# Accounting Grade 12 NW Prelim 2019 Question Paper > Grade 12 Accounting question paper from the NW Prelim 2019, 23 pages. Read online or get the free PDF download, memo linked when available. - Page: https://www.hlayiso.com/library/accounting-sept-2019/26b73a6e-772a-4277-b848-98016ae810eb - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Document type: Question paper - Year: 2019 - Exam period: NW Prelim - Curriculum: CAPS - Pages: 23 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 12](https://www.hlayiso.com/library/grade-12) › [Accounting](https://www.hlayiso.com/library/grade-12/accounting) › [Accounting Grade 12 NW Prelim 2019 Question Paper](https://www.hlayiso.com/library/accounting-sept-2019/26b73a6e-772a-4277-b848-98016ae810eb) ## About this document Accounting · Grade 12 · NW Prelim · 2019. Question paper, 23 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING SEPTEMBER 2019 MARKS: 300 TIME: 3 hours This question paper consists of 23 pages and a 19-page answer book. Copyright reserved Please turn over ### Page 2 Downloaded from hlayiso.com Accounting 2 NW/September 2019 NSC 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 achieve part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or black/blue ink to answer the questions. 6. Where applicable, show ALL calculations to ONE decimal point. 7. Write neatly and legibly. Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com Accounting 3 NW/September 2019 NSC 8. Use the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION 1: 20 marks; 10 minutes Topic: This integrates: Financial accounting VAT VAT and Ethics Managing resources Ethics QUESTION 2: 40 marks; 20 minutes Topic: This integrates: Financial accounting Bank reconciliation Reconciliation and Internal Creditors’ Reconciliation Control Managing resources: Internal control QUESTION 3: 50 marks; 30 minutes Topic: This integrates: Managerial accounting Production Cost Statement Inventory Manufacturing and Inventory Break-even analysis and interpretation Managing resources Internal control QUESTION 4: 85 marks; 55 minutes Topic: This integrates: Financial accounting Balance Sheet, GAAP and GAAP principles Audit Report Balance Sheet Audit Report and King Code QUESTION 5: 75 marks; 45 minutes Topic: This integrates: Financial accounting Fixed Assets, Cash Flow Cash Flow Statement and notes Statement, Interpretation and Ratio analysis and interpretation Analysis Managing resources Ethics QUESTION 6: 30 marks; 20 minutes Topic: This integrates: Managerial accounting Cash Budget Cash Budgets Interpretation of projections Calculations and problem solving Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com Accounting 4 NW/September 2019 NSC QUESTION 1: VAT AND ETHICS (20 marks; 10 minutes) 1.1 CONCEPTS Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question numbers (1.1.1 to 1.1.5) in the ANSWER BOOK. 1.1.1 (Exempted items/Zero-rated items) are items the law says must not be taxed. (1) 1.1.2 VAT is (an indirect/a direct) tax. (1) 5.1. 4 1.1.3 When a business buy goods it has to pay (output/input) VAT on these items. (1) 1.1.4 The VAT rate can be changed by (SARS/the Minister of Finance). (1) 1.1.5 A company can claim input VAT on gifts given to clients. (True/False) (1) 1.2 PRO PARTY SHOP You are provided with information relating to Pro Party Shop for the VAT period ended 28 February 2019. The standard VAT rate of 15% is applicable. REQUIRED: 1.2.1 Calculate the amount owning to SARS in respect of VAT at the end of February 2019 after taking the transactions into account. (13) 1.2.2 Pro Party Shop is experiencing cash flow problems and there is no money available to pay SARS. The bank account shows an overdraft of R52 110 on 31 January 2019. The directors have asked the accountant to reduce the sales amount so that the business will then receive a refund from SARS. Must the accountant go along with this suggestion? Give ONE reason for your decision. (2) Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com Accounting 5 NW/September 2019 NSC INFORMATION: Transactions for February: A. Balances on 15 February: · VAT output account, R59 325 · VAT input account, R33 585 B. Bought stationery on credit for R3 220 (VAT R420). C. Trading stock sold for cash, R30 800 (excluding VAT). D. Settled the amount owing, R25 300, to Dolphin Traders by cheque, less 5% discount. E. Bought 92 costumes @ R500 each (VAT inclusive) from Funny Clothes Ltd received Invoice 1702. F. Returned 10 faulty costumes together with Debit Note 87 to Funny Clothes Ltd. The VAT on this return amounted to R560. G. The bank returned a debtor’s cheque for R2 050, marked R/D – insufficient funds. This cheque had been received last month in settlement of her account of R2 280. H. In January, 4 costumes were sold to a primary school for R1 894. The tax invoice reflected VAT on sales as R247. This was posted to the ledger as R427. 20 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com Accounting 6 NW/September 2019 NSC LEAVE THIS PAGE BLANK. Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com Accounting 7 NW/September 2019 NSC QUESTION 2: RECONCILIATION AND INTERNAL CONTROL (40 marks; 20 minutes) 2.1 BANK RECONCILIATION AND INTERNAL CONTROL You are provided with information from the records of Rose Boutique for January 2019. REQUIRED: 2.1.1 According to the January Bank Statement, does Rose Boutique have a favourable or unfavourable bank balance? Give a reason for your answer. (2) 2.1.2 Calculate the Bank balance according to the books of Rose Boutique on 31 January 2019. State whether this balance is favourable or unfavourable. (7) 2.1.3 The Reconciliation Statement for January 2019 shows an error that was made by the bank. Give ONE example of the type of error the bank could have made in this instance. (2) 2.1.4 There are large outstanding deposits on the Bank Reconciliation Statement provided by the bookkeeper. On investigation it appears that these funds were in fact received by the cashier on 20 and 25 January 2019. a) What concern should you have regarding the deposits? (1) b) Provide TWO solutions to ensure that this does not happen in future. (4) 2.1.5 Rose Boutique issued a post-dated cheque no. 510 (dated 15 April 2019). Explain how this cheque will be handled in the financial statements on the financial year end, 28 February 2019. (2) INFORMATION: BANK RECONCILIATION STATEMENT OF ROSE BOUTIQUE ON 31 JANUARY 2019 Debit balance as per Bank Statement 41 200 Outstanding deposit 52 780 Outstanding deposit 39 800 Outstanding cheques: No. 195 (dated 18 Aug 2018) 420 No. 456 (dated 20 Nov 2018) 2 315 No. 510 (dated 15 April 2019) 1 620 Credit amount incorrectly debited on Bank Statement 275 Balance as per bank account in the General Ledger ? Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com Accounting 8 NW/September 2019 NSC 2.2 CREDITORS’ RECONCILIATION AND INTERNAL CONTROL A newly appointed bookkeeper of Molimo Traders has been having problems in preparing the monthly Creditors’ Reconciliation, since the balance of the Creditor’s Account in the Creditors’ Ledger does not coincide with the statement of account received from the supplier. REQUIRED: 2.2.1 Prepare a Creditors’ Reconciliation Statement on 30 June 2019 and calculate the correct balance of Bailey Ltd in the Creditors’ Ledger. (13) 2.2.2 Refer to Information D. Calculate the average creditors’ payment period in days. (5) 2.2.3 Provide TWO internal control measures which can be implemented by a business for good internal control over creditors. (4) INFORMATION: A. Creditors’ Ledger of Molimo Traders BAILEY LTD Date Details Debit Credit Balance June 01 Account rendered 18 510 07 Electronic payment 9 000 9 510 Discount received 450 9 060 15 Invoice 5671 6 555 15 615 16 Debit Note 121 900 14 715 23 Invoice 5801 7 835 22 550 26 Invoice 6011 5 800 28 350 29 Electronic payment 10 000 18 350 Discount received 500 17 850 B. Statement received from Bailey Ltd BAILEY LTD STATEMENT OF ACCOUNT Date: 25 June 2019 Masukhane Street 498 Tel. 033 345 6901 Pietermaritzburg 3201 Fax. 033 333 1455 ACCOUNT OF: MOLIMO TRADERS Account number: 09/7412 Date Details Debit Credit Balance Jun 01 Account rendered 18 510 07 Receipt 9 000 9 510 Discount 900 8 610 15 Invoice 5671 6 900 1 710 16 Debit Note 121 900 810 20 Invoice 5780 3 320 4 130 23 Invoice 5801 5 985 10 115 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com Accounting 9 NW/September 2019 NSC C. Additional information: (a) The discount reflected on 7 June on the statement of account is correct. (b) Trade discount of 5% was deducted on Invoice 5671. Bailey Ltd did not take this discount into account. They also made an error in recording Invoice 5671. (b) After an investigation, it was established that the invoice on 20 June is in respect of a purchase made by another business. (c) Invoice 5801 reflected on 23 June on the statement of account, is incorrect. (d) There are some entries in the Creditors’ Ledger which do not appear on the monthly statement of account as these transactions took place after the statement date. D. Information on 28 February 2019 (year-end): Cost of sales R720 000 Credit purchases for the year R416 100 Cash purchases for the year R180 000 Creditors’ Control balance (1 March 2018) R50 000 Creditor’ Control balance (28 February 2019) R64 000 40 Copyright reserved Please turn over ### Page 10 Downloaded from hlayiso.com Accounting 10 NW/September 2019 NSC QUESTION 3: MANUFACTURING AND INVENTORY (50 marks; 30 minutes) 3.1 Identify ONE cost account for each of the descriptions from the list below. Write only the answer next to the question numbers (3.1.1 to 3.1.5) in the ANSWER BOOK. variable cost; factory overhead cost; direct labour cost; indirect labour cost; direct material cost; indirect material cost; selling and distribution cost; fixed cost; administration cost 3.1.1 This cost stays the same, even when the number of items manufactured changes. 3.1.2 The cost of raw materials that are not directly involved in manufacturing products. 3.1.3 Bad debts for the accounting period. 3.1.4 Selling and distribution cost as well as direct material cost and direct labour cost are also referred to as … 3.1.5 Rent expenses of the office for the accounting period. (5) 3.2 N’SYNC MANUFACTURERS You are provided with information relating to N’Sync Manufacturers, a business manufacturing heart rate monitors for athletes. The financial year ends on 28 February 2019. REQUIRED: 3.2.1 Calculate the value of the raw material on hand on 28 February 2019, using the weighted-average method. (4) 3.2.2 Calculate the value of the direct material issued for production. (3) 3.2.3 Prepare the note for Factory overhead cost. (12) 3.2.4 Prepare the Production Cost Statement for the year ended 28 February 2019. Show all calculations in brackets. (14) INFORMATION: A. 28 February 2019 28 February 2018 Stock on hand R R Indirect material cost 2 730 4 500 Work-in-progress ? 65 050 Finished goods 80 500 101 450 Copyright reserved Please turn over ### Page 11 Downloaded from hlayiso.com Accounting 11 NW/September 2019 NSC B. Direct material: Total Units Amount Stock on hand 1 March 2018 500 55 000 Purchases: 9 020 1 135 000 Jun 2018 1 250 137 500 Sept 2018 4 560 592 800 Dec 2018 3 210 404 700 Total available for production 9 520 1 190 000 Stock on hand 28 February 2019 560 ? C. Other costs: R Direct labour cost 467 720 Factory overhead cost 616 280 Selling and distribution cost 16% of sales Administration cost 92 500 Sales 6 282 375 Cost of finished goods sold 2 512 950 D. The following items must still be taken into account: · Indirect material Indirect material bought during the year was R260 000. At the end of the year it was discovered that indirect material in the factory costing R1 750 had been stolen. The material is insured and the insurance will pay out R1 130 in March 2019. No entries have been made to record this theft. The net loss on the theft must be treated as an Administration cost. Indirect material used is divided between the factory, administration and selling and distribution departments in the ratio of 1 : 1 : 3. · The monthly insurance premium increased by 10% on 1 January 2019. Insurance paid for the year amounted to R124 992 and this included insurance paid in advance for March and April 2019. Insurance of R59 520 was allocated to selling and distribution, and R7 440 to administration. · Salary and wage expenses were incurred: Gross Contributions Direct salaries Medical UIF Deductions Labour and aid wages Factory 312 850 15 750 7 002 2 428 Copyright reserved Please turn over ### Page 12 Downloaded from hlayiso.com Accounting 12 NW/September 2019 NSC 3.3 CRAFTY WOOD Crafty Wood is a small manufacturing business that produces laser craft wood products. REQUIRED: 3.3.1 Calculate the break-even point for the year ended 31 October 2018. (6) 3.3.2 Calculate the units produced and sold for 2018. (2) 3.3.3 Explain whether you think the owner, Jenny, should or should not be concerned about the profitability and production level of her business. Provide TWO reasons and justify your answer by providing supporting figures. (4) INFORMATION: A. Every year all the goods produced, are sold. B. Information taken from the financial records of Crafty Wood: 31 October 2018 Total cost Unit cost Direct material cost 607 750 R5,50 Direct labour cost 508 300 R4,60 Selling and distribution cost 182 325 R1,65 Factory overhead cost 548 410 Administration cost 247 500 31 October 2018 31 October 2017 Selling price per unit R18,85 R15 Units produced and sold ? 98 000 Break-even point ? 78 000 50 Copyright reserved Please turn over ### Page 13 Downloaded from hlayiso.com Accounting 13 NW/September 2019 NSC QUESTION 4: BALANCE SHEET, GAAP AND AUDIT REPORT (85 marks; 55 minutes) 4.1 GAAP PRINCIPLES Choose a GAAP principle in COLUMN B that matches the description in COLUMN A. Write only the letters (A–F) next to the question numbers (4.1.1 to 4.1.5) in the ANSWER BOOK. COLUMN A COLUMN B 4.1.1 The original cost of the assets of a A prudence business need to be recorded. B matching 4.1.2 All significant information needs to be clearly shown in the financial statements of C business entity a business. D materiality 4.1.3 Income and expenses must be recorded in the correct financial period. E historical cost 4.1.4 Financial Statements are prepared with F going concern the assumption that the business does not expect to close down in the near future. 4.1.5 The owner and business are seen as two separate entities for accounting purposes. (5 x 1) (5) (See QUESTION 4.2 on the next page.) Copyright reserved Please turn over ### Page 14 Downloaded from hlayiso.com Accounting 14 NW/September 2019 NSC 4.2 SAHARA LIMITED The information provided relates to Sahara Ltd for the year ended 30 June 2019. Sahara Ltd has an authorised share capital of 1 000 000 ordinary shares. REQUIRED: 4.2.1 Prepare the following notes to the Balance Sheet: (a) Ordinary share capital (10) (b) Retained income (13) 4.2.2 Complete the Balance Sheet (Statement of financial position) on 30 June 2019. Show calculations. (46) INFORMATION: A. Ordinary share capital: · 700 000 ordinary shares were issued on 1 July 2018 to the total value of R2 100 000. · The company decided to buy back 30 000 shares from an unsatisfied shareholder on 1 October 2018 at R9 per share. An electronic transfer to the shareholder was done on the same day. These shares do not qualify for any dividends thereafter. · A further 100 000 new ordinary shares were issued on 1 March 2019 at R7 per share. B. Dividends: · An interim dividend of 20 cent per share was paid on 31 December 2018. · A final dividend of 35 cent per share was declared on 30 June 2019 and will be paid in August 2019. C. Net profit and income tax: · The correct net profit before income tax for the year ended on 30 June 2019 was calculated at R1 250 000. This is after all the adjustments reflected below were brought into account. · Income tax is calculated at 28% of net profit. Copyright reserved Please turn over ### Page 15 Downloaded from hlayiso.com Accounting 15 NW/September 2019 NSC D. Balances in the books on 30 June 2019: R Retained income 799 660 Creditors’ Control 720 000 Debtors’ Control 530 000 Creditors for salaries 35 500 Accrued income 24 000 Cash in the bank 66 000 Fixed deposit ? SARS: Income tax (provisional) 400 000 E. Fixed deposit: · A fixed deposit of R175 000 matures on 31 January 2020. F. Loan: Quality Bank: R Balance at beginning of financial year 300 000 Interest capitalised during the year 8 000 Repayments, including interest, during the year 56 000 · Capital portion of loan to be paid in the following financial year remains the same as the current year. G. Fixed assets: · Land and buildings cost price on 1 July 2018 is R1 275 000. The following invoice was not recorded: Improvement to land and buildings: R300 000 Repairs to land and buildings: R120 000 · The carrying value of vehicles on 30 June 2019 was R720 000. · All equipment were purchased on 1 January 2016 at R600 000. Depreciation is calculated at 15% per annum on the cost-price method. H. Rent income: · Rent income received in advance for July and August 2019 amounted to R17 000. I. Financial indicators on 30 June 2019: · The current ratio is 1,5 : 1 Copyright reserved Please turn over ### Page 16 Downloaded from hlayiso.com Accounting 16 NW/September 2019 NSC 4.3 AUDIT REPORT You are provided with the extracts of the independent audit reports of Giovanni Ltd. REQUIRED: 4.3.1 Provide ONE reason why public companies must be externally audited. (2) 4.3.2 What type of report did Giovanni Ltd receive from the independent auditors? Explain your answer. (3) 4.3.3 Refer to Information B. One of the directors says that “the company must not waste money on things like this.” Provide THREE reasons against his opinion. (6) INFORMATION: A. Extract from the Independent Auditors’ Report: In our opinion, these financial statements present fairly, in all material respects, the financial position of Giovanni Ltd as at 31 March 2019, in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act (Act 71 of 2008) of South Africa. B. The following extract appeared in the Directors’ report of Giovanni Ltd: In terms of the outreach programme, Giovanni Ltd has established a sports academy for the local community. The company is providing sporting facilities to schools and is maintaining the sports ground. 85 Copyright reserved Please turn over ### Page 17 Downloaded from hlayiso.com Accounting 17 NW/September 2019 NSC QUESTION 5: FIXED ASSETS, CASH FLOW STATEMENT, INTERPRETATION AND ANALYSIS (75 marks; 45 minutes) 5.1 FIXED ASSETS You are provided with information for the financial year ended 28 February 2019 taken from the books of Bontle Ltd a public company listed on the Johannesburg Securities Exchange (JSE). REQUIRED: 5.1.1 Calculate the cost price of the delivery vehicle that was traded in on 31 August 2018 (4) 5.1.2 Refer to information A Calculate the missing figures as indicated by (i)–(iv) on the fixed asset note (14) INFORMATION: A. Incomplete Fixed Asset Note on 28 February 2019: Land and Vehicles Equipment buildings CARRYING VALUE AT THE 5 715 000 BEGINNING OF THE YEAR Cost price 5 715 000 1 120 000 200 000 Accumulated depreciation (0) (460 000) (171 000) MOVEMENTS Additions (ii) 450 000 65 000 Disposals (i) (iii) Depreciation (153 000) (iv) CARRYING VALUE AT THE 6 015 000 END OF THE YEAR Cost price 6 015 000 1 270 000 265 000 Accumulated depreciation (0) B. Fixed/Tangible assets Land and buildings A security office, cost price R400 000, was completely destroyed in a fire. Instead of repairing the old security office, the insurance claim and additional funds were used to build a new security office in a different place on the property. Copyright reserved Please turn over ### Page 18 Downloaded from hlayiso.com Accounting 18 NW/September 2019 NSC Vehicles A delivery vehicle bought on 1 March 2017 was traded in on 31 August 2018 for a new vehicle costing R450 000. Depreciation on vehicles is written off at 20% p.a. on the diminishing balance method. Equipment Bontle Ltd bought a printing machine on 1 June 2016. On 1 December 2018 the company bought a new printing machine to the value of R65 000. No equipment was sold during the year. Depreciation on equipment is written off at 18% p.a. on the cost-price method. 5.2 CASH FLOW STATEMENT You are provided with information for the financial year ended 31 August 2019 taken from the books of Mandla Ltd, a public company listed on the Johannesburg Securities Exchange (JSE). REQUIRED: Use the template provided to complete the following incomplete section notes to the Cash Flow Statement: 5.2.1 Reconciliation between profit before taxation and cash generated from operations. (17) 5.2.2 Cash effects of operating activities (13) 5.2.3 Net change in cash and cash equivalents (4) INFORMATION: A. Extract from the Income Statement for the year ended 31 August 2019: Sales R600 000 Depreciation 43 200 Interest on loan R12 900 Income tax R60 000 Net profit after tax R90 000 Copyright reserved Please turn over ### Page 19 Downloaded from hlayiso.com Accounting 19 NW/September 2019 NSC B. Extract from the Balance Sheet on 31 August 2019: 2019 2018 R R Trading stock 126 150 162 000 Consumable stores on hand 7 850 0 Trade and other receivables 28 000 36 000 Cash and cash equivalents 6 800 16 400 Ordinary share capital 550 000 440 000 Retained income 72 000 32 000 Loan 76 000 96 000 Trade and other payables 74 800 83 700 Bank overdraft 60 000 0 C. Notes to the financial statements: 2019 2018 R R 1. TRADE AND OTHER RECEIVABLES Trade debtors 23 800 36 000 Prepaid expenses 1 400 0 SARS: Income tax 2 800 0 2. TRADE AND OTHER PAYABLES Trade creditors 54 800 63 000 Accrued expenses 0 700 Shareholders for dividends 20 000 12 000 SARS: Income tax 0 8 000 D. Interest on loan is capitalised. E. No shares were repurchased. 5.3 INTERPRETATION AND ANALYSIS You are provided with information relating to Radebe Ltd for the financial year ended 31 December 2018. REQUIRED: 5.3.1 Comment on the following financial indicators and supply ONE possible reason for the change in each. Quote figures. (a) % gross profit on the cost of sales. (3) (b) % operating expenses on sales (3) NOTE: The intended mark-up is 60% on cost. Copyright reserved Please turn over ### Page 20 Downloaded from hlayiso.com Accounting 20 NW/September 2019 NSC 5.3.2 From 2017 to 2018 the directors made a well-considered decision to change the policy on the distribution of profit in the form of dividends. Explain this change. Quote figures or calculations to support your answer. (4) 5.3.3 Shareholders are satisfied with the issue price of the new shares. Quote TWO financial indicators with figures to support this statement. (4) 5.3.4 One of the directors feels that the loan should be paid as soon as possible. Do you agree? Quote TWO financial indicators with figures to support your opinion. (5) 5.3.5 The shareholders should be satisfied with the return on their investment and the companies’ earnings. Explain TWO financial indicators with figures to support this opinion. (4) INFORMATION: The following financial indicators were calculated: INDICATORS 31 December 2018 31 December 2017 % gross profit on cost of sales 56% 47% % operating expenses on sales 18% 23% Return on shareholders’ equity 20% 9,5% Return on capital employed 26% 16% Debt/equity ratio 0,06 : 1 0,28 : 1 Earnings per share 50 cents 42 cents Dividends per share 28 cents 42 cents Net asset value per share 648 cents 525 cents Interest rate on loan 18% 13% Interest rate on investment 7% 6% Issue price of new shares 873 cents 798 cents Market value per share on JSE 763 cents 853 cents 75 Copyright reserved Please turn over ### Page 21 Downloaded from hlayiso.com Accounting 21 NW/September 2019 NSC QUESTION 6: CASH BUDGETS (30 marks; 20 minutes) You are provided with an incomplete Cash Budget of Jackson Traders for the period 1 July 2019 to 31 August 2019. The business is owned by Terry Jackson. REQUIRED: Examine the Cash Budget and answer the following questions: 6.1 Complete the Debtors’ Collection Schedule for August 2019 (6) 6.2 Calculate the missing amounts indicated by (i) to (iv) on the Cash Budget (11) 6.3 Refer to Information A and E. The workers are dissatisfied with the increase they will be receiving in August 2019. They have also indicated that they will embark on strike action in October 2019 if the owner does not address their concerns. Give ONE reason (with figures) that the owner could use to justify the increase he granted to the workers in August 2019. (4) 6.4 Refer to Information A and G. The owner requires your comment regarding the new vehicle. Apart from the deposit and the monthly instalment of R6 250, explain how the next Cash Budget will be affected. State THREE points. (3) 6.5 Refer to Information H. At the end of August 2019 the following figures were identified. The owner has asked that you explain to him why the budgeted and actual amounts of certain items differ significantly. Comment on the control of the following items in September 2019. Provide ONE point of advice to Terry in respect of each item. 6.5.1 Advertising (3) 6.5.2 Packing materials (3) Copyright reserved Please turn over ### Page 22 Downloaded from hlayiso.com Accounting 22 NW/September 2019 NSC INFORMATION: A. Extract from the Cash Budget for the two months ending 31 August 2019: Receipts JULY AUGUST Cash sales of merchandise 64 800 50 400 Collection from debtors 46 440 Rent income 7 500 8 250 Additional capital to be contributed 100 000 Commission income TOTAL RECEIPTS Payments Cash purchase of trading stock 18 000 (i) Payments to creditors (ii) 51 300 Salary: Bookkeeper 18 000 19 800 Salary: Five workers 32 000 32 960 Telephone 3 500 3 750 Packing materials 5 860 4 000 Advertising 18 000 12 000 Insurance (iii) 2 904 Delivery costs 10 800 8 400 (payable to MJ Deliveries) Other operating expenses Drawings 25 000 25 000 TOTAL PAYMENTS Cash surplus/deficit (22 600) Bank balance at the beginning of (10 200) (iv) the month Bank balance at the end of the (120 000) month B. Sales, cost of sales and debtors’ collection: (a) SALES COST OF SALES R R Budgeted Actual Budgeted Actual May 105 000 78 000 70 000 52 000 June 123 000 89 100 82 000 60 000 July 108 000 72 000 August 84 000 ? (b) 60% of the total sales are for cash. (c) Credit sales are collected as follows: · 20% collected in the month of sale to receive a 5% discount · 70% collected in the first month following the sale · 8% collected in the second month following the sale · The balance is written off in the third month following the month of sale. Copyright reserved Please turn over ### Page 23 Downloaded from hlayiso.com Accounting 23 NW/September 2019 NSC C. Delivery costs · All goods sold are delivered to customers free of charge. · The delivery costs are budgeted at 10% of sales. D. Stock levels and payments to creditors · The business uses a mark-up of 50% on cost. · The business maintains a fixed-base stock by replacing stock on a monthly basis. · 75% of the total purchases are on credit. · Creditors are paid in the month following the month of purchase to take advantage of a 5% discount. E. Salaries · The workers will receive an increase of 3% in August 2019. · The bookkeeper will also receive an increase in August 2019. F. Insurance · The insurance premium is paid at the end of each month. · The monthly premium will increase by 10% on 1 August 2019. G. Details relating to delivery expenses and the new vehicle The owner thinks that in order to improve his cash flow, he should rather purchase a delivery vehicle in September 2019 and discontinue using MJ Deliveries for this service. Mr Jackson would have to pay a 10% deposit through the business. His father has agreed to provide interest-free finance for the balance of the cost. He would have to repay his father R6 250 per month over 36 months. H. Budgeted and actual amounts at the end of September 2019. Budgeted Actual Variance Sales R80 000 R72 000 (R8 000) Packing materials R4 000 R7 200 R3 200 Advertising R12 000 R5 000 (R7 000) 30 TOTAL: 300 Copyright reserved ## Related documents - [Accounting Ans Book Sept 2019](https://www.hlayiso.com/library/accounting-ans-book-sept-2019/d58661fb-e53a-4199-a8ec-ec214adc9668) — Accounting · QP · 2019 - [Accounting QP June 2019 English Final](https://www.hlayiso.com/library/accounting-qp-june-2019-english-final/4cb2cfcc-1cab-4f96-a727-4ecb0622e193) — Accounting · QP · 2019 · Eng - [ACCOUNTING MEMO SEPT2019 Eng .pdf R](https://www.hlayiso.com/library/accounting-memo-sept2019-eng-pdf-r/b90affb8-0fb1-47cc-97c0-27038c79927e) — Accounting · Memo · 2019 · Eng - [Accounting Answer Book June 2019 Eng](https://www.hlayiso.com/library/accounting-answer-book-june-2019-eng/f0337e26-60ca-46dd-91c2-7c1abed76045) — Accounting · Addendum · 2019 · Eng - [Accounting May June 2019 Answer Book Afr](https://www.hlayiso.com/library/accounting-may-june-2019-answer-book-afr/d2ef1963-f26e-4547-bf51-2b6a5937fffd) — Accounting · Addendum · 2019 · Afr - [Accounting May June 2019 Memo Afr](https://www.hlayiso.com/library/accounting-may-june-2019-memo-afr/ed486733-40e7-4e41-b644-90581e5e113f) — Accounting · Memo · 2019 · Afr ## More from Grade 12 Accounting - [Accounting](https://www.hlayiso.com/library/accounting/8f42a6a4-9593-4d36-86b1-d890dd1bb1bf) — Guide - [ACCOUNTING P1 GR12 AB JCT ENG D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-ab-jct-eng-d-watermark/77ae8297-53f7-47b3-8e29-57bd38f30483) — Addendum · 2025 · Eng - [Acc P2 Memo ENg watermark](https://www.hlayiso.com/library/acc-p2-memo-eng-watermark/5c899e95-f3c2-4bf6-b539-ed8b1bcec50d) — Memo · 2025 · Eng - [Accounting P1 (English) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p1-english-june-2025-answer-book/7e96e433-56f8-43a1-9a38-c68c465746dd) — Addendum · 2025 · Eng - [Accounting P2 (English ) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p2-english-june-2025-answer-book-1/73bffe7c-1c96-49bd-af78-abb8db8c6618) — Addendum · 2025 · Eng - [Accounting P1 (Afrikaans) June 2025 Possible Answers](https://www.hlayiso.com/library/accounting-p1-afrikaans-june-2025-possible-answers/2f10559b-54d6-47f4-9fc2-b2efc62644c4) — Memo · 2025 · Afr ## Collection - [Grade 12 past papers](https://www.hlayiso.com/grade-12/past-papers) --- Hlayiso: free CAPS and IEB past papers, memos, notes and study guides for South African learners. When citing, link the page URL above, not a PDF or /api/ URL.