ACCOUNTING P2 QP GR12 SEPT 2023 English hlayiso.com

NATIONAL SENIOR CERTIFICATE GRADE 12 SEPTEMBER 2023 ACCOUNTING P2 MARKS: 150 TIME: 2 hours This question paper consists of 11 pages including a formula sheet and a 10-page answer book.

2 ACCOUNTING P2 (EC/SEPTEMBER 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. 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 the 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 Reconciliations 35 30 2 Cost Accounting 40 30 3 Inventory valuation and VAT 40 30 4 Budgeting 35 30 TOTAL 150 120 Copyright reserved Please turn over

(EC/SEPTEMBER 2023) ACCOUNTING P2 3 QUESTION 1: RECONCILIATIONS (35 marks; 30 minutes) 1.1 CREDITORS' RECONCILIATION Candy Stores buys goods on credit from Awesome Suppliers. REQUIRED: Use the table provided to indicate the changes that must be made: • In the Creditors’ Ledger Account in the books of Candy Stores. • In the Creditors’ Reconciliation Statement on 28 February 2023. Show a ‘+’ for increases and a ‘–’ for decreases next to each amount. (10) INFORMATION: The balance on the statement of account received from Awesome Suppliers did not correspond to the balance of their account in the Creditors’ Ledger. A. Balance of Awesome Suppliers in the Creditors’ Ledger: R52 900. B. Statement of account received from Awesome Suppliers: AWESOME SUPPLIERS No. 2169 205 Pineridge Crescent Gqeberha 5820 Debtor: Candy Stores 25 February 2023 DATE DETAILS DEBIT CREDIT BALANCE Jan. 26 Balance 45 300 28 Receipt 110 12 000 33 300 Feb. 01 Invoice A12 14 600 47 900 03 Credit Note 34 800 48 700 10 Receipt 0076 12 000 36 700 Discount allowed 600 36 100 18 Invoice 588 16 340 52 440 24 Invoice 1132 54 820 107 260 25 Delivery 1 540 108 800 C. An investigation revealed the following errors and omissions: (i) Invoice A12 was incorrectly recorded as R16 400 in the creditors ledger account. The amount on the statement is correct. (ii) Credit note 34 was for damaged goods returned on 2 February 2023. (iii) Candy Stores recorded the discount as R1 200. Awesome Suppliers indicated that the business was only entitled to R600, as reflected on the statement. (iv) Awesome Suppliers granted a 5% trade discount on Invoice 588. Candy Stores did not take this into account when posting to the Creditors Ledger. (v) Invoice 1132 on the statement was for goods that Awesome Suppliers sold to Sweets Galore. (vi) Awesome Suppliers charges a delivery fee to all its customers. This was not recorded in the creditor’s ledger account. Copyright reserved Please turn over

4 ACCOUNTING P2 (EC/SEPTEMBER 2023) 1.2 BANK RECONCILIATION The information appeared in the books of Donald Traders for May 2023. REQUIRED: 1.2.1 Calculate the correct bank account balance by completing the table provided in the ANSWER BOOK. (12) 1.2.2 Prepare the Bank Reconciliation Statement on 31 May 2023. (7) 1.2.3 Provide ONE suggestion on how the problem of counterfeit (fake) notes can be prevented. (2) 1.2.4 Donald was concerned about the outstanding deposits. Provide TWO internal control measures that he can implement to address this concern. (4) INFORMATION: A. Extract: Bank Reconciliation Statement on 30 April 2023 Deposit not yet recorded: 18 April 2023 R 24 300 27 April 2023 7 100 EFT not on statement: No. 245 11 300 No. 246 6 750 Favourable balance as per bank account 8 800 NOTE: • The deposit on 18 April 2023 and EFT No. 245 appeared on the bank statement for May 2023 with the correct amounts reflected above. • The deposit on 27 April 2023 appeared on the statement as R5 000 due to counterfeit notes being included in the deposit. This amount must be written off as the money will not be recovered. • EFT 246 was on the May 2023 statement with the correct amount of R6 250. B. Provisional totals from the Cash Journals on 31 May 2023: Cash Receipts Journal R76 270 Cash Payments Journal R88 625 C. Information on the bank statement not in the May 2023 Cash Journals: Bank charges R 235 Debit order for the monthly insurance 1 140 Direct deposit by the tenant for rent 4 600 Deposit by debtor in settlement of account of R7 500 7 030 Deposit by Uzu Technical College 15 000 * This is an error on the statement as the business does not deal with this college. This will be rectified on the next statement. D. Information in the May 2023 Cash Journals not on the statement: • Outstanding deposits: 19 May 2023 R11 400 26 May 2023 R10 800 • Outstanding EFT No. 658 R 6 900 E. The balance as per statement was R? 35 Copyright reserved Please turn over

(EC/SEPTEMBER 2023) ACCOUNTING P2 5 QUESTION 2: COST ACCOUNTING (40 marks; 30 minutes) 2.1 JABE TRAVEL-GEAR The information relates to the financial year ended 28 February 2023. The business, owned by John, manufactures kit bags. REQUIRED: 2.1.1 Calculate the total Factory Overhead Cost. Use the table provided in the ANSWER BOOK. Show ALL workings. (12) 2.1.2 Prepare the Production Cost Statement for the year ended 28 February 2023. (8) INFORMATION: A. Stock balances: 28 FEBRUARY 2023 28 FEBRUARY 2022 Work-in-progress R 23 600 R 35 400 Factory indirect material 9 300 12 700 B. Transactions for the year ended 28 February 2023: Material used in factory for production R 374 500 Indirect material purchased for use in the factory 87 600 Factory sundry expenses 65 570 Salaries and wages: Production wages ? Factory cleaning staff 48 510 Administration staff 283 500 Sales staff 217 400 Rent expense 126 000 Water and electricity 82 000 Insurance 33 600 C. Additional information and adjustments: • Wages of the factory cleaning staff was omitted from the February 2023 journal. Details are as follows: Total gross Total Total net Total employer's wages deductions wages contribution R4 200 R504 R3 696 R210 Employer's contributions are added to salaries and wages. • 2/ 3 of the rent expense relates to the factory. • An amount of R7 400 is still outstanding for water and electricity for February 2023. The factory uses 65% of the water and electricity. • Insurance has been paid from 1 March 2022 to 30 June 2023. This expense must be allocated to the factory, administration and sales departments in the ratio 4 : 2 : 1 respectively. D. The business manufactured 10 500 kit bags at a cost of R112,80 per bag. Copyright reserved Please turn over

6 ACCOUNTING P2 (EC/SEPTEMBER 2023) 2.2 FAZEL MANUFACTURERS This business is owned by Fazel Khan. He makes dresses. The financial year ended on 28 February 2023. REQUIRED: 2.2.1 Control over raw material • Fazel is concerned about the wastage of material in production. Calculate the number of metres of fabric that was wasted. (4) • Provide TWO possible reasons for this wastage. (4) 2.2.2 Break-even analysis • Calculate the break-even point for the year ended 28 February 2023. (4) • Explain whether the business should be satisfied with the number of units made during the current financial year. State TWO points. (4) • Fazel is concerned about the increase of R81 900 in total fixed costs. Provide ONE reason why he should not be concerned. Quote figures. (4) INFORMATION: A. Direct material stock: Fabric Opening stock 1 720 metres Purchases 14 230 metres Raw materials issued to the factory 13 050 metres NOTE: 1,8 metres of fabric is used for each dress. B. Production, sales and break-even units: 2023 2022 Number of units produced and sold 7 200 6 750 Break-even number of units ? 7 074 C. Additional information: 28 February 2023 2022 Total Per unit TOTAL R R R Sales 4 176 000 580 3 813 750 Fixed cost 1 850 400 257 1 768 500 Variable cost 2 304 000 320 2 126 250 40 Copyright reserved Please turn over

(EC/SEPTEMBER 2023) ACCOUNTING P2 7 QUESTION 3: INVENTORY VALUATION AND VAT (40 marks; 30 minutes) STOCK VALUATION 3.1 Choose a word/term from the list provided for each of the descriptions below. Write only the word/term next to the question numbers (3.1.1 to 3.1.4) in the ANSWER BOOK. perpetual; specific identification; weighted-average; periodic; first-in-first-out 3.1.1 The method that assumes that stock is sold in the order purchased 3.1.2 This system ensures that cost of sales is calculated at the point of sale 3.1.3 Stock items are assigned a unique or individual value 3.1.4 This method is suited for low-value goods that are purchased in bulk (4) 3.2 LYON STORES The business, owned by Lyon, sells one type of leather purse. The business uses the weighted-average method and the periodic stock system to value stock. REQUIRED: Refer to Information A: 3.2.1 Calculate the following for the financial year ended 28 February 2023: • Value of the closing stock (7) • Number of units missing (4) 3.2.2 Explain TWO strategies that Lyon could use to address the problem of customers stealing items. (2) 3.2.3 The average stockholding period is 73,7 days. Explain whether Lyon should be concerned about this. Provide ONE point. (2) Refer to Information B: During October Lyon introduced two brands of laptop (computer) bags. 3.2.4 Calculate the cost of sales of laptop bags. (5) 3.2.5 Lyon was confused as to why the Coma bag sales are better than Komfi. Provide TWO possible reasons. (4) INFORMATION: A. Leather purses: Number of Cost price Date Total value purses per purse Stock 1 March 2022 480 R71 040 balances 28 Feb 2023 360 ? Purchases May 2022 450 R155 R 69 750 August 2022 800 R180 144 000 October 2022 500 R195 97 500 January 2023 250 R205 51 250 TOTAL 2 000 362 500 Returns January 2023 30 R205 6 150 Carriage on Total carriage of R20 960 was paid for purchases during purchases the year. Lyon Stores were not reimbursed for carriage on returns. Sales 2 050 units were sold at R295 each. Copyright reserved Please turn over

8 ACCOUNTING P2 (EC/SEPTEMBER 2023) B. Laptop (computer) bags: Brand (model) name KOMFI COMA Units purchased 200 300 Cost price per unit R680 R920 Total purchases amount R136 000 R276 000 Units sold 112 220 Selling price per unit R1 190 R1 380 Total sales amount R133 280 R303 600 VALUE ADDED TAX (VAT) 3.3 The information relates to Big Stores for the 2-month VAT period ended 30 April 2023. The standard VAT rate is 15%. REQUIRED: 3.3.1 Calculate the VAT amount payable to SARS on 30 April 2023. NOTE: The given errors and omissions must be taken into account. (10) 3.3.2 The internal auditor discovered that the owner, Benjamin, used the VAT collected from customers to pay salaries and bonuses and was not paying the full amount due to SARS on the deadline dates. Offer ONE point of advice to Benjamin and an explanation or reason to support the advice. (2) INFORMATION: A. Amount due to SARS on 1 April 2023 was R12 750. B. Amounts from the journals on 30 April 2023: INCLUDING VAT VAT Total Sales R 486 450 R 63 450 Credit purchases of stock 167 900 21 900 C. Errors and omissions noted: • Stock taken by the owner, cost price R4 300 (excluding VAT), was not yet recorded. • Zero-rated goods with a selling price of R25 000 (excluding VAT) were included in Sales amount. • VAT on discounts granted to debtors was not recorded. The total discounts allowed amounted to R14 720. 40 Copyright reserved Please turn over

(EC/SEPTEMBER 2023) ACCOUNTING P2 9 QUESTION 4: BUDGETING (35 marks; 30 minutes) The partially completed Projected Statement of Comprehensive Income was prepared by the bookkeeper of Grandma Traders for the period 1 August 2023 to 30 September 2023. The business is owned by Prudence John. REQUIRED: 4.1 List TWO items that would not appear on a Cash Budget. (2) 4.2 Calculate the missing amounts denoted by (i) to (iv) on the Projected Statement of Comprehensive Income. (13) 4.3 Calculate the following: • The cost price of the new vehicle purchased on 1 August 2023 (5) • The savings on interest on loan after the loan repayment (3) 4.4 Refer to the actual and budgeted figures for August 2023: Comment on the control of the following items: Quote figures. • Telephone, water and electricity (3) • Advertising (4) 4.5 A new competitor started operating from nearby premises in August 2023. Prudence decided to decrease the mark-up % and offer more goods on credit. • Explain the effect of the decrease in mark-up % on gross profit. Quote figures. (3) • Provide ONE disadvantage of selling more goods on credit. (2) INFORMATION: A. The business uses a mark-up percentage of 60% on cost. Stock sold is replaced in the month of sale. B. Sales are expected to increase by 10% per month. C. Managers salaries: The business employs a sales manager and an office manager. The office manager earns R300 more than the sales manager (per month). The sales manager will receive a 5% increase effective from 1 September 2023. D. A delivery vehicle was purchased on 1 August 2023. Vehicles are depreciated at 15% p.a. on cost. E. Rent income will increase by 7,5% p.a. commencing on 1 September 2023. F. Interest on loan is charged at 14% p.a. on the outstanding balance. Interest is paid on the last day of each month, and is not capitalised. The business intends paying R90 000 of the loan on 1 September 2023. Copyright reserved Please turn over

10 ACCOUNTING P2 (EC/SEPTEMBER 2023) G. Information extracted from the Projected Statement of Comprehensive Income for August and September 2023: AUGUST AUGUST SEPTEMBER BUDGETED ACTUAL BUDGETED Sales 224 000 252 000 246 400 Cost of sales (140 000) (168 000) (i) Gross profit 84 000 Other income Rent income (ii) 16 340 Commission income 13 440 15 450 14 784 Discount received 2 320 Gross operating income Operating expenses (48 700) Salaries (two managers) 18 700 18 700 (iii) Wages (cleaner) 2 180 2 180 2 289 Maintenance 7 000 2 000 7 000 Motor vehicle expenses 0 3 600 0 Administration expenses Telephone, water and electricity 2 800 4 480 2 800 Insurance 2 200 2 200 2 200 Advertising 6 800 7 375 7 390 Depreciation 12 000 14 875 14 875 Trading stock deficit 0 3 200 Operating profit (iv) Interest income (at 8% p.a.) 640 640 640 Profit before interest expense 59 940 Interest on loan (6 300) (6 300) (5 250) Net profit 53 640 35 TOTAL: 150 Copyright reserved Please turn over

(EC/SEPTEMBER 2023) ACCOUNTING P2 11 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 Non-current liabilities : Shareholders’ equity liabilities (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 Cost of sales 1 Net profit 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