GR11 Accounting Practice exam November Paper 1

Study & Master Support Pack | Grade 11 CAPS Accounting Exemplar examination: November (Paper 1) This revision pack for Accounting Grade 11 provides support for learners revising the most important concepts and principles covered in the CAPS curriculum, by providing practice exams. This pack offers a sample of the November examination (Paper 1). You have permission to print or photocopy this document, and to distribute it electronically via email or WhatsApp. For more information on our Study & Master CAPS-approved  textbooks and valuable resource materials, visit www.cambridge.org Brighter Thinking | Better Learning i

Grade 11 NOVEMBER Time: 2 hours PAPER 1 EXAMINATION Marks: 150 QUESTION TOPIC MARKS MINUTES 1 Financial statements of a partnership – 68 54 minutes Statement of Comprehensive Income (Income Statement) 2 Analysis of statements 28 22 minutes 3 Fixed assets 17 14 minutes 4 Statement of Financial Position (Balance Sheet) 37 30 minutes 150 QUESTION 1 [68 marks; 54 minutes] PARTNERSHIP: FINANCIAL STATEMENTS 1.1 CONCEPTS Give ONE word/term for each of the following descriptions by choosing a word/ term from the list below. Write only the word/term next to the question number (1.1.1-1.1.4) in the ANSWER BOOK. (4) current asset; non-current asset; current liability; non-current liability; materiality concept; matching concept; income; expense 1.1.1 Profit on the sale of an asset is a/an ……………… 1.1.2 The portion of the loan that will have to be repaid within a year is a/an ………….. 1.1.3 Consumable stores on hand is a/an…………………….. 1.1.4 The GAAP principle applied when showing interest on bank overdraft as a separate item than bank charges in the Statement of Comprehensive Income (Income Statement) is called the ……………………….. 1.2 FINANCIAL STATEMENTS You are provided with information relating to Rawsonville Hardware. This business has two partners, Tharine du Toit and Mercia Smith. The financial year ends on 28 February and they use the perpetual inventory system. REQUIRED 1.2.1 The account for Trading Stock in the General Ledger of Rawsonville Hardware.(9) 1.2.2 Prepare the Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2023. (40) 1.2.3 Prepare the following notes to the Statement of Financial Position (Balance Sheet) on 28 February 2023: 1.2.3.1 Trade and other receivables (7) 1.2.3.2 Trade and other payables (8) 1

INFORMATION RAWSONVILLE HARDWARE PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2023 Debit Credit Balance Sheet account section Capital: Du Toit 280 000 Capital: Smith 250 000 Current account: Du Toit 8 610 Current account: Smith 1080 Drawings: Du Toit 141 000 Drawings: Smith 138 000 Fixed deposit: XY Bank ? Vehicles 200 000 Equipment 56 000 Accumulated depreciation on vehicles 75 000 Accumulated depreciation on equipment 23 100 Trading stock 352 800 Debtors control 35 600 Provision for bad debts 1 086 Bank 21 996 Cash float 1 200 Creditors control 45 170 Nominal accounts section Sales 1 797 600 Cost of sales 1 027 200 Debtors allowances 9 860 Insurance 10 560 Discount allowed 1 990 Rent expense 59 700 Advertisements 10 800 Stationery 3 490 Interest on fixed deposit ? Salaries and wages 324 000 UIF contribution 3 240 Bad debts 5 670 Bad debts recovered 1 340 Water and electricity 17 724 Telephone 12 336 Discount received 2 340 2 475 496 2 475 496 ADJUSTMENTS AND ADDITIONAL INFORMATION A Rent expense is paid one month in advance. The rent increased with R400 on 1 January 2023. B On 1 January 2023, an amount of R720 was paid for the placement of an advertisement for the first term of the year (3 months). C One of the partners, T du Toit, took trading stock with a cost price of R1 300 for personal use. No entry was made of this. D On 27 February 2023 a debtor, N Pretorius, returned goods with a selling price of R1 575. The business uses a mark-up of 75% on the cost price of goods. No entry was made of this. 2

E No entries have been made with regard to stock stolen on 3 February 2023. The insurance company has informed Rawsonville Hardware that they have transferred R9 600 into the business’s bank account in respect of the insurance claim. Rawsonville Hardware bears 20% of the stock loss. F On 28 February 2023 a physical stocktaking was done. It showed the following on hand: Trading stock R339 840 Stationery R480 G The following statement was received from XY bank with regard to the fixed deposit: Balance at the beginning of the financial year R50 000 Interest capitalised ?? Balance at the end of the year R53 250 H An employee has not been paid his salary for February 2023. The salary details are as follows: Gross salary R6 000 PAYE R1 080 UIF R60 Medical Aid R760 The business contributes 1% of the gross salary towards the UIF. I Several debtors had long overdue accounts. The partners decided to write off accounts totalling R3 425. J The provision for bad debts must be adjusted to 3% of outstanding debts. K The following accounts were still payable on 28 February 2023: Water and electricity R1098 Telephone R662 L Depreciation should be taken into account as follows: • On vehicles, R30 000 • On equipment, R2 940 QUESTION 2 [28 marks; 22 minutes] ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS You are provided with information obtained from the financial statements of BG Traders. The business is owned by partners G Bestbier and H Griessel. REQUIRED 2.1 Calculate the following financial indicators for 2023: 2.1.1 Current ratio (3) 2.1.2 Debt/Equity ratio (3) 2.1.3 Percentage return earned by Griessel on her average equity. (4) 2.2 Should the partners be satisfied with the control over operating expenses? Briefly explain your answer by quoting percentages. (3) 2.3 Comment on the liquidity position of the business on 28 February 2023. Quote ratio’s, percentages or figures to support your answer. (6) 2.4 Bestbier feels that Griessel’s drawings are unreasonable. Quote figures to support this opinion. How does this affect the business? (4) 3

2.5 The business urgently needs a delivery vehicle, which is expected to cost R300 000. In your opinion, how should the business finance the cost of the vehicle? Give a reason for your answer. (5) INFORMATION Extract from the Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2023 with comparative figures: 2023 2022 R R Sales 1 118 250 946 200 Cost of sales 639 000 570 000 Extract from the Appropriation Statement for the year ended 28 February 2023: • Net profit for the year, R228 000 • Total amount earned by Griessel, R154 500 • Total amount earned by Bestbier, R73 500 Extract from the Statement of Financial Position (Balance Sheet) on 28 February 2023, with comparative figures: 2023 2022 R R Fixed assets (carrying value) 572 685 506 280 Investments (9% p.a.) 210 000 45 000 Current assets 170 340 181 575 TOTAL ASSETS 953 025 732 855 Owners’ equity 710 565 489 225 Capital: Griessel 412 500 300 000 Capital: Bestbier 300 000 187 500 Current account: Griessel (dr) 37 035 (cr) 3 525 Current account: Bestbier (cr) 35 100 (cr) 1 800 Non-current liabilities (13% p.a.) 142 260 171 000 Current liabilities 100 200 72 630 TOTAL EQUITY AND LIABILITIES 953 025 732 855 Financial indicators calculated on 28 February 2023, with comparative figures: 2023 2022 Gross profit on cost of sales 75,0% 65,0% Operating expenses on sales 21,0% 23,2% Operating profit on sales 22.8% 19,5% Current ratio ? 2,5 : 1 Acid-test ratio 0,6 : 1 0,8 : 1 Stock-turnover rate 6 times 4,5 times Debtor collection period 30 days 45 days Creditors’ payment period 60 days 60 days Debt/Equity ratio ? 0,35 : 1 Total assets to total liabilities 3,9 : 1 3,0 : 1 % return on average equity 38,0% 33,2% % return earned by Griessel ? 34,4% % return earned by Bestbier 28,2% 33,0% 4

QUESTION 3 [17 marks; 14 minutes] FIXED ASSETS You are provided with details of the fixed assets of Brandt & Co. The financial year ends 30 September. REQUIRED 3.1 Prepare the Asset Disposal Account for the computer sold on 31 July 2023. (8) 3.2 Calculate the missing figures indicated by A, B and C in the Fixed Assets note below. (9) INFORMATION 1. NOTE FOR FIXED ASSETS Vehicles Equipment Carrying value on 1 October 2022 82 800 34 600 Cost price 180 000 56 000 Accumulated depreciation (97 200) (21 400) Movements Additions at cost price 240 000 - Disposals at carrying value - A Depreciation (39 420) B Carrying value on 30 September 2023 283 380 Cost price 420 000 47 000 Accumulated depreciation (136 620) C 2. A computer (equipment) was sold for R1 000 cash on 31 July 2023. FIXED ASSETS REGISTER Item: ASUS S300 Laptop Cost: R9 000 Date purchased: 1 April 2021 Depreciation: 20% per annum on cost Depreciation Accumulated Carrying depreciation value 30 September 2021 900 900 8 100 30 September 2022 1 800 2 700 6 300 31 July 2023 ? ? ? QUESTION 4 [37 marks; 30 minutes] PARTNERSHIP: STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) You are provided with information from the records of HarGro Traders. The financial year-end is 28 February 2018. REQUIRED 4.1 Prepare the following notes to the Statement of Financial Position (Balance Sheet): Current accounts (a total column is not required) (14) 4.2 Prepare the Statement of Financial Position (Balance Sheet) on 28 February 2018. Where notes are not required, show ALL workings in brackets. (23) 5

INFORMATION The following amounts were extracted from the records: 28 Feb 2018 28 Feb 2017 Capital: N Hardisty 700 000 620 000 Capital: M Grové 700 000 750 000 Current account: N Hardisty ? 5 415 (dr) Current account: M Grové ? 8 740 (cr) Fixed assets (carrying value) 1 309 600 Fixed deposit: AB Bank 90 000 Loan: XY Bank ? Inventory 156 400 Debtors control 36 900 Provision for bad debts 1 845 Creditors control 72 630 Bank 135 485 Petty cash 500 Income received in advance 2 800 Accrued expenses 6 320 Prepaid expenses 3 700 ADDITIONAL INFORMATION A N Hardisty increased her capital with R80 000 on 31 August 2017. M Grové decreased her capital with R50 000 on 31 August 2017. B The partnership agreement stipulates the following: • N Hardisty earns a salary of R240 000 per annum and M Grové earns 15% more than Hardisty. • The partners earn interest on capital of 12% p.a. Note the change in capital during the year (see information A). • Remaining profits are shared between Hardisty and Grové in the ratio 3:2 respectively. The remaining profit earned by Grové after all adjustments and after the internal audit was calculated to be R32 600. C N Hardisty withdrew 95% of her earnings for the 2018 financial year. M Grové managed her withdrawals from the business in such a way, as to still have a positive balance in her current account of R20 000 on 28 February 2018. D There are two fixed deposits at AB Bank. One of these fixed deposits of R40 000 matures on 30 June 2018. E Information from the loan statement from XY Bank for the financial year ended 28 February 2018: Balance of the loan on 1 March 2017 250 000 Interest capitalised 28 500 Repayments made during the year 62 500 Balance of the loan on 28 February 2018 ? During the next 12 months, the capital amount of the mortgage loan will decrease by R30 000. 6