Accounting Grade 11 P2 Gauteng November 2021 QP (Eng)

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION NOVEMBER 2021 GRADE 11 ACCOUNTING (PAPER 2) TIME: 2 hours MARKS: 150 11 pages + 1 formula sheet and an answer book of 10 pages P.T.O.

Downloaded from hlayiso.com ACCOUNTING 2 (Paper 2) GRADE 11 INSTRUCTIONS AND INFORMATION 1. Answer ALL the questions. 2. A special ANSWER BOOK is provided in which to answer ALL the questions. 3. A FORMULA SHEET for financial indicators is provided at the back of this question paper. You may use it, if necessary. 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 TIME IN MINUTES 1 Reconciliations 40 32 minutes 2 Cost Accounting 40 32 minutes 3 VAT and Inventory Systems 30 24 minutes 4 Cash Budgets and Projected Income 40 32 minutes Statement TOTAL 150 120 minutes P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 (Paper 2) GRADE 11 QUESTION 1: RECONCILIATIONS (40 marks; 32 minutes) 1.1 BANK RECONCILIATION REQUIRED: Study the information taken from the accounting records of Sahara Traders and complete the following instructions. 1.1.1 Complete the Bank Account in the General Ledger, by making the necessary entries directly into the Bank Account. NOTE: FOLIOS ARE NOT REQUIRED (16) 1.1.2 Prepare the Bank Reconciliation Statement as at 30 November 2021. (8) 1.1.3 Briefly explain the purpose of doing a bank reconciliation statement. (2) 1.1.4 List TWO internal control measures a business can implement to control cash in the business. (2) INFORMATION: The bookkeeper from Sahara Traders compared the Bank Statement received from FNB during November 2021, with the October 2021 Bank Reconciliation Statement and the Cash Journals for November 2021 and found the following differences: i. The Bank Account in the General Ledger showed an unfavourable provisional balance of R9 228, whilst the Bank Statement showed an unfavourable balance of R16 768 on 30 November 2021. ii. A deposit of R2 190 received on 25 November for sales was entered in the Cash Receipts Journal as R2 910. iii. A debtor, T. Rhino, transferred R1 000 directly into the Bank Account of Sahara Traders in settlement of his account of R1 100. iv. The annual insurance premium in respect of the owner’s personal vehicle was paid by means of a debit order, R1 440. v. Bank charges totalling R80 and interest charged on the debit balance, R60 appeared only on the Bank Statement. vi. An EFT for R5 820 made to pay for trading stock purchased appeared as R5 280 in the relevant journal. Upon investigation it was discovered that the bookkeeper had incorrectly recorded the amount. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 (Paper 2) GRADE 11 vii. A deposit of R4 190 made by S. Cheetah for the office space he rents from Sahara Traders was recorded on the Bank Statement as R4 290. The amount was correctly recorded in the CRJ. viii. The bank has incorrectly debited Sahara Traders account with interest of R7 000 instead of R700. ix. The following information in the November 2021 Cash Journals did not appear on the Bank Statement for November 2021: • Outstanding deposit, R6 000 • EFT 333 for R6 500 for a payment of a creditor, WW Stores 1.2 CREDITORS’ RECONCILIATION A Statement of Account received from a creditor, Green Apple Co. on 31 October 2021, indicates that Fresh Fruit Mart owes them R14 530. According to the Creditors’ Ledger of Fresh Fruit Mart, the amount owing to Green Apple Co. is R13 789. REQUIRED: 1.2.1 Use the table provided in your ANSWER BOOK to RECONCILE the difference between the creditor’s Statement of Account and the Creditors’ Ledger of the business. (8) 1.2.2 An internal auditor of Fresh Fruit Mart discovered that goods to the value of R6 500 ordered from PK Stores were not delivered to the premises of the business. An investigation revealed that the person in charge of placing the orders and receiving goods, ordered the goods for his personal use. a. What action should be taken by the management against this employee? Provide TWO points. (2) b. Provide TWO internal control measures that should be applied to prevent this from happening again. (2) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 (Paper 2) GRADE 11 INFORMATION: After an investigation the following were brought to light: a. An EFT made to Green Apple Co. was not received in time to allow a discount. Fresh Fruit Mart assumed they would receive a R450 discount and had entered it in their books as such. b. Goods to the value of R980 returned to Green Apple Co. was recorded in the Creditors’ Statement as R890. c. An invoice received for goods bought from Green Apples Co. for R700 was incorrectly entered in the Creditors’ Ledger of Fresh Fruit Mart as a debit note. d. The Creditors’ Statement received shows interest on the overdue account of R251. No entry has been made with regards to this transaction in the Creditors’ Ledger of Fresh Fruit Mart. e. The following transactions took place after the Creditors’ Statement was printed and emailed to Fresh Fruit Mart: • An invoice of R3 400 for goods purchased on 29 October 2021 • An EFT of R1 950, made in part payment of the account on 30 October 2021 [40] QUESTION 2: COST ACCOUNTING (40 marks; 32 minutes) 2.1 PURPLE GIRLS FACE MASK MANUFACTURERS REQUIRED: Use the information taken from the accounting records of Purple Girls Face Mask Manufacturers, a business that manufactures reusable scented face masks, to: 2.1.1 Calculate the raw materials issued for production in 2021 (6) 2.1.2 Prepare the following accounts in the General Ledger: a. Factory Overheads Cost (14) b. Work-in-process stock (9) NOTE: FOLIOS ARE NOT REQUIRED. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 (Paper 2) GRADE 11 INFORMATION: A. The following balances appeared in the books of Purple Girls Face Mask Manufacturers: 30 September 01 October 2021 2020 Direct/Raw material stock 25 000 53 000 Work-in-progress stock 76 000 38 000 Indirect material stock 5 500 5 200 B. Transactions for the year: Raw materials purchased during the year 720 000 Carriage on purchases of raw materials 15 400 Factory maintenance paid 68 400 Advertising paid 23 500 Factory rent paid 46 700 Water and electricity paid 78 400 Indirect material purchased 49 000 Sundry expenses paid 12 300 Factory foreman’s salary 85 850 Office assistant’s salary for the year 136 750 C. Additional Information: 1. The total direct labour costs for the year amounted to R847 650. 2. Included in the amount for raw materials are goods that were not ordered therefore returned to the suppliers, R5 000. 3. Water and electricity and rent are to be split between the three departments according to floor space: • Factory 400 square metres • Office 380 square metres • Sales department 220 square metres 4. Depreciation for the year: • Office equipment, R12 500 • Factory machinery, R22 800 5. Sundry expenses must be allocated in the ratio 3 : 2 : 1 for the factory, office and sales department respectively. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 (Paper 2) GRADE 11 2.2 HANDSAN MANUFACTURERS Handsan Manufacturers manufactures hand sanitisers and other hand cleaning products. The business opened in early 2020 after the need for these products became more common. The information below was taken from their records for the financial year ended 28 February 2021. REQUIRED: 2.2.1 Calculate the break-even point for the financial year ended 28 February 2021. (5) 2.2.2 Comment on whether the business should be happy with the break-even point. Quote relevant figures in your comment. (4) 2.2.3 The direct material costs have been well controlled. List ONE possible reason for the reduction in the direct material costs in 2021. (2) INFORMATION: Unit cost Unit cost 2021 2020 Fixed costs 50,00 47,00 Factory overhead cost 36,00 34,00 Administration cost 14,00 13,00 Variable cost 132,00 126,00 Direct labour cost 56,00 51,00 Direct material cost 30, 00 50,00 Selling and distribution cost 46,00 25,00 Number of units produced and sold 24 960 23 600 Selling price per unit R184 R220 Break-even number of units. ?? 11 800 [40] P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 (Paper 2) GRADE 11 QUESTION 3: VAT AND INVENTORY SYSTEMS (30 marks; 24 minutes) 3.1 VAT REQUIRED: 3.1.1 Calculate the amounts marked A – E in the table below. (5) 3.1.2 Explain the difference between Tax Avoidance and Tax Evasion. (4) 3.1.3 Give TWO examples of zero-rated items and TWO examples of VAT exempt items. (4) INFORMATION: You are provided with extracts from the books of Sweet Pea Stores, a registered VAT vendor. Goods are subject to VAT at a rate of 15%. Excluding VAT Including VAT VAT (R) (R) (R) R320 000 A B R2 300 C R345 D E R822 3.2 INVENTORY SYSTEMS: H&H Gifting is a small business owned by Henry Harold. Henry delivers specially hand-picked gifts door to door. During the COVID-19 pandemic, Henry’s business flourished as his business is fully online. Henry uses the Periodic Inventory System. The financial year ends on 31 December 2020. REQUIRED: 3.2.1 Calculate the purchase figure that will be closed off to the Trading Account. (5) 3.2.2 Calculate the sales figure that will be closed off to the Trading Account. (4) 3.2.3 Calculate the Cost of Sales. (4) 3.2.4 Calculate the average rate of stock turnover for 2020. (4) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 (Paper 2) GRADE 11 INFORMATION: A. Extract from the Pre-adjustment Trial Balance on 31 December 2020: Debit Credit Balance sheet account section Trading stock (1 January 2020) 65 200 Nominal account section Sales 295 000 Purchases 250 000 Carriage on purchases 12 560 Debtors’ allowances 15 700 B. No entries have been made for the following transactions: i. Goods costing R2 500 was returned to suppliers before stock taking was done. ii. The owner Henry Harold took goods costing R11 250 for personal use. iii. An invoice totalling R3 250 for stock purchased on credit from Floral Traders. iv. A debtor returned goods sold to him for R12 000. The cost price of the goods was R8 000. These goods were transferred back to stock before stock-take took place. v. The business uses a mark-up of 40% on cost price. vi. The physical stock count done on 31 December 2020 revealed stock on hand is R96 250. [30] P.T.O.

Downloaded from hlayiso.com ACCOUNTING 10 (Paper 2) GRADE 11 QUESTION 4: CASH BUDGETS AND PROJECTED INCOME STATEMENT (40 marks; 32 minutes) 4.1 CONCEPTS State whether the following statements are True or False. Write only True or False next to the question number (4.1.1 – 4.1.5) in the ANSWER BOOK. 4.1.1 Provision for bad debts adjustment is an item that will appear in a Cash Budget but not on the Projected Income Statement. (1) 4.1.2 Depreciation is an imputed expense and therefore does not appear in the Cash Budget. (1) 4.1.3 The main purpose of preparing a Cash Budget is to project future income and expenses. (1) 4.1.4 Payment to creditors is an expense and will therefore appear in the Projected Income Statement. (1) 4.1.5 What makes the Cash Budget and Projected Income Statement similar is that they both project figures for the future. (1) 4.2 CASH BUDGET The information below relates to Tripod Stores. REQUIRED: 4.2.1 Complete the Debtors’ Collection Schedule for June and July 2021. (14) 4.2.2 Complete the Cash Budget for June and July 2021. NOTE: Some information is already in the answer booklet. (21) INFORMATION: A. Expected collection from debtors: • 40% of debtors settle their accounts during the transaction month of sale in order to qualify for the 4% discount offered for prompt payment. • 30% settle their accounts in the month following the transaction month. • 23% settle their accounts in the second month after the transaction month. • 7% are written off as irrecoverable during the third month. P.T.O.

Downloaded from hlayiso.com B. Summary of transactions: Details April May June July (actual) (actual) (budgeted) (budgeted) Total sales 90 000 82 000 100 000 110 000 Credit purchases 70 000 80 000 65 000 85 000 Rent income 16 600 16 600 17 000 ? Salaries 75 000 75 000 75 000 ? 75% of the total sales are on credit Cost of sales is equal to 60% of total sales Credit purchases are 40% of the total purchases C. Creditors are paid in the month following the month of purchase. D. The rental agreement makes provision for an annual increase of 12% commencing on 1 July 2021. E. The following withdrawals are made monthly by the owner: • Cash to pay for his garden services at home, R7 500 • Trading Stock to be used as birthday gifts, R2 800 F. A used vehicle was sold in June for R132 900 to the owner’s best friend. The loss on sale of the asset amounted to R3 000. The EFT will only be made in July 2021. G. A loan, at 11.5% p.a. interest, will be taken out on 1 July 2021. • The loan will be repaid in 36 equal monthly instalments commencing on 30 July 2021. • Interest on the loan is also payable at the end of each month commencing on 30 July 2021. Interest is not capitalised. (Show calculations in brackets) H. Advertising is calculated at 1% of the previous month’s total sales. I. All employees will receive a salary increase of 4% at the end of July 2021. J. The bank account showed a favourable balance of R140 530 on 31 May 2021. [40] TOTAL: 150 END

Downloaded from hlayiso.com ACCOUNTING 12 PAPER 1 GRADE 11 FORMULA SHEET Gross profit 100 Gross profit 100 Net profit 100 x x x Sales 1 Cost of Sales 1 Sales 1 Operating Expenses 100 Operating Profit 100 x x Sales 1 Sales 1 Total Earnings by Partner 100 Net Profit 100 x x Average Partners' Equity 1 Average Partners' Equity 1 Current Assets: Current Liabilities Current Assets – Inventories: Current Liabilities Average Debtors 365 12 Average Creditors 365 12 x or x or Credit Sales 1 1 Credit Purchases or Cost of Sales 1 1 Average Inventorie s 365 12 Cost of Sales x or Cost of Sales 1 1 Average Inventorie s Non-Current Liabilities : Partners’ Equity Total Assets: Total Liabilities