GR11 Accounting Practice exam November Paper 2

Study & Master Support Pack | Grade 11 CAPS Accounting Exemplar examination: November (Paper 2) 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 2). 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: 2.5 hours PAPER 2 EXAMINATION Marks: 150 QUESTION TOPIC MARKS MINUTES 1 Bank reconciliation 37 30 minutes 2 Inventory systems 34 27 minutes 3 Budgets and VAT 39 31 minutes 4 Manufacturing and cost accounting 40 32 minutes 150 QUESTION 1 [37 marks; 30 minutes] BANK RECONCILIATION You are provided with information relating to Crouse Traders. Study the Bank Reconciliation Statement of January 2023, together with the bank statement and journals of February 2023, as well as the additional information. REQUIRED 1.1 Calculate the correct totals for the Cash Receipts Journal and Cash Payments Journal for February 2023. (16) 1.2 Calculate the correct balance of the bank account, according to the General Ledger on 28 February 2023. (4) 1.3 Prepare the Bank Reconciliation Statement on 28 February 2023. (13) 1.4 Why will the auditor be interested to see that the Bank Reconciliation Statement is prepared every month? (2) 1.5 What audit evidence can the auditor obtain to verify that cheque 667 to Xoseka & Co has actually been issued to them? (2) INFORMATION 1. At the end of the previous month, 31 January 2023, the following items appeared in the Bank Reconciliation Statement: Debit balance per bank statement R5 037 Outstanding deposits: 31 January 2023 R12 450 Outstanding cheques: 431 (dated 3 August 2022) R2 100 553 (dated 21 December 2022) R3 022 655 (dated 29 January 2023) R4 650 662 (dated 3 February 2023) R3 490 Credit balance as per bank account R5 849 1

2. The following Cash Journals were prepared by the bookkeeper of Crouse Traders for the month of February 2023. CASH RECEIPTS JOURNAL Analysis of Sundry accounts Doc no. Day Detail Bank Sales Debtors control receipts Amount Detail EFT 4 C Rheeder 3 256 3 256 CRR 8 Sales 34 100 34 100 R65 A Esterhuyse 2 400 36 500 2 400 CRR 11 Sales 12 870 12 870 12 870 CRR 22 Sales 18 670 18 670 18 670 R66 28 M Botha 3 400 3 400 CRR Sales 14 210 17 610 14 210 88 906 CASH PAYMENTS JOURNAL Sundry accounts Doc no. Day Detail Bank Trading stock Stationery Amount Detail 663 2 Waltons 989 989 664 6 Garcia Suppliers 20 230 20 230 665 11 Telkom 2 098 2 098 Telephone 666 19 Kota Ltd 24 665 24 665 667 23 Xoseka & Co 6 500 6 500 Equipment 668 26 KL Properties 4 600 4 600 Rent expense 59 082 3. The following bank statement was downloaded by Crouse Traders on 28/2/2023: Statement: Crouse Traders YY-MM-DD Transaction description Payments Deposits Balance 2023-01-31 Statement opening balance –R5 037 2023-01-31 Deposit R12 450 2023-02-02 Cheque 553 R3 022 2023-02-03 Cheque 663 R898 2023-02-04 EFT: C Rheeder R3 256 2023-02-07 Cheque 664 R20 230 2023-02-08 Deposit R36 500 2023-02-10 Cheque dishonoured: A Esterhuyse R2 400 2023-02-11 Stop order: Paarl Municipality R 1 890 2023-02-11 Deposit R12 870 2023-02-12 Cheque 665 R2 098 2023-02-20 Cheque 666 R24 665 2023-02-21 Service fees R157 2023-02-22 Deposit R18 670 2023-02-24 EFT: R Pienaar – invoice 211 R686 2023-02-26 Interest R102 2023-02-27 Cheque 668 R4 600 2023-02-27 Statement closing balance R19 333 4. Additional information 2

• Cheque 431 for R2 100 was issued to the Paarlberg Tennis Club as a donation. The club has, however, been disbanded. • Cheque 655 for R4 650 was issued to CJ Motors for repairs done to the delivery vehicles. The cheque got lost in the post and should be cancelled. A new cheque should be issued, no. 669. • On investigation it was discovered that the bank had incorrectly recorded the amount of cheque 663. The bank has been notified. • The EFT (Electronic Funds Tranfer) received from R Pienaar on 24 February 2023 was in payment of an account. QUESTION 2 [34 marks; 27 minutes] INVENTORY SYSTEMS Fables Bookstore, with owner Nicky Groenewald, buys and sells books and statio- nery. They use the periodic inventory system. REQUIRED 2.1 Prepare the Trading Account for the year ended 30 June 2023, in order to calculate the gross profit for the year. (show calculations in brackets)(14) 2.2 Determine the mark-up percentage on cost price achieved by the business for the year ended 30 June 2023. (3) 2.3 Determine the average month’s stock on hand for the year ended 30 June 2023. (5) 2.4 List TWO possible reasons, besides the situation mentioned in 2.6, for the business not achieving its mark-up percentage of 60%. (4) 2.5 List ONE reason why the business should not have too much stock on hand, and ONE reason why the business should not have too little stock on hand.(4) 2.6 The auditor discovered that the employee responsible for ordering stock, orders stock for himself, but the business ends up paying for it. What internal control measures over stock can be put in place to prevent situations like this? List TWO.  (4) INFORMATION 1. The following balances were extracted from the accounting records on 30 June 2023, the end of the financial year. Trading stock (1 July 2022) R45 600 Sales R444 120 Debtors allowances R2 390 Purchases R271 350 Carriage on purchases R12 340 2. Additional information 2.1 The following transaction, which took place on 29 June 2023, was not recorded in the books: • Goods taken by the owner for private use, R1 300. • Goods returned by a debtor, J van der Merwe, R970 (selling price). • Invoice received for goods purchased from Bezuidenhout Traders: Merchandise R4 670 Carriage R290 3

2.2 Trading stock donated to the local Children’s Home was recorded in the books as credit sales of R4 224. The cost price of these goods was R2 640. Correct the error. 2.3 Stocktaking on 30 June 2023 reflected Trading Stock on hand as R33 210. QUESTION 3 [39 marks; 31 minutes] BUDGETS AND VAT You are provided with the Debtors Collection Schedule and an extract from the Cash Budget of Smith Traders for the three months ending 31 March 2014. The owner is Samantha Smith. REQUIRED 3.1 Complete the following sentences by filling in the missing word(s). Write only the word(s) next to the question number (4.1.1 – 4.1.3) in the ANSWER BOOK. 3.1.1 The main purpose of preparing the Cash Budget is …. (2) 3.1.2 ONE item in the Cash Budget that will not be reflected in the Projected Statement of Comprehensive Income (Projected Income Statement) is …. (2) 3.1.3 ONE item that will appear in a Projected Statement of Comprehensive Income (Projected Income Statement) but not in a Cash Budget is …. (2) 3.2 Refer to information 1 to 8 below. Calculate the missing figures in the Debtors’ Collection Schedule and the Cash Budget indicated by A to L. (23) 3.3 In order to increase sales and the number of customers, Samantha intends to advertise that credit limits for all credit customers will be increased to R30 000 and that new customers are welcome to open accounts during April. Do you agree with Samantha? Give a reason for the answer. (3) INFORMATION 1. Sales • Total sales 2014 January February March 570 000 399 000 342 000 • 60% of sales are on credit, the rest are for cash. 2. Purchases 2014 January February March 285 000 199 500 171 000 • 20% of all purchases are for cash, the rest are on credit. • Creditors are paid two months after the purchase of stock. 3. Debtors’ Collection The credit limit for each debtor is R20 000. In the past, debtors have settled their accounts as follows. Smith Traders prepares its budget on this basis: • 20% of debtors settle accounts in the month of the sale to receive a 5% discount. • 30% settle in the first month following the sales month (30 days). • 40% settle in the second month (60 days). • 10% are written off in the third month. 4

4. Debtors’ Collection Schedule 2014 Credit sales January February March Actual November 393 300 157 320 December 547 200 164 160 218 880 Expected January 342 000 64 980 102 600 B February 239 400 45 486 C March A D 386 460 366 966 E 5. Extract from the Cash Budget 2014 January February March RECEIPTS Cash sales 228 000 F 136 800 Receipts from debtors 386 460 366 966 E Loan from AB Bank (12% p.a.) 320 000 PAYMENTS Cash purchases 57 000 39 900 G Payment to creditors 262 200 364 800 H Interest on loan 3 200 I Repayment of loan 32 000 32 000 Wages 32 500 22 256 J Advertising 6 400 K K Payment to SARS for VAT 95 130 - L 6. Loan and interest on loan The interest on the loan and the monthly loan instalments are payable at the end of each month. Interest is not capitalised. 7. Wages In January the business will have five employees, each earning a wage of R1 300 per week. All the employees are paid their wages on Fridays. There are five Fridays in January and four Fridays in February and March 2014. One employee will resign on 31 January 2014 and the other employees will be given a 7% increase on that date. The business plans to employ two more staff members at the same weekly wage as the others on 1 March 2014. 8. Advertising The advertising budget will be increased by 9% with effect from 1 February 2014. 9. Payment to SARS with regards to VAT The business is a registered VAT vendor and falls in Category A. VAT is paid over to SARS every second month on the uneven months on the seventh day of the month. The following information was provided with regards to VAT: 2014 January February March OUTPUT VAT collected 70 000 49 000 42 000 INPUT VAT paid 35 800 25 100 21 900 5

QUESTION 4 [40 marks; 32 minutes] MANUFACTURING 4.1 COST ACCOUNTS Choose a category from COLUMN B that matches a description in COLUMN A. Write only the letter (A-D) next to the question number (6.1.1-6.1.4) in the AN- SWER BOOK. One letter can be used more than once. (4) COLUMN A COLUMN B 4.1.1 Advertising expenses A Direct material cost 4.1.2 Office telephone account B Direct labour cost 4.1.3 Bad debts C Factory overhead cost 4.1.4 Salary of the factory foreman D Administration cost E Selling and distribution cost 4.2 LEDGER ACCOUNTS You are provided with information relating to ZOOP Bag manufacturers. The infor- mation was extracted from the accounting records on 28 February 2013, the end of the financial year. REQUIRED 4.2.1 Prepare the Raw Material Stock account in the General Ledger. Balance the account on 28 February 2013. (6) 4.2.2 Calculate the factory overhead cost for the year. (9) 4.2.3 Prepare the Work-in-Process Stock account in the General Ledger. Balance the account on 28 February 2013. (9) 4.2.4 Calculate the Cost of Sales for the year ended 28 February 2013. (4) INFORMATION Balances at the end of the financial year 2012 2013 Raw material stock 21 300 15 600 Work-in-Process stock 13 100 18 200 Finished goods stock 21 100 23 400 Indirect material stock 2 900 2 350 Summary of transactions for the year ended 28 February 2013 R Raw materials bought on credit 321 000 Raw materials bought cash 98 700 Wages of direct labourers 420 000 Salary – factory foreman 68 000 Salary of receptionist 120 000 Motor vehicle expenses (to be shared between factory and selling and distribution cost in the ratio 1:1) 42 000 Water and electricity (to be shared between factory and administration in the ratio 4:1) 36 000 Indirect materials bought during the year 17 600 Sundry factory expenses 45 200 6

4.3 BREAKEVEN ANALYSIS Bella Litchfield makes fabric stationery bags which she sells to learners. REQUIRED 4.3.1 Calculate the number of units that Bella needed to produce in order to break even in 2013. (5) 4.3.2 Comment on the number of bags she is producing. Quote figures and refer to the breakeven calculation in your answer. (3) INFORMATION 1. During the year, 10 288 units were produced and sold. 2. The selling price per unit was R24. 3. Variable and fixed costs. 2013 2012 Variable costs: TOTAL PER UNIT PER UNIT Direct material R102 880 R8,00 R10,00 Direct labour R82 304 R6,40 R5,60 Selling and distribution R41 152 R3,20 R3,00 R226 336 R17,60 R18,60 Fixed costs: Factory overheads R61 728 R4,80 Administration cost R15 432 R1,20 R77 160 R6,00 7