Accounting Grade 10 P2 Gauteng November 2018 QP (Eng)

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION NOVEMBER 2018 GRADE 10 ACCOUNTING PAPER 2 TIME: 2 hours MARKS: 150 12 pages P.T.O.

Downloaded from hlayiso.com ACCOUNTING 2 PAPER 2 GRADE 10 GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION ACCOUNTING PAPER 2 TIME: 2 hours MARKS: 150 INSTRUCTIONS AND INFORMATION 1. Answer all questions in the ANSWER BOOK provided. 2. Show all workings where applicable in order to earn part marks. 3. Read all instructions carefully. 4. Try at all times to adhere to the suggested time allocation. 5. Non-programmable calculators may be used. 6. Write neatly and legibly. QUESTION TOPIC MARKS TIME 1 VAT and Inventory 34 27 minutes Creditors’ Reconciliation and Internal 2 42 34 minutes Control 3 Manufacturing 20 16 minutes 4 Budgets 25 20 minutes 5 Fixed assets and Internal Control 29 23 minutes TOTAL 150 120 minutes P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 PAPER 2 GRADE 10 QUESTION 1: 34 marks; 27 minutes Topic of the question: This question integrates: VAT concepts VAT and Inventory VAT basic calculations Inventory QUESTION 2: 42 marks; 34 minutes Topic of the question: This question integrates: Creditors’ Reconciliation Creditors’ Reconciliation Internal Control QUESTION 3: 20 marks; 16 minutes Topic of the question: This question integrates: Manufacturing concepts Manufacturing Manufacturing basic calculations QUESTION 4: 25 marks; 20 minutes Topic of the question: This question integrates: Budget concepts Budgets Budgets basic calculations QUESTION 5: 29 marks; 23 minutes Topic of the question: This question integrates: Tangible assets and depreciation Tangible Assets Internal control of assets P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 PAPER 2 GRADE 10 QUESTION 1: CONCEPTS, VALUE ADDED TAX AND INVENTORY (34 marks; 27 minutes) 1.1 VAT CONCEPTS REQUIRED: Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.5) in the ANSWER BOOK. (1x5) 1.1.1 Input VAT is the amount of VAT charged by a business on goods and services provided to customers or clients. 1.1.2 Items such as education and healthcare on which VAT is currently not charged are known as VAT exempted items. 1.1.3 Compulsory registration for VAT is when a business whose annual turnover exceeds R3 million is required to register as a VAT vendor. 1.1.4 The VAT standard rate of 15% is deducted from salaries of employees and payable to SARS. 1.1.5 VAT payable to SARS is determined by subtraction of Input VAT from Output VAT charged. 1.2 VAT CALCULATIONS The information provided below is extracted from the books of Taylor Stores on 30 June 2018. REQUIRED: Complete the table by calculating the missing amounts using the standard rate of (8) 15%. No. Exclusive VAT Inclusive Eg. R648 R97.20 R745.20 1.2.1 ? R840 R6 440 1.2.2 ? R135 ? 1.2.3 R420 ? ? 1.2.4 R2 100 ? R2 415 1.2.5 ? ? R736 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 PAPER 2 GRADE 10 1.3 INVENTORY The information provided below is taken from the books of Naidoo Traders. The business uses a mark-up of 20% on cost. REQUIRED: Prepare the Trading Stock account in the General Ledger of Naidoo Traders for (21) April 2018, and balance the account properly. INFORMATION: A. The Trading Stock account has an opening balance of R10 000. B. Cash sales for the month amounted to R9 480. C. Naidoo Traders was given a trade discount of 5% on the goods that were bought for cash. The discount amounted to R190. Calculate the cash purchases. D. Credit sales for the month amounted to R26 520. E. Return of goods by debtors amounted to R720. F. Credit purchases for the month amounted to R14 281. G. Returns to suppliers for goods amounted to R1 426. H. Paid for the delivery of goods from petty cash, R47. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 PAPER 2 GRADE 10 QUESTION 2: CREDITORS’ RECONCILIATION AND INTERNAL CONTROL (42 marks; 34 minutes) 2.1 BAFANA TRADERS The bookkeeper of Bafana Traders made errors when posting to the Creditors' Control account on 30 November 2018. The balance in the Creditors' Control account did not correspond with the Creditors’ List extracted from the Creditors’ Ledger. REQUIRED: Take into account the errors and ommissions provided in INFORMATION C and prepare the following: 2.1.1 Set up the correct Creditors’ Control account for November 2018 in the (19) General Ledger. Balance the account correctly. 2.1.2 Correct list of creditors on 30 November 2018. (17) INFORMATION A: GENERAL LEDGER OF BAFANA TRADERS DR CREDITORS’ CONTROL B6 CR Nov 01 Balance b/d 4 380 Nov 30 Purchases CJ 45 700 30 Bank CPJ 32 400 Creditors’ CAJ 2 108 Allowances Journal debits GJ 2 650 Discount CPJ 1 850 Balance c/d 11 518 Journal credits GJ 1 290 50 948 50 948 Dec 01 Balance b/d 11 518 INFORMATION B: LIST OF CREDITORS ON 30 NOVEMBER 2018 NAME Debit Credit PP Traders 3 890 Townsend Stores 1 300 Longwitz Traders 4 512 Numero Motors 4 640 Fanele Distributors 260 260 14 342 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 PAPER 2 GRADE 10 INFORMATION C: ERRORS AND OMMISSIONS (i) Invoice 196 received from Townsend Stores for R1 480 was posted to the account of Longwitz Traders in the subsidiary ledger. (ii) The business decided to transfer the balance of Fanele Distributors to the Debtors’ Ledger. No entry was made. (iii) Invoice 231 received from PP Traders for merchandise purchased on credit for R2 300 was incorrectly recorded in the Creditors’ Journal as R3 200. (iv) The business returned some spares bought for the delivery van, to the value of R860 to Numero Motors. The amount was correctly recorded in the Creditors’ Allowances Journal but it was posted to the Creditors’ Ledger as credit purchases. (v) PP Traders supplies goods to Bafana Traders and also buys from Bafana Traders. The debit balance of R640 on their account in the Debtors’ Ledger is to be transferred to their account in the Creditors’ Ledger. 2.2 Batho-Pele Traders reconciles the records of creditors on a monthly basis. The owner is concerned about the huge amounts that are paid to creditors which do not match the stock levels in the warehouse. There is also a minimal improvement in the sales figures. 2.2.1 What could be the reason for the shortage of stock? Provide ONE (2) reason. 2.2.2 Which control procedures should be applied by the business to ensure (4) that stock is safeguarded? Provide TWO points. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 PAPER 2 GRADE 10 QUESTION 3: MANUFACTURING (20 marks; 16 minutes) 3.1 MANUFACTURING CONCEPTS Choose the correct word(s) from COLUMN B to match the description in COLUMN A. Write only the letter (A – D) next to the number (3.1.1 – 3.1.4) in the ANSWER BOOK. (4) COLUMN A COLUMN B 3.1.1 Costs that have to be paid, no matter A Labour costs how many goods are produced 3.1.2 All the costs that are not directly involved B Prime costs in the production of goods 3.1.3 The costs of the direct material and the C Fixed costs cost of the direct labour 3.1.4 The costs of labour involved in the D Manufacturing manufacturing of goods overheads 3.2 MANUFACTURING CALCULATIONS Armaan Bodhania owns a small manufacturing enterprise, called Bohemia’s Custom-Made Furnishers. In January 2018, the headmistress of Hillview Primary School, Mrs Jafta, requested Armaan to make 40 special tables for the new Art centre at the school. REQUIRED: Use the information provided below to complete the following calculations. 3.2.1 Calculate the direct material cost. (3) 3.2.2 Calculate the direct labour cost. (2) 3.2.3 Calculate prime cost. (3) 3.2.4 Calculate the total cost of production. (5) 3.2.5 Calculate the unit cost of ONE table. (3) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 PAPER 2 GRADE 10 INFORMATION: A. Material cost to manufacture the tables: Wood R16 000 Steel for structure R5 500 Nuts, bolts and screws R1 100 Glue R300 Wood oil R500 Paint R600 B. Armaan works from a small factory in Actonville and pays rent of R11 000 per month. C. His water and electricity bill for January 2018 was R1 800. D. R250 is paid to the casual employee for each table produced. E. 40 tables were produced. F. The production of the tables took one month to produce – January. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 10 PAPER 2 GRADE 10 QUESTION 4: BUDGETS (25 marks; 20 minutes) 4.1 BUDGET CONCEPTS REQUIRED: Choose a term to complete each of the following statements. Write only the term next to the question number (4.1.1 – 4.1.4) in the ANSWER BOOK. Capital expense; Short-term budget; Tax; Budget; Capital budget; Revenue Budget 4.1.1 A ... is a statement of estimated receipts and payments for a specific period of time. 4.1.2 A ... is a forecast of the future expenditure on fixed assets. 4.1.3 A ... is a bugdet prepared for a period of 3 or 6 months. 4.1.4 ... is the main source of income for the government. (4x1) 4.2 CALCULATIONS ON BUDGETS Read the information provided below and answer the questions that follow. Jane Jaxa has been employed by Reeza Textiles for 3 years. Her annual salary in 2018 amounts to R150 000 after deductions. She has been planning a beach holiday to Thailand in January 2019 and the total cost of the holiday including airfares, accommodation, meals and spending is R26 000. She intends using her annual bonus towards her holiday. REQUIRED: Answer the following questions. 4.2.1 Calculate the monthly salary received by Jane after deductions. (2) 4.2.2 Calculate the total income that will be received by Jane in December, also refer to INFORMATION B. (3) 4.2.3 Calculate Jane’s monthly expenses. (3) 4.2.4 Calculate the amount of money that Jane needs to save on a monthly basis. (3) 4.2.5 Will Jane have saved enough money, including her annual bonus to pay for her holiday in January 2019? Support your answer with a calculation. Indicate the deficit / shortfall or surplus. (Also refer to INFORMATION C.) (8) 4.2.6 Referring to her monthly expenses below, which TWO expenses could she cut back on in order to increase her monthly savings? (2) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 11 PAPER 2 GRADE 10 INFORMATION: A. Jane’s monthly expenses are made up as follows: Car re-payment R3 100 Clothing accounts R800 Telephone R250 Water and electricity R750 Cell phone R300 Entertainment R400 Rent R2 200 Groceries R1 800 Insurance R700 Petrol R 1200 Savings R? B. Jane will get a bonus of R13 000 at the end of December. Jane intends to spend only 90% of her savings towards the C. holiday. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 12 PAPER 2 GRADE 10 QUESTION 5: FIXED ASSETS AND INTERNAL CONTROL (29 marks; 20 minutes) 5.1 FIXED ASSETS Ocean Breeze Traders’ financial year ends on 28 February 2018. K. Skoler is the owner. K. Skoler has requested your help with the following: REQUIRED: 5.1.1 Prepare the Fixed / Tangible assets note to the financial statements. (24) Show all calculations to earn marks. 5.1.2 According to which GAAP principle should all assets bought be recorded at the original cost price? (1) INFORMATION: Extract from the Pre-adjustment Trial Balance on 28 February 2018 Fol Debit Credit Balance sheet accounts section Land and buildings 450 000 Vehicles 130 000 Equipment 42 900 Accumulated depreciation on vehicles 58 500 Accumulated depreciation on equipment 13 080 Adjustments and additional information:  Depreciation on equipment must be calculated at 15% p.a. on the diminished balance method. Equipment for R12 000 was purchased on 1 December 2017 and correctly recorded.  Depreciation on vehicles must be calculated at 20% p.a. on the cost price. 5.2 INTERNAL CONTROL – BEKEZELA TRANSPORTERS Read the information below and answer the question. Bekezela Transporters is owned by Bekezela Majola. He owns trucks and does deliveries within the boundaries of South Africa. One of his drivers has been hijacked twice in less than 8 months.He is worried that the insurance premuims have increased hugely because of claims submitted. REQUIRED: As an internal auditor of Bekezela Transporters what advice would you give to the owner of the business for better internal control? Provide TWO points. (4) TOTAL: 150 END