Accounting Grade 12 P2 Eastern Cape June 2023 QP (Eng)

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 JUNE 2023 ACCOUNTING P2 MARKS: 150 TIME: 2 hours This question paper consists of 13 pages including a formula sheet and a 10-page answer book.

Downloaded from hlayiso.com 2 ACCOUNTING P2 (EC/JUNE 2023) 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 ALL workings to earn 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. Where applicable, show all calculations to ONE decimal point. 7. Write neatly and legibly. 8. 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 Reconciliations: Bank and Creditors 35 25 2 Cost Accounting 55 45 3 Inventory valuation 35 30 4 Fixed Assets 25 20 TOTAL 150 120 Copyright reserved Please turn over

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Downloaded from hlayiso.com 4 ACCOUNTING P2 (EC/JUNE 2023) QUESTION 1: RECONCILIATIONS – BANK AND CREDITORS (35 marks; 25 minutes) 1.1 Match the statement in COLUMN A with a term from COLUMN B. Write only your answer (A–E) next to the question numbers (1.1.1 to 1.1.4) in the ANSWER BOOK, for example 1.1.5 F. COLUMN A COLUMN B 1.1.1 Interest debited on the bank statement A Bank charges 1.1.2 The cost of using a current bank account B Debit 1.1.3 A balance on a bank statement that C Stop order represents a favourable balance 1.1.4 Authorises a fixed monthly payment to the D Interest on same beneficiary overdraft E Credit (4 x 1) (4) 1.2 BANK RECONCILIATION The information was extracted from the records of Pheasant Traders. The business uses the official bank statement, available on 26th of each month, to complete the bank reconciliation process. REQUIRED: 1.2.1 Calculate the correct cash journal totals for April 2023. Use the table provided in the ANSWER BOOK. (10) 1.2.2 Calculate the Bank account balance on 30 April 2023. (4) 1.2.3 Prepare the Bank Reconcilation Statement on 30 April 2023. (7) INFORMATION: A. Extract of items that appeared on the Bank reconcilation statement on 31 March 2023: Outstanding deposits: on 26 March 2023 R9 500 on 31 March 2023 R10 500 Outstanding EFT No. 341 R4 650 Favourable balance on bank account in the ledger R18 795 NOTE: • The deposit on 26 March 2023 appeared on the April bank statement as R4 500. The difference must be written off as the cashier no longer works for the business. • All other outstanding amounts were correctly reflected on the April bank statement. B. The cash journals reflected the following provisional totals before the bank statement for April 2023 were received. • Total for Cash Receipts Journal, R91 230 • Total for Cash Payments Journal, R101 050 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 5 C. The following items on the bank statement for April 2023, must still be taken into account: • Service fees, R245; credit card levies, R750; cash handling fees, R430 • Interest credited, R200 • Debit order to Eagle Secure for business insurance, R2 100 • Direct deposit of R7 500 by a debtor D. EFT no. 375 was recorded as R6 000 in the CPJ. This EFT appeared on the April bank statement with the correct amount of R600. E. A stop order for repayment on loan, R10 000, appeared on the April bank statement. The loan however, was settled in March 2023. The loan company was informed of this mistake. This will be rectified on the next statement. F. The following items appeared in the Cash Journals for April 2023, but not on the bank statement for April 2023: • Deposit on 30 April 2023, R21 500 • EFT no. 440, R2 250 G. The balance on the bank statement on 30 April 2023 was R …? 1.3 CREDITORS’ RECONCILIATION You are provided with information from the records of Wakeford Traders for May 2023. The balance of the Creditors’ Control account and the total of the Creditors’ List were not the same. REQUIRED: 1.3.1 Explain why the balance in the Creditors’ Control account in the General ledger should correspond with the total of Creditors’ List extracted from the Creditors Ledger. Provide ONE point. (2) 1.3.2 Complete the table in the ANSWER BOOK to reconcile the balance in the Creditors’ Control account and the total of the Creditors’ List. Show a “+” for increases and a “-” for decreases, next to each amount. (8) INFORMATION: A. Balance of the Creditors’ Control account on 31 May 2023 R111 340 Total of the Creditors’ List R78 480 B. An investigation revealed the following: (i) The creditors’ list was added up incorrectly. It was understated by R960. (ii) The Creditor’s’ Control column in the May 2023 CPJ was R16 400. This amount was credited to the Creditors’ Control account. (iii) A credit purchase invoice for R3 920 on 30 May 2023, was not yet recorded. (iv) Goods returned to a supplier, R1 000, was entered correctly in the CAJ and posted accordingly to the Creditors’ Control account. It was however posted as R100 to the creditor’s account in the Creditors Ledger. 35 Copyright reserved Please turn over

Downloaded from hlayiso.com 6 ACCOUNTING P2 (EC/JUNE 2023) QUESTION 2: COST ACCOUNTING (55 marks; 45 minutes) 2.1 Indicate whether the following statements are TRUE or FALSE. Write only “true” or “false” next to the question numbers (2.1.1–2.1.4) in the ANSWER BOOK. 2.1.1 Carriage paid on raw materials purchased increases the cost of direct material issued for production. (1) 2.1.2 Advertising is part of factory overhead costs. (1) 2.1.3 Commission to sales staff is part of administration costs. (1) 2.1.4 Delivery expenses is part of sales and distribution costs. (1) 2.2 SIVE MANUFACTURERS You are provided with information from the records of Sive Manufacturers for the year ended 28 February 2023. They manufacture one type of school bag. REQUIRED: 2.2.1 Calculate the direct labour cost. (8) 2.2.2 Calculate the factory overhead cost. (15) 2.2.3 Prepare the Production Cost Statement for the year ended 28 February 2023. (8) INFORMATION: A. Stock balances: 28 February 2023 1 March 2022 Raw material stock Work-in-progress stock ? R240 560 Finished goods stock R142 500 R165 000 Indirect factory materials R22 650 R19 800 B. Labour cost for production: Number of employees 14 Basic monthly salary per factory worker R10 500 Total overtime hours for the year (by all workers) 3 100 Overtime rate per hour R80 UIF deductions from basic salary 1% Employer’s contribution to UIF R-for-R C. The factory foreman earns an annual salary of R234 000 (including all benefits). D. Indirect materials for the factory to the value of R57 600 were bought during the financial year. Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 7 E. Expenses extracted from the trial balance on 28 February 2023: Rent expense R172 800 Depreciation on factory equipment R415 830 Water and electricity R156 000 Insurance R107 100 Adjustments to be taken into account: • Rent expense must be allocated according to floor space occupied, as follows: Floor space for factory 900 m2 Floor space for sales department 750 m2 Floor space for administration department 600 m2 Total floor space 2 250 m2 • Water and electricity usage must be shared as follows: Factory 90% Sales department 5% Administration department 5% • A payment of R4 200 for insurance on 2 February 2023 did not go through, due to a system failure. It will be paid on 1 March 2023. Insurance must be divided in a ratio of 3 : 2 : 2 between the factory, sales and administration departments respectively. F. Additional information: • Direct materials issued to the factory, R3 150 000 • Sales of finished goods, R9 300 000 • Cost of sales of finished goods, R6 022 500 Copyright reserved Please turn over

Downloaded from hlayiso.com 8 ACCOUNTING P2 (EC/JUNE 2023) 2.3 RUSKS FOR YOU The business produces healthy rusks. The owner is Linda Williams and the financial year-end is 31 May. REQUIRED: 2.3.1 Calculate the break-even point for the year ended 31 May 2023. (4) 2.3.2 Comment on whether Linda should be satisfied with the number of units produced and sold during the financial year. Quote figures. (6) 2.3.3 Give TWO possible reasons for the increase in direct material cost per unit for the current financial year. (4) 2.3.4 Provide ONE reason why Linda may be concerned about the increase in the total fixed costs during the current financial year. (2) 2.3.5 Linda wants to reduce the content per packet and use the same packaging (which reflects the weight as 500 g) to save on costs. She wants to keep the selling price the same. What advice would you offer? Provide TWO points. (4) INFORMATION: 31 May 2023 31 May 2022 Total Per unit Total Per unit Direct material cost 984 000 R10,25 889 200 R7,60 Total variable cost 1 536 000 R16,00 1 462 500 R12,50 Total fixed costs 1 104 000 R11,50 945 000 R8,08 Total sales 2 688 000 R28,00 2 691 000 R23,00 Number of units 96 000 units 117 000 units produced and sold Break-even point ? 90 000 units 55 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 9 QUESTION 3: INVENTORY VALUATION (35 marks; 30 minutes) 3.1 Choose the correct answer from the given options. Write only the answer next to the question numbers (3.1.1 to 3.1.3) in the ANSWER BOOK. FIFO; Periodic system; Perpetual system; Weighted average method 3.1.1 The stock system where the cost of sales is recorded for every sales transaction. (1) 3.1.2 The stock valuation method that is based on the assumption that the oldest stock is always sold first. (1) 3.1.3 The value of the closing stock is calculated by dividing the total amount spent in purchasing the stock by the number of units available for sale. (1) 3.2 INVENTORY VALUATION You are provided with information relating to Global Jackets Ltd. The business is owned by Neville Ceder. They sell special jackets for matric learners. The business uses the periodic inventory system and the weighted average method to value their stock. REQUIRED: 3.2.1 Calculate the value of the closing stock on 30 June 2023. (9) 3.2.2 Calculate the average stock holding period (in days) for jackets. (5) 3.2.3 Neville is concerned that despite placing a security guard at the door, jackets are still going missing. • Calculate the number of units missing. (4) • Give TWO points of advice on how Neville can address this problem. (4) 3.2.4 Recently Neville has learned that a competitor uses the FIFO method of valuing their stock of jackets. He is curious about this. • Explain the effect of a change to the FIFO method on the gross profit on jackets. (2) • Give ONE reason for changing the stock valuation method. (2) • Give ONE reason against changing the stock valuation method. (2) 3.2.5 A staff member has suggested that the company should sponsor the jackets to a local school whose 30 Grade 12 learners cannot afford to buy these special jackets in their matric year. Explain why you consider this to be a good idea. Provide TWO reasons. (4) Copyright reserved Please turn over

Downloaded from hlayiso.com 10 ACCOUNTING P2 (EC/JUNE 2023) INFORMATION: A. Stock balances Units Unit price Total 1 July 2022 820 R416 290 30 June 2023 1 160 ? B. Purchases during the year: Date Units Unit Carriage on Total amount price purchases R 10 August 2022 2 400 R538 R62 400 1 353 600 20 April 2023 705 R562 R19 740 415 950 28 June 2023 1 815 R600 R54 450 1 143 450 TOTAL 4 920 2 913 000 C. Returns for the month: (cost price plus carriage were refunded) Returns from Unit Carriage on Total amount purchases Units price purchases R 10 August 2022 10 5 640 28 June 2023 5 ? TOTAL 15 ? D. Sales: • 4 350 jackets were sold during the year. 35 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 11 QUESTION 4: FIXED ASSETS (25 marks; 20 minutes) 4.1 FIXED ASSETS The information relates to Maluti Traders Ltd. The financial year ended 28 February 2023. REQUIRED: 4.1.1 Calculate the depreciation on equipment and on vehicles for the year ended 28 February 2023. (14) 4.1.2 Provide ONE reason why a company might decide to dispose of fixed assets. (2) INFORMATION: A. Extract: Fixed Assets balances 28 Feb 1 March 2023 2022 Vehicles ? 444 150 Accumulated depreciation on vehicles ? 162 000 Equipment 600 000 ? Accumulated depreciation on equipment ? 440 000 B. Additional information: (i) New equipment, cost price R120 000 was bought on 1 May 2022. (ii) On 31 July 2022 a vehicle was sold for R81 000, cash. The original cost price was R164 250 and the accumulated depreciation of this vehicle on 1 March 2022 was R56 250. (iii) A new vehicle was bought on 1 September 2022 for R315 000. (iv) Equipment is depreciated by 20% p.a. on cost. Vehicles are depreciated by 20% p.a. on carrying value. Copyright reserved Please turn over

Downloaded from hlayiso.com 12 ACCOUNTING P2 (EC/JUNE 2023) 4.2 MANAGING FIXED ASSETS Hlope Delivery Services owns three delivery vehicles. Phillip, the owner, is concerned about the control of the vehicles. He obtained some information from the supervisor, and requested your assistance. REQUIRED: Identify ONE different problem with regards to each vehicle. Quote figures. Provide ONE point of advice for each problem identified. (9) INFORMATION: A. Goods are delivered to customers free of charge within a 30 km radius. Deliveries are not done over weekends. B. Information supplied by the supervisor. It relates to the 4 weeks (20 days) during May 2023. Vehicle 1 Vehicle 2 Vehicle 3 Date purchased 1 Apr 2021 1 June 2018 1 May 2009 Carrying value R210 000 R113 000 R1 Salary of driver per month R11 000 R13 750 R11 000 Kilometers travelled 360 km 780 km 1 216 km Number of deliveries made 24 40 38 Average kilometers per trip 15 km 19,5 km 32 km Fuel costs (R20,80 per litre) R420 R1 400 R2 150 Maintenance / service costs R70 (monthly average) R115 R285 Service plan 25 ¤ TOTAL: 150 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 13 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 and other receivables + Cash and cash equivalents) : Current liabilities Average trading stock x 365 Cost of sales . Cost of sales 1 Average trading stock Average debtors x 365 Average creditors x 365 Credit sales 1 Credit purchases 1 Net income after tax x 100 Net income after tax x 100 Number of issued shares 1 Average shareholders' equity 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 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: * 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