Accounting Grade 12 IEB Paper 1 2019 Question Paper

Downloaded from hlayiso.com TOTAL MARKS NATIONAL SENIOR CERTIFICATE EXAMINATION NOVEMBER 2019 ACCOUNTING: PAPER I EXAMINATION NUMBER Time: 2 hours 200 marks PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY 1. This question paper consists of 10 pages, an Information Booklet of 8 pages (i–viii) and a Formula Sheet of 1 page (i). Please check that your question paper is complete. 2. Read the questions carefully. 3. Answer the questions in the space provided. 4. It is in your own interest to write legibly and to present your work neatly. 5. You may not use red or green ink. You may use a pencil, but please use a soft, dark pencil. 6. All calculations should be rounded off to two decimal places. 7. The allocation of marks and appropriate time to be taken for each question are as follows: Possible Actual Marker Moderator marks marks signature signature Question 1: Inventory Control 35 (21 minutes) Question 2: Financial Statements 67 (40 minutes) Question 3: Cash Flow Statement 46 (28 minutes) Question 4: Manufacturing and VAT 52 (31 minutes) TOTAL 200 IEB Copyright © 2019 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 2 of 10 QUESTION 1 INVENTORY CONTROL [35 marks; 21 minutes] Refer to the Information Booklet for information relating to ACTV LTD. 1.1 Calculate the rand value of the closing stock of silicone rings for the year ended 28 February 2019. Closing stock of silicone rings (rands) (6) 1.2 Calculate the number of units in closing stock for board games. Closing stock of board games (units) (4) 1.3 Calculate the cost of sales of the board games for the financial year. Opening stock Cost of board games available to sell Less closing stock Cost of sales (12) IEB Copyright © 2019

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 3 of 10 1.4 ACTV LTD aims to achieve a mark-up of 270% but only achieved an actual mark- up of 267%. Give two reasons why their mark-up was not achieved. (2) 1.5 Chris is concerned that stock has been stolen from him and spends the last weekend of the financial year counting his stock. He finds no board games have been stolen, but counts only 6 005 rings. Calculate how many rings have been stolen. (2) 1.6 Both stock items are kept in the same room. Why do you think so many rings were stolen? Give one internal control measure which could be implemented to reduce the theft of rings. This measure should support your reason. (3) 1.7 Due to the theft of stock, Chris is considering changing over to the perpetual inventory system. Would you support his decision? Give one reason to support your answer. (3) 1.8 Chris sells the majority of his rings through a retailer for R49 per ring. He has subsequently seen his rings selling for R147 in the shops. He owns a website and is considering selling older rings which had been returned to him, directly from this website. He plans to sell rings for R100 each. Is this a good idea? Discuss the ethical implications this may have between Chris, the retailer and customers. (3) 35 IEB Copyright © 2019 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 4 of 10 QUESTION 2 FINANCIAL STATEMENTS [67 marks; 40 minutes] Refer to the Information Booklet for information relating to BARR SURF LTD. All workings need to be shown as part marks will be allocated to them. The number of lines does not represent the number of entries required. 2.1 Complete the Statement of Comprehensive Income (Income Statement) for the year ending 28 February 2019. BARR SURF LTD Statement of Comprehensive Income for the year ending 28 February 2019 Net sales Other operating incomes DO NOT CALCULATE Rent Income (2 550 Fee income (108 200 Gross operating income DO NOT CALCULATE Operating expenses (123 262) Salaries (58 000 UIF contributions (580 Audit fees (4 200 Insurance (15 000 Sundry expenses Operating profit before interest DO NOT CALCULATE Interest income 0 Profit before interest expense DO NOT CALCULATE Interest expense (20 000 Profit before taxation DO NOT CALCULATE Net profit after taxation 108 000 (30) IEB Copyright © 2019

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 5 of 10 Calculations must be done in the boxes below. Interest expense Insurance Trading stock deficit/surplus Fee income 2.2 Complete the following notes to the financial statements as it would have appeared on 28 February 2019. All workings must be shown to be awarded part marks. ORDINARY SHARE CAPITAL AMOUNT AUTHORISED: 1 000 000 ordinary shares ISSUED: 625 000 Ordinary shares in issue at the start of year 2 000 000 _________ ordinary shares repurchased at _________ per share _________ ordinary shares at _________ in issue at the end of the year (6) RETAINED INCOME AMOUNT Retained income at the start of the year Net profit/loss after tax for the year Repurchase of _________shares at _______ Retained income at the end of the year (11) IEB Copyright © 2019 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 6 of 10 TRADE AND OTHER PAYABLES AMOUNT Trade creditors (53 000 UIF (1 160 SARS – PAYE (10 600 DO NOT CALCULATE (16) 2.3 What financial indicators do the directors need to consider before buying shares back? (2) 2.4 Inflation in South Africa is targeted between 3 and 6%. Yet insurance premiums for BARR SURF LTD have risen by 170%. Why do you think this is the case? (2) 67 IEB Copyright © 2019

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 7 of 10 QUESTION 3 CASH FLOW STATEMENT [46 marks; 28 minutes] Refer to the Information Booklet for information relating to Bradley Bros Ltd. 3.1 Complete the reconciliation note between profit before taxation and cash generated from operations for the year ended 30 June 2019. 1. Reconciliation between profit before taxation and cash generated from operations  Profit before tax Adjustments in respect of:  Depreciation  Interest expense Operating profit before changes in working capital Changes in working capital:    Cash generated from operations (13) Calculations must be done in the boxes below. Profit before tax Calculate trade and other payables Depreciation Inventory (14) IEB Copyright © 2019 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 8 of 10 3.2 Calculate the following amounts. 3.2.1 Tax paid Workings Amount paid: (4) 3.2.2 Interest paid Workings Amount paid: (4) 3.3 Calculate the cost price of the new vehicle bought on 1 July 2019. Book value at beginning Book value at end 167 500 (7) 3.4 Complete the Cash Flows fom Investing Activities section of the Cash Flow Statement for the year ended 30 June 2019. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of non-current assets Proceeds from disposal of non-current assets (4) 46 IEB Copyright © 2019

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 9 of 10 QUESTION 4 MANUFACTURING AND VAT [52 marks; 31 minutes] PART A 4.1 Complete the raw materials note as it would have appeared on 28 February 2019: Do not calculate (11) 4.2 Complete the direct labour note as it would have appeared on 28 February 2019: Do not calculate (8) 4.3 Calculate the cleaner's weekly wage if she works 48 weeks of the year. (5) 4.4 Complete the selling and distribution note as it would have appeared on 28 February 2019 and then calculate the net profit made by Couch Worx Ltd. Selling and distribution costs Calculation of net profit (16) IEB Copyright © 2019 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I Page 10 of 10 4.5 The directors of Couch Worx Ltd are concerned about their break-even analysis as well as their profitability. Explain using two reasons and supporting figures whether their concerns are valid.   (4) PART B VAT is calculated at 15%. 4.6 Show how the VAT control account will be affected by the transactions relating to Dusi Boets Ltd. You are required to only fill in amounts under either the debit or credit columns. Calculate how much is owed to/owed by SARS and show your selection by circling the correct block. VAT CONTROL Debit Credit Amount Owed to SARS Owed by SARS (8) 52 Total: 200 marks IEB Copyright © 2019