Accounting Grade 12 P2 NSC June 2023 Question Paper (Eng)

Downloaded from hlayiso.com SENIOR CERTIFICATE EXAMINATIONS/ NATIONAL SENIOR CERTIFICATE EXAMINATIONS ACCOUNTING P2 2023 MARKS: 150 TIME: 2 hours This question paper consists of 13 pages, a formula sheet and a 10-page answer book. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 2 DBE/2023 SC/NSC 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. A Financial Indicator Formula Sheet is attached at the end of this question paper. 4. Show ALL workings to earn part-marks. 5. You may use a non-programmable calculator. 6. You may use a dark pencil or blue/black ink to answer questions. 7. Where applicable, show ALL calculations to ONE decimal point. 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 Bank Reconciliation 30 25 2 Inventory Valuation 35 30 3 Cost Accounting 45 35 4 Budgeting 40 30 TOTAL 150 120 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 3 DBE/2023 SC/NSC KEEP THIS PAGE BLANK. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 4 DBE/2023 SC/NSC QUESTION 1: BANK RECONCILIATION (30 marks; 25 minutes) 1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK. 1.1.1 A credit balance on the Bank Statement means that the business has a positive balance in the bank. 1.1.2 A debit card may be used to withdraw cash from an ATM. 1.1.3 A bank overdraft is a short-term loan that is transferred into the business current bank account. (3) 1.2 VIOLET STORES The information was extracted from the records of the business for April 2023.  Violet uses the official Bank Statement which is available on the 25th of each month to complete the monthly reconciliation process.  She also uses her EFT transaction records (renumbered) to complete the Cash Payments Journal. REQUIRED: 1.2.1 Update the totals for the Cash Receipts Journal and Cash Payments Journal for April 2023. Use the table provided in the ANSWER BOOK. (10) 1.2.2 Calculate the correct Bank Account balance on 30 April 2023. (4) 1.2.3 Prepare the Bank Reconciliation Statement on 30 April 2023. (9) 1.2.4 Violet noticed problems with the depositing of cash. Explain TWO measures that she can use to address these problems. (4) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 5 DBE/2023 SC/NSC INFORMATION: A. Extract from the Bank Reconciliation Statement on 31 March 2023: Favourable balance as per Bank Statement R12 200 Deposits not on Statement: 18 March 2023 23 600 28 March 2023 37 200 Outstanding EFTs: EFT 768 5 480 EFT 769 17 800 Favourable balance as per bank account 49 720  The outstanding deposit on 18 March 2023 appeared on the April 2023 Bank Statement.  The deposit on 28 March 2023 appeared as R22 200. An investigation revealed that the cashier has disappeared with the outstanding amount. It was decided to write off the outstanding amount.  Both the EFTs were on the April Statement, but EFT 768 appeared with the correct amount of R4 580. B. The provisional totals in the Cash Journals before receiving the Bank Statement: Cash Receipts Journal: R115 600 Cash Payments Journal: R217 800 C. Information on the April 2023 Bank Statement None of these items appeared in the April Cash Journals: Debit order: Brylet Municipality R2 880 Cash handling fees R220 Deposit: Y Marigold R8 400 Deposit: Bentley Microloans R65 000 Cash withdrawal R740 Investment matured R18 300 EFT transaction fees R360 EFT transaction fees R360 D. Additional Information:  The debit order to Brylet Municipality was for water and electricity.  Y Marigold, the tenant, deposited the monthly rent.  The deposit from Bentley Microloans did not relate to the business. The bank was informed of this error.  The cash withdrawal of R740 was for fuel for the owner's vehicle.  The EFT transaction fees were duplicated on the Bank Statement in error. E. The Cash Journals reflected the following entries that did not appear on the April 2023 Bank Statement:  Deposit of R22 500 on 30 April 2023  EFT 883 for R9 520 for stationery purchased  EFT 884 for R12 530 for repairs to the buildings F. Bank Statement balance on 30 April 2023: R? 30 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 6 DBE/2023 SC/NSC QUESTION 2: INVENTORY VALUATION (35 marks; 30 minutes) Mandie Jones is the owner of TV City that sells TV sets and has two branches (shops) in KZN. The periodic stock system is used. No missing items were recorded for the financial year ended 28 February 2023. 2.1 Howick branch This branch sells Arctic TV sets. 2.1.1 Calculate the value of the closing stock of the Arctic TV sets on 28 February 2023 using the first-in-first-out (FIFO) method. (5) 2.1.2 Calculate the stockholding period (in days) using the closing stock figure (3) COST PRICE TOTAL ARCTIC TV SETS UNITS PER UNIT AMOUNT Opening stock: 1 March 2022 280 Purchases 1 600 6 310 000 May 2022 500 R3 800 R1 900 000 August 2022 400 3 950 1 580 000 September 2022 400 4 000 1 600 000 January 2023 300 4 100 1 230 000 Returns 60 4 100 (246 000) Closing stock: 28 February 2023 270 ? Cost of sales R6 010 000 Sales 1 550 R5 000 R7 750 000 2.2 Durban Branch This branch sells Pacific and Caspian Smart TV sets. Mandie was concerned about the following issues:  The Caspian Smart TV sets would be too expensive for her customers.  High stock levels in all her products might negatively affect the business. Mandie expected to sell 1 000 Pacific TV sets in the 2023 financial year. She therefore adjusted the selling price of the Pacific TV sets in September and asked the bookkeeper to provide an analysis of the quarterly sales. Refer to Information A and B. 2.2.1 Calculate the value of the closing stock of the Pacific TV sets on 28 February 2023 using the specific identification method. (4) 2.2.2 Calculate the gross profit earned on sale of the new Caspian Smart TV sets. (3) Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 7 DBE/2023 SC/NSC 2.2.3 Comment on the quarterly sales of the Pacific TV sets and explain whether or not Mandie's adjustment of the selling price was a wise decision. Quote figures or calculations. (4) 2.2.4  Comment on the stockholding periods of the Pacific and Caspian TV sets. (4)  Explain how the different holding periods affect the business financially. (4)  Explain what these periods indicate about the preferences of the customers. Quote figures or calculations. (4) 2.2.5 Provide TWO points of advice to Mandie on how she can rectify the high stock levels of some of her products without reducing prices offered to customers any further. (4) INFORMATION: A. Durban branch stock records TV SETS PACIFIC CASPIAN SMART Cost price R9 300 R10 200 Mark-up % on cost Fluctuating 60% TOTAL TOTAL Stock records UNITS UNITS (R) (R) Stock on 1 March 2022 350 3 255 000 Purchases 800 7 440 000 800 8 160 000 May 2022 400 3 720 000 August 2022 400 3 720 000 September 2022* 800 8 160 000 Sales 765 9 408 500 670 10 934 400 *The branch started selling the new Caspian Smart TV sets on 1 September 2022. B. Quarterly sales The bookkeeper provided Mandie with the following analysis of quarterly sales and stockholding periods: PACIFIC CASPIAN SMART SALES PER SELLING TOTAL TOTAL QUARTER UNITS PRICE UNITS SALES SALES PER TV Mar.–May 250 R13 500 R3 375 000 - June–Aug. 245 13 500 3 307 500 - Sep.–Nov. 160 10 300 1 648 000 340 R5 548 800 Dec.–Feb. 110 9 800 1 078 000 330 5 385 600 Stockholding 184 days 71 days period 35 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 8 DBE/2023 SC/NSC KEEP THIS PAGE BLANK. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 9 DBE/2023 SC/NSC QUESTION 3: COST ACCOUNTING (45 marks; 35 minutes) 3.1 LADOO MANUFACTURERS The business manufacturers leather purses. The financial year ended on 28 February 2023. REQUIRED: 3.1.1 Refer to Information C. Calculate the factory overhead cost. (8) 3.1.2 Prepare the Production Cost Statement on 28 February 2023. (10) INFORMATION: A. Work-in-progress stock balance on 1 March 2022 was R542 000. B. Details of the workers in production: Number of workers 40 Basic (normal) wage rate R60 per hour Normal time hours worked by each worker 1 920 hours Overtime (in total) R1 142 000 C. The bookkeeper calculated the factory overhead cost at R2 638 600. The following costs were omitted and must be taken into account:  Insurance is a fixed monthly premium for the entire financial year. The amount paid, R235 950, includes the premium for March 2023. 2 /3 of this expense relates to the factory.  Water and electricity allocated to the office was R69 200. Note that water and electricity is shared according to floor space, as follows: Factory Sales Office 560 m2 240 m2 160 m2 The following entry must be corrected: Rent of R316 000 was recorded in the factory overhead cost. However, the bookkeeper used the incorrect ratio of 2 : 5 : 1 for Factory, Sales and Office. The correct ratio is 5 : 2 : 1 respectively. D. Total prime cost for the year amounted to R12 500 000. E. Total production for the year, 33 500 units, were produced at a cost of R475 per unit. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 10 DBE/2023 SC/NSC 3.2 STYLZ MAKER The business manufactures designer shirts. The financial year ends on 30 April each year. The business is owned by Lez Styles. REQUIRED: NOTE: Provide evidence in the form of figures or calculations to support the comments and explanations required below. 3.2.1 Break-even point, production and profit:  Do a calculation to confirm that the break-even point for 2023 is correct. (3)  Comment on the level of production and the break-even point for the past two years. Explain whether Lez Styles would be happy about the trends in these results and the profit he is earning. Provide figures or calculations. (4) 3.2.2 Fixed costs: Explain why Lez is not concerned about the fixed costs increasing to R6,1 m in 2023. Quote figures. (4) 3.2.3 Selling and distribution cost:  Identify how the selling and distribution costs in total and per unit changed over the two years. (2)  Explain TWO reasons why Lez deliberately wanted to adjust this cost. (2) 3.2.4 Direct material and direct labour: Refer to Information A and C. Lez made specific decisions to improve the business and its product. Explain how the decisions he took have benefited the business by providing:  TWO separate points relating to the raw material (6)  TWO separate points relating to the direct labour (6) INFORMATION: A. Lez's general strategic decisions with effect from 1 May 2023:  Lez decided to improve the quality of the shirts to be more competitive and to export to retailers in other countries.  He changed to a new supplier of the fabric (raw materials) and employed some highly skilled and creative workers to replace workers who resigned or retired.  Factory overheads for 2023 included a training programme for factory workers (R600 000) and the hiring of equipment with the latest technology for R1,4 m per year. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 11 DBE/2023 SC/NSC B. Production and cost 2023 2022 Number of units produced and 10 500 shirts 6 500 shirts sold Selling price R1 830 R1 430 Break-even point 4 815 shirts 4 267 shirts 2023 2022 TOTAL PER UNIT TOTAL PER UNIT R R R R VARIABLE COSTS 5 916 000 563 3 047 500 469 Direct materials cost 3 780 000 360 1 787 500 275 Direct labour cost 936 000 89 960 000 148 Selling and distribution cost 1 200 000 114 300 000 46 FIXED COSTS 6 100 000 581 4 100 000 631 Factory overhead cost 5 600 000 533 3 600 000 554 Administration cost 500 000 48 500 000 77 TOTAL COST OF PRODUCTION 12 016 000 1 144 7 147 500 1 100 C. Lez undertook a short course on managerial accounting to enable him to analyse the production costs more effectively every month. He has analysed the following production costs: Raw materials: 2023 2022 Cost of fabric per metre R200 R110 Metres of fabric per shirt (including wastage) 1,8 metres 2,5 metres Fabric used in metres 43 200 metres 44 000 metres Direct workers: Number of direct workers 12 workers 15 workers Average wages per worker p.a. R78 000 R64 000 Hours per worker per year 1 920 hours 1 920 hours Hours worked by all workers 23 040 hours 28 800 hours Average number of shirts produced per worker 875 shirts 433 shirts 45 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 12 DBE/2023 SC/NSC QUESTION 4: BUDGETING (40 marks; 30 minutes) 4.1 Show the amounts for the following transactions in the appropriate columns for the Cash Budget and the Projected Statement of Comprehensive Income in the ANSWER BOOK: 4.1.1 A computer costing R26 400 will be purchased for cash on 1 July 2023. Depreciation will amount to R550 per month. 4.1.2 A fixed deposit of R90 000 will be invested on 1 July 2023. Interest at 9% p.a. will be deposited into the business bank account at the end of each month. (6) 4.2 ALICE FURNISHERS (PTY) LTD The information relates to the budget period ending July 2023. REQUIRED: 4.2.1 Complete the Debtors' Collection Schedule for July 2023. (7) 4.2.2 Calculate missing figures (i) to (iii) on the Cash Budget provided. (8) 4.2.3 Salaries of workers:  Calculate the % increase that workers will receive in July 2023. (3)  Give TWO reasons why you think that workers would be satisfied with this increase. (2) 4.2.4 Advertising and delivery expenses: Refer to Information F.  Comment on the effectiveness of the advertising. Provide figures or calculations. (4)  Alice is satisfied with the control over delivery expenses. Provide figures or calculations to justify her feelings. (2)  Alice is, however, concerned about the control over each vehicle. Identify a different issue (problem) for EACH vehicle that confirms her concern. Provide figures or calculations to justify her feelings. (4)  Provide TWO suggestions on how Alice can improve the use or efficiency of the vehicles. (4) INFORMATION: A. Sales and cost of sales: APRIL MAY JUNE JULY Sales 1 260 000 1 274 000 1 316 000 1 330 000 Cost of sales 900 000 910 000 940 000 950 000 B. Credit sales comprise 70% of total sales. Debtors pay according to the following trend:  20% pay in the month of sales and receive 7,5% discount.  55% pay in the month following the month of sale.  22% pay two months after the sales month.  The balance is written off thereafter. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P2 13 DBE/2023 SC/NSC C. Stock sold is replaced in the month of sales. A base stock is maintained. 80% of stock is purchased on credit and creditors are paid two months (60 days) after the month of purchase. D. Additional information: The business plans to take a loan on 30 June 2023. This has been negotiated with the bank at 11% p.a. interest, payable at the end of each month and commencing on 31 July 2023. E. Extract from the Cash Budget: JUNE 2023 JULY 2023 RECEIPTS (R) (R) Cash sales 394 800 (i) Collections from debtors 854 952 ? Commission income 131 600 133 000 Loan: Cheetah Bank (ii) PAYMENTS Cash purchase of stock 188 000 190 000 Payments to creditors 720 000 (iii) Directors' fees (two directors) 52 000 49 600 Salaries of workers (including drivers) 172 000 182 320 Advertising 39 480 39 900 Delivery expenses 65 800 66 500 Packing material 78 960 79 800 Interest on loan - 5 500 Municipal services Sundry expenses F. Advertising and delivery expenses:  The business has two delivery vehicles and offer a free delivery service to customers.  The budget for delivery expenses is fixed at 5% of the budgeted sales, on an average distance of 2 000 km to be covered. Actual and budgeted figures for May 2023: BUDGETED/ ACTUAL VEHICLE 1 VEHICLE 2 EXPECTED Sales 1 274 000 1 082 900 Advertising 38 220 36 820 Salaries of drivers 30 000 30 000 15 000 15 000 Delivery expenses 63 700 54 100 35 500 18 600 Petrol/Fuel 47 700 40 000 26 000 14 000 Maintenance 16 000 14 100 9 500 4 600 Kilometres covered 2 000 km 1 800 km 1 260 km 540 km Date purchased 1 Mar. 2018 1 Mar. 2022 40 TOTAL: 150 Copyright reserved

Downloaded from hlayiso.com Accounting/P2 DBE/2023 SC/NSC 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 Operating profit x 100 Sales 1 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 . Cost of sales 1 Average trading stock (See Note 1 below) Average debtors x 365 Average creditors x 365 Credit sales 1 Cost of sales 1 (See Note 2 below) Net income after tax x 100 Net income after tax x 100 Number of issued shares 1 Average shareholders' equity 1 (See Note 3 below) Net income before tax + Interest on loans x 100 Average shareholders' equity + Average non-current liabilities 1 Shareholders' equity x 100 Dividends for the 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 per share x 100 Dividends for the year x 100 Earnings per share 1 Net income after tax 1 Total fixed costs . Selling price per unit – Variable costs per unit NOTE: 1. Trading stock at the end of a financial year may be used if required in a question. 2. Credit purchases may be used instead of cost of sales (figures will be the same if stock is constant). 3. 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