareholders for dividends 175 000 210 000 Bank overdraft - 182 000 TOTAL EQUITY AND LIABILITIES 7 700 000 7 350 000 4. New shares were issued on 1 March 2012 at R9,00 each. 5. An interim dividend of R280 000 was paid on 30 June 2012. Information 6 on next page. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 16 DBE/November 2013 NSC 6. The following financial indicators were calculated for the past two years: 2013 2012 Net profit after tax on sales ? 11,3% Operating expenses on sales 25% 32% Operating profit on sales 22% 15,8% Return on average shareholders' equity (ROSHE) ? 15,2% Earnings per share (EPS) ? 90 cents Dividends per share (DPS) 65 cents 82 cents Return on average capital employed (ROTCE) 19,3% 15,2% Debt-equity ratio ? 0,7 : 1 Interest rate on borrowed funds 8% 8% Net asset value per share (NAV) 755 cents 667 cents Market value per share 840 cents 820 cents 7. CASH FLOW STATEMENT FOR YEAR ENDED 28 FEBRUARY 2013 CASH EFFECTS OF OPERATING ACTIVITIES Cash generated from operations Interest paid (168 000) Income tax paid A Dividends paid B CASH EFFECTS OF INVESTING ACTIVITIES (314 000) Fixed assets purchased (400 000) Proceeds from sale of fixed assets 86 000 CASH EFFECTS OF FINANCING ACTIVITIES Proceeds of shares issued C Increase/Decrease in loans D NET CHANGE IN CASH AND CASH EQUIVALENTS E Cash and cash equivalents at beginning of year F Cash and cash equivalents at end of year 78 000 8. The published annual report reflected that the company had spent money on the following special programmes: Programme A: Donation of R200 000 to the local neighbourhood committee to combat crime Programme B: Staff training costing R200 000 60 Copyright reserved Please turn over

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Downloaded from hlayiso.com Accounting 18 DBE/November 2013 NSC QUESTION 5: CASH BUDGET (40 marks; 25 minutes) You are provided with the Debtors' Collection Schedule and an extract from the Cash Budget of Leboni Traders for the three months ending 31 March 2014. The owner is Peter Leboni. REQUIRED: 5.1 Complete the following sentences by filling in the missing word(s). Write only the word(s) next to the question number (5.1.1–5.1.3) in the ANSWER BOOK. 5.1.1 The main purpose of preparing the Cash Budget is ... (2) 5.1.2 ONE item in the Cash Budget that will not be reflected in a Projected Income Statement is ... (2) 5.1.3 ONE item that will appear in a Projected Income Statement but not in a Cash Budget is ... (2) 5.2 Refer to Information 1 to 7 below. Calculate the missing figures in the Debtors' Collection Schedule and the Cash Budget indicated by A to H. (22) 5.3 Explain what you would say to Peter about each of the following items at the end of November, and give ONE point of advice in EACH case: NOVEMBER 2013 BUDGET ACTUAL Telephone R1 000 R5 500 Sundry expenses R3 000 R3 000 Rent income R6 500 R3 000 (6) 5.4 In order to increase sales and the number of customers, Peter intends to advertise that credit limits for all credit customers will be increased to R35 000 and that new customers are welcome to open accounts during April. Give THREE points of advice to Peter in this regard. (6) INFORMATION: 1. Sales, purchases and cost of sales: • Total sales expected: 2014 January February March R500 000 R350 000 R300 000 • 60% of sales are on credit, the rest are for cash. • The business uses a mark-up of 100% on cost at all times. • Stock is replaced monthly. • 20% of all purchases are for cash, the rest are on credit. • Creditors are paid TWO months after the purchase of stock. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 19 DBE/November 2013 NSC 2. Debtors' collection: The credit limit for each debtor is R25 000. In the past, debtors have settled their accounts as follows. Leboni Traders prepares its budget on this basis: • 20% of debtors settle accounts in the month of the sale to receive a 5% discount. • 30% settle in the 1st month following the sales month (30 days). • 40% settle in the 2nd month (60 days). • 10% are written off in the 3rd month. 3. Debtors' Collection Schedule: 2014 Credit January February March sales R R R R November 345 000 138 000 Actual December 480 000 144 000 192 000 January 300 000 57 000 90 000 A Expected February 210 000 39 900 63 000 March 180 000 B 339 000 321 900 C 4. Extract from the Cash Budget: 2014 January February March R R R RECEIPTS: Cash sales 200 000 D 120 000 Receipts from debtors 339 000 321 900 C Rent income Loan from KZ Bank (12%) 400 000 PAYMENTS: Cash purchases 50 000 35 000 30 000 Payments to creditors 320 000 320 000 E Interest on loan 4 000 F Repayment of loan 40 000 40 000 Wages 32 500 22 048 G Advertising H 6 758 6 758 Sundry expenses Cash balance at end of month 350 000 200 000 (50 000) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 20 DBE/November 2013 NSC 5. Loan and interest on loan: The interest on the loan and the monthly loan instalments are payable at the end of each month. Interest is not capitalised. 6. Wages: • In January the business will have five employees, each earning a wage of R1 300 per week. • All the employees are paid their wages on Fridays. There are five Fridays in January and four Fridays in February and March 2014. • One employee will resign on 31 January 2014 and the other employees will be given a 6% increase on that date. • The business plans to employ two more staff members at the same weekly wage as the others on 1 March 2014. 7. Advertising: The advertising budget will be increased by 9% with effect from 1 February 2014. 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 21 DBE/November 2013 NSC QUESTION 6: FIXED ASSETS, INVENTORY VALUATION AND INTERNAL CONTROL (55 marks; 35 minutes) 6.1 FIXED ASSETS You are provided with details of the fixed assets of Ulwazi Ltd. The financial year ends on 31 March 2013. REQUIRED: 6.1.1 Calculate the missing figures indicated by A, B and C in the Fixed Assets Note below. (9) 6.1.2 Prepare the Asset Disposal Account for the computer sold on 31 January 2013. (11) 6.1.3 You are the internal auditor. State TWO concerns that you would voice in respect of the fixed assets with the board of directors. Explain in EACH case why you are concerned. (4) INFORMATION: 1. Fixed Assets Note: Land and Equipment Vehicles buildings Carrying value (1 April 2012) 3 000 000 184 000 560 000 Cost 3 000 000 258 000 780 000 Accumulated depreciation ( - ) (220 000) Movements: Additions (cost) 360 000 Disposals (carrying value) A Depreciation B Carrying value (31 March 2013) 2 100 000 Cost 2 100 000 240 000 1 140 000 Accumulated depreciation ( - ) C 2. Unused land was sold for cash at cost to solve cash-flow problems. This property was bought by Pedoma (Pty) Ltd. The majority shareholder in this company is Betty Benson, the CEO's wife. Information 3 on next page. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 22 DBE/November 2013 NSC 3. A computer (equipment) was sold for R800 cash to the CEO, Ben Benson, on 31 January 2013. FIXED ASSET REGISTER E22189 Item: IT3 Laptop Cost: R18 000 Date purchased: 1 October 2010 Rate of depreciation: 25% p.a. on cost ACCUMULATED CARRYING DEPRECIATION DEPRECIATION VALUE 31 March 2011 R2 250 R2 250 R15 750 31 March 2012 R4 500 R6 750 R11 250 31 January 2013 ? ? ? 4. A new vehicle costing R360 000 was purchased on 30 June 2012. 5. Depreciation is written off on Vehicles at 20% p.a. on the diminishing-balance method. 6.2 INVENTORY VALUATION AND INTERNAL CONTROL You are provided with information relating to Fast Save Traders owned by Mohammed Khan. The business sells school shirts. Their financial year ends on 31 July 2013. The business uses the FIFO (first in first out) method to value stock. The periodic inventory system is used. 6.2.1 Calculate the value of closing stock according to the FIFO method on 31 July 2013. (7) 6.2.2 Calculate: • Mark-up percentage (%) achieved on cost (4) • Stock holding period (use average stock in your calculation) (4) 6.2.3 The business aims at a mark-up of 30% on cost. As the internal auditor, what would you investigate? Explain. State TWO points. (4) 6.2.4 The stock holding period for 2012 was 30 days. Should Mohammed be satisfied with the stock holding period for 2013? Explain. (3) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 23 DBE/November 2013 NSC INFORMATION: 1. Sales and cost of sales for the year: TOTAL Sales (3 600 shirts at R140 each) R504 000 Cost of sales R415 500 2. Inventories of shirts: NUMBER PRICE PER UNIT TOTAL OF UNITS 1 August 2012 600 R80 R48 000 31 July 2013 970 ? ? 3. Purchases and returns: NUMBER PRICE PER UNIT TOTAL OF UNITS Purchases: 12 October 2012 750 R110 R82 500 18 December 2012 1 900 R130 R247 000 6 March 2013 680 R100 R68 000 24 June 2013 880 R120 R105 600 4 210 R503 100 Returns: 7 March 2013 (60) R100 (R6 000) 24 June 2013 (150) R120 (R18 000) NET TOTAL 4 000 R479 100 6.3 See next page. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 24 DBE/November 2013 NSC 6.3 INTERNAL CONTROL Sizwe Sibiya owns three printing shops, each managed by a different person. Each shop has one high-capacity printer which is designed to print 50 000 copies per month. They charge R1,20 per copy. REQUIRED: Identify ONE problem in relation to each shop, quoting figures in identifying each problem. In EACH case, advise Sizwe on how to solve the problem. INFORMATION FOR OCTOBER 2013: SHOP 1 SHOP 2 SHOP 3 Year printer purchased 2007 2011 2012 Name of manager Thandeka Dludlu Sipho Cost price of printer R30 000 R50 000 R70 000 Accumulated depreciation R29 999 R20 000 R14 000 Number of copies printed and sold 70 000 50 000 20 000 Number of spoilt copies 965 5 870 180 Cash from customers deposited R66 000 R60 000 R24 000 Ink and other consumables used R14 800 R19 500 R4 400 Repairs and maintenance R4 000 R1 400 R200 Other monthly operating expenses R17 000 R17 000 R17 000 (9) 55 TOTAL: 300 Copyright reserved