Accounting Grade 10 P2 2020 QP (Eng)

NATIONAL SENIOR CERTIFICATE GRADE 10 NOVEMBER 2020 ACCOUNTING P2 (EXEMPLAR) MARKS: 150 TIME: 2 hours This question paper consists of 8 pages and a 7-page answer book.

2 ACCOUNTING P2 (EC/NOVEMBER 2020) INSTRUCTIONS AND INFORMATION Read the following instructions and follow them precisely. 1. A special ANSWER BOOK is provided in which you must answer ALL the questions. 2. Show ALL workings to earn part-marks. 3. You may use a non-programmable calculator. 4. You may use a dark pencil or black/blue ink to answer the questions. 5. Where applicable, show all calculations to ONE decimal point. 6. A breakdown of the questions is provided. You must attempt to comply with the suggested time allocation for each question. QUESTION 1: 45 marks; 36 minutes Topic of the question: This question integrates: Managerial Accounting • Manufacturing concepts and Cost Accounting and Ethics basic cost calculations Managing Resources • Ethics QUESTION 2: 45 marks; 36 minutes Topic of the question: This question integrates: Managing Resources VAT and Creditors Reconciliation • VAT concepts and calculations • Creditors Control and Creditors List QUESTION 3: 30 marks; 24 minutes Topic of the question: This question integrates: Budgets Managerial Accounting • Calculations Managing Resources • Internal Control QUESTION 4: 30 marks; 24 minutes Topic of the question: This question integrates: Managing Resources Tangible Assets and Ratio • Tangible Assets Analysis • Analysis and Interpretation of Financial Statements Copyright reserved Please turn over Please turn over

(EC/NOVEMBER 2020) ACCOUNTING P2 3 QUESTION 1: COST ACCOUNTING AND ETHICS (45 marks; 36 minutes) UTH sportswear is a small business that manufactures rugby jerseys which are supplied to the local schools. During March 2020 the business manufactured 10 460 jerseys. 1.1 MANUFACTURING CONCEPTS 1.1.1 … remains the same no matter how many units are produced. (1) 1.1.2 Define the following and give examples: • Direct Labour • Indirect Labour (4) 1.1.3 Prime costs consist of … and … (2) 1.2 COST CALCULATIONS Calculate the following: • Direct material cost (3) • Direct labour cost (2) • Factory / Manufacturing overhead cost (8) • Total Cost of Production (5) • Unit cost per jersey (4) 1.3 UHT gets his material from China. Due to high transport and import duties, he is planning to use a locally produced cheaper material. He feels that customers will not notice and he would not need to reduce the selling price. What advice would you offer UHT? Give THREE points. (6) 1.4 The accountant is concerned that the sales for the year dropped by 25% and the cost of sales was higher than the previous year. This was due to an increase in the wool price and also transport cost. If the sales for last year was R400 000, and the profit mark-up is 50%, calculate: • The sales for the current year (5) • The cost of sales for the current year (5) INFORMATION: Costs for June 2020 Fabric (material) used in production of jerseys R280 000 Badges, numbers and logos 42 500 Salaries and wages: Factory foreman 28 700 Bookkeeper 25 600 Machine operators 215 500 Rent Expense Total (40% allocated to factory) 28 200 Water and Electricity (3/5 allocated to factory) 12 600 Factory expenses 8 200 45 Copyright reserved Please turn over

4 ACCOUNTING P2 (EC/NOVEMBER 2020) QUESTION 2: VAT AND CREDITORS RECONCILIATION (45 marks; 36 minutes) 2.1 Indicate whether the following statements are TRUE or FALSE. Write only ‘True’ or ‘False’ next to the question numbers (2.1.1–2.1.5) in the ANSWER BOOK. 2.1.1 The two categories of registration by businesses for VAT purposes are known as Output VAT and Input VAT. 2.1.2 Tax avoidance is illegal and punishable by law. 2.1.3 Output VAT is VAT collected from customers. 2.1.4 Input VAT is VAT paid when goods and services are purchased by the business. 2.1.5 Fees payable for education is an example of VAT exempted goods or services. (5) 2.2 Complete the following table: No. Total Input Retailer’s % Retailer Output Retailer Retailer VAT actual Mark- Selling VAT receives paid to cost price up price from supplier Customer 1. 1 375,40 1 196 50% 1 794 2 063,10 2. 3 648 25% 3. 20% 3 600 4. 10% 440,00 (17) 2.3 You are provided with information relating to AB Traders: REQUIRED: 2.3.1 Prepare the corrected CREDITORS CONTROL account on 31 October 2020. Assume that all the Journals have been properly closed off hence all errors and omissions must be made through the General Journal. Balance this account. (12) 2.3.2 Prepare an updated CREDITORS LIST on 31 October 2020. (11) Copyright reserved Please turn over Please turn over

(EC/NOVEMBER 2020) ACCOUNTING P2 5 Information: The following Creditors Control Account and Creditors List was prepared by an inexperienced bookkeeper in the books of AB Traders. Creditors Control 2020 2020 Oct 1 Balance b/d 54 750 Oct 31 Bank CPJ 40 000 31 Sundry Discount accounts CJ 49 800 received CPJ 750 Bank CRJ 1 100 Sundry accounts CAJ 1 200 Journal Journal debits GJ 290 Credits GJ 670 Balance c/d 63 320 105 940 105 940 Nov 1 Balance b/d 63 320 The Creditors List reflects the following balances before corrections: Debits Credits Teejay Limited 31 700 Mahogany Traders 13 550 Priti Distributors 7 800 Riso Dealers 11 500 64 550 Additional Information: The following information was not taken into account when Journals were prepared: (a) An invoice for stock purchased on credit on 26 October 2020 from Teejay Limited was not recorded. The invoice reflected the cost price of R3 400. (b) There is an addition error in the subsidiary ledger account of Mahogany Traders. Their balance was under calculated by R750. (c) Riso Dealers granted cash discount of R450. This was incorrectly recorded in the CPJ as R250. (d) An amount of R210 in the Creditors Allowances Journal for October 2020 was inadvertently posted to the wrong side of the creditor Priti Distributors’ account. (e) Goods to the value of R800 were returned to Teejay Limited. The entry was correctly recorded in the Creditors Allowances Journal. It was not posted to the creditor’s account. 45 Copyright reserved Please turn over

6 ACCOUNTING P2 (EC/NOVEMBER 2020) QUESTION 3: BUDGETS (30 marks; 24 minutes) You are the treasurer of the school Enviro-club which is located in Nelson Mandela Bay. The club wants to visit the Upington Science Centre during the June vacation. REQUIRED: 3.1 Explain why it is important to prepare a budget. Provide TWO points. (4) 3.2 Calculate the total cost for members for the transport. (5) 3.3 Calculate the following: 3.3.1 Total subsidy for accommodation and total subsidy for meals (4) 3.3.2 The cost of the accommodation for the three days (4) 3.4 Calculate the cost for members for the meals and refreshments. (4) 3.5 Calculate the total cost for members for the trip. (4) 3.6 Calculate the contribution needed per member. (3) 3.7 What can the club do to try and reduce the amount that each member must contribute? Give ONE point. (2) INFORMATION: (a) The club has 20 members. (b) The cost of the trip will include the following: • Transport to hire two minibuses. Each bus charges R8,50 per kilometre. Upington is 725 kilometres from Nelson Mandela Bay. • Four cottages will be needed to accommodate the members for three nights. The total cost will be R2 350 per cottage per night. • Meals and refreshments will be R450 per member for the duration of the tour. • Entry tickets to the Science Centre cost R80 per person. (EC Science Expo will sponsor the club). (c) The school is prepared to subsidise each member with R300 for accommodation and meals. NOTE: R180 will be for meals and R120 will be for accommodation. The SGB will contribute R3 150 towards the transport cost. 30 Copyright reserved Please turn over Please turn over

(EC/NOVEMBER 2020) ACCOUNTING P2 7 QUESTION 4: TANGIBLE ASSETS AND RATIO ANALYSIS (30 marks; 24 minutes) 4.1 Tangible Assets Use the information provided to complete the Fixed Asset Register of Twinkle Traders. The financial year ends on 28 February each year: (16) • A vehicle was purchased on 1 September 2017 for R550 000 from Teddy Motors. Depreciation is calculated at 15% p.a. on cost. • Equipment was purchased on 1 March 2018 for R600 000 from Ludz Traders. Depreciation is calculated at 20% p.a. on the diminishing balance method. 4.2 The Asset Register is a valuable tool in asset management. Why? Give ONE reason. (2) 4.3 Ratio Analysis The following information was extracted from the books of TK Traders for the financial year ended 28 February 2020: Sales R450 500 Cost of Sales R ? Gross Profit 25 % of Sales Operating Expenses R67 500 Net Profit R67 575 Required: Calculate the following: (a) Gross Profit (3) (b) Cost of Sales (3) (c) Percentage Gross Profit on Cost of Sales (2) (d) Percentage net profit on Sales (2) (e) The owner requested that you give one point of advice on how the percentage Net profit on sales can be increased to at least 20% (2) 30 TOTAL: 150 Copyright reserved Please turn over

8 ACCOUNTING P2 (EC/NOVEMBER 2020) ANNEXURE A FORMULA SHEET GRADE 10 Gross Profit x 100 Gross Profit x 100 Net Profit x 100 Sales 1 Cost of Sales 1 Owners’ Equity 1 Net Profit x 100 Current Assets: Current Liabilities Sales 1 Operating Expenses x 100 (Current Assets – Inventories): Current Liabilities Sales 1 Operating Profit x 100 Total Assets: Total Liabilities Sales 1 Copyright reserved Please turn over Please turn over