Accounting Grade 11 P1 Gauteng June 2023 QP (Eng)

Downloaded from hlayiso.com PROVINCIAL EXAMINATION JUNE 2023 GRADE 11 ACCOUNTING PAPER 1 TIME: 2 hours MARKS: 150 11 pages + 1 formula sheet and an answer book of 8 pages P.T.O.

Downloaded from hlayiso.com ACCOUNTING 2 PAPER 1 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 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. Accounting Equation 15 10 minutes 2. Partnerships: Ledger Accounts 25 17 minutes 3. Statement of Comprehensive Income 45 40 minutes (Income Statement) 4. Concepts and Statement of Financial 40 35 minutes Position (Balance Sheet) 5. Financial Indicators 25 18 minutes TOTAL 150 120 minutes P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 PAPER 1 GRADE 11 QUESTION 1: ACCOUNTING EQUATION (15 marks; 10 minutes) REQUIRED: Analyse the following transactions and show the effect on the Accounting Equation. (15) Take note that the bank balance remains favourable at all times. 1.1 A partner, A. Matome, increased his capital contribution from R966 000 to R1 222 000. 1.2 The business purchased merchandise from Kgomotso Traders worth R250 000 using an EFT. 1.3 The business received an invoice from Nadeela Stores for stationery bought on credit, R6 700. 1.4 Sold goods on credit for R300 000. The business uses a profit mark-up of 50%. 1.5 Paid R89 000 to Tummy Bank for repayment of loan. 15 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 PAPER 1 GRADE 11 QUESTION 2: PARTNERSHIPS (25 marks; 17 minutes) REQUIRED: 2.1 Calculate the interest on capital for Martin Nike. (5) 2.2 Prepare the Current Account Note for Marronnie Fashions. (20) INFORMATION: A. Extract from the Pre-adjustment Trial Balance of Marronnie Fashions on 28 February 2023: Balance Sheet Section Debit Credit Capital: Martin Nike (1 March 2022) 1 600 000 Capital: Ronnie Jordan (1 March 2022) 800 000 Drawings: Martin Nike 442 800 Drawings: Ronnie Jordan 213 200 Current Account: Martin Nike (1 March 2022) 21 600 Current Account: Ronnie Jordan (1 March 2022) 30 800 B. The net profit for the year amounted to R1 180 400. C. The partnership agreement stipulates the following:  At the beginning of the financial year, Martin Nike is entitled to a monthly salary of R16 000 and Ronnie Jordan earns 25% more than Martin Nike. Their salaries were increased by 10% with effect from 1 August 2022.  Ronnie Jordan receives half of his monthly salary, AFTER the salary increase, as a bonus.  The partners received interest on their capital balances at a rate of 6% p.a. at the beginning of the year. The interest rate was increased by 2% with effect from 1 December 2022.  Capital balances did not change during the year.  The remaining profit or losses are to be shared in the same ratio as their capital contributions. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 PAPER 1 GRADE 11 QUESTION 3: INCOME STATEMENT (45 marks; 40 minutes) The following information was taken from the books of Ahmed Traders on 28 February 2023, the last day of their financial year. The business uses a mark-up of 100% on cost. REQUIRED: 3.1 Prepare the Income Statement (Statement of Comprehensive Income) of Ahmed Traders for the year ending 28 February 2023. (40) 3.2 Prepare the Note for Trade and other receivables. (5) INFORMATION: A. Extract from the pre-adjustment trial balance at 28 February 2023: Debit Credit Land and buildings 1 100 000 Vehicles (cost price) 1 800 000 Equipment (cost price) 312 500 Accumulated depreciation on vehicles (1 March 2022) 495 500 Accumulated depreciation on equipment (1 March 2022) 62 250 Loan: Mzanzi Bank (8% p.a.) ? Creditors' control 148 600 Trading stock 371 900 Debtors' control 178 400 Provision for bad debts 17 000 Bank 179 950 Cash float 10 00 Petty cash 750 Sales ? Cost of sales 1 757 000 Discount allowed 13 350 Water and electricity 68 950 Insurance 162 500 Telephone 61 950 Discount received 19 600 Rent income 89 650 Donations 42 650 Stationery 128 150 Bad debts 30 600 Bank charges 8 000 Advertising 139 050 Sundry expenses ? Bad debts recovered 9 000 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 PAPER 1 GRADE 11 B. ADDITIONAL INFORMATION: 1. Goods with a cost price of R19 000 before stocktaking, were donated to a local community that was affected by floods. No entries have been made. 2. The owner took stationery for his son’s use. The bookkeeper made the following entry: Debit – Drawings R2 500 Credit – Trading Stock R2 500 3. A physical stocktake on 28 February shows the following items on hand:  Trading stock, R326 600  Stationery, R2 100 4. A debtor, A. Hajaat, was declared insolvent. Her estate paid 25 cents in every rand. The business received an EFT of R9 000. This transaction was not recorded. The rest of her outstanding balance must still be written-off. 5. A storeroom was rented out from 1 June 2022 at R11 000 per month. The rent was increased by 7,5% per month on 1 December 2022. Provide for the outstanding rent. 6. Loan Statement: Balance on 1 March 2022 800 000 Repayments (R16 000 per month, including interest) ? Interest capitalised ? Balance on 28 February 2023 691 000 7. Depreciation is calculated as follows:  Vehicles: R161 250  Equipment: R33 040 8. The Bank Statement revealed the following items that have not been recorded in the relevant Cash Journals:  EFT of R2 000 from H. Omar, a debtor, who was previously written-off.  Service fees, R365  Credit card levy, R140  ATM deposit fees, R225  Interest on favourable balance, R780 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 PAPER 1 GRADE 11 9. The business entered into an advertising contract with Micky Advertising Group. An annual premium of R64 800 for the period ending 31 July 2023 was paid in full on 1 August 2022. 10. The telephone account for February 2023 was received with the cost of R1 800. The amount will be settled on 3 March 2023. 11. Provision for bad debts was increased to R17 600. 12. Operating profit is calculated at 20% of the sales. 45 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 PAPER 1 GRADE 11 QUESTION 4: CONCEPTS AND STATEMENT OF FINANCIAL POSITION (40 marks; 35 minutes) MacDee Traders is a partnership business, with partners Mahlatse Dingwane and Dimpho Hlatshwayo. They have requested you to assist them with the preparation of financial statements as at 31 May 2023. REQUIRED: 4.1 Complete the Capital Note. (5) 4.2 Prepare the Statement of Financial Position (Balance Sheet) as at 31 May 2023. (35) INFORMATION: A. Capital balances on 31 May 2023:  Mahlatse Dingwane R2 500 000  Dimpho Hlatshwayo R3 880 000 Note:  Mahlatse Dingwane decreased his capital by R500 000. This transaction was recorded.  Dimpho Hlatshwayo increased her capital by R220 000. This transaction was not recorded. B. The total of the Current Account balances is R400 000 (after all relevant adjustments have been taken into account). C. The loan statement received from Tswane Bank reflected the following: Balance on 1 June 2022 7 320 000 Interest on capital (Capitalised) 376 800 Repayments of R50 400 per month (loan plus interest) 604 800 Capital repayments are expected to remain the same over the next financial year. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 PAPER 1 GRADE 11 The following balances were extracted from the Pre-Adjustment Trial Balance on 31 May 2023: Tangible assets at carrying value 14 112 000 Creditors' control 1 120 000 Trade and other receivables 959 000 Inventories 600 000 Consumable stores on hand 92 000 Bank overdraft ? Cash float and petty cash 32 000 E. R22 000, which is one-third of the fixed deposit, matures on 31 August 2022. F. Water and electricity for R3 600 is still outstanding. G. Rent for June 2023 was received in advance. The total amount of rent received was R260 000. H. An employee’s salary was omitted from the Salary Journal on May 2023. Payments for all the contributions were not made. The details are as follows: Gross salary Employee’s deductions Net salary R30 000 R3 750 R26 250 UIF is 1% of the gross salary. The business contributes to UIF on a rand-for- rand basis and R1 600 towards the employee’s medical aid. 40 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 10 PAPER 1 GRADE 11 QUESTION 5: FINANCIAL INDICATORS (25 marks; 18 minutes) 5.1 TRUE AND FALSE (4) Indicate whether the following statements are TRUE or FALSE. Write only the word 'True' or 'False' next to the question number (5.1.1 to 5.1.4) in the ANSWER BOOK. 5.1.1 Liquidity refers to the ability of the business to pay its long-term debts. 5.1.2 Efficiency is the effective management of expenses. 5.1.3 Solvency ratio is calculated as total assets to current liabilities. 5.1.4 Acid-test ratio is also known as quick ratio. 5.2 THABETH TRADERS (21) You are provided with information regarding Thabeth Traders for the year ended 31 May 2023. The partners are Thabo and Bethina. REQUIRED: 5.2.1 Calculate the following for 2023: (a) Acid-test ratio (3) (b) Debt/Equity ratio (3) (c) Percentage return on average equity (5) 5.2.2 Comment on the liquidity of the business. Motivate your answer by quoting any ONE financial indicator, with figures. (3) 5.2.3 Should the partners be satisfied with their investment in the business? Explain and quote figures to motivate your answer. (3) 5.2.4 Thabo is suggesting they should expand the business. Do you agree with his decision of obtaining an additional loan? Explain by citing ONE financial indicator, with figures. (4) P.T.O.

Downloaded from hlayiso.com INFORMATION: A Financial Indicators 2023 2022 Percentage profit mark-up Current ratio 2,19 : 1 1,5 : 1 Acid-test ratio ? 0,8 : 1 Stock turnover rate 24 times 19 times Debt/Equity ratio ? 1:1 Solvency ratio 0,8 : 1 1,3 : 1 Interest on Fixed Deposit (Tala Bank) 15% 12% B Figures from the Financial statements 2023 2022 Partners’ equity 995 100 803 000 Capital: Thabo 600 000 500 000 Capital: Bethina 300 000 250 000 Current Account: Thabo 54 550 Cr 28 500 Cr Current Account: Bethina 40 550 Cr 24 500 Cr Current assets 340 000 315 000 Trading stock 95 000 100 000 Trade debtors 65 000 90 000 Cash and cash equivalents 180 000 125 000 Trade creditors 155 000 140 000 Loan: Yan Bank (16% p.a.) 700 000 900 000 Sales for the year (35% on credit) 3 200 000 2 500 000 Cost of sales 2 450 000 1 850 000 Net profit 285 000 230 000 25 TOTAL: 150 END

Downloaded from hlayiso.com ACCOUNTING 12 PAPER 1 GRADE 11 FORMULA SHEET Gross profit 100 Gross profit 100 Net profit 100    Sales 1 Cost of sales 1 Sales 1 Operating expenses 100 Operating profit 100   Sales 1 Sales 1 Total earnings by partner 100 Net profit 100   Average partners' equity 1 Average partners' equity 1 Current Assets: Current Liabilities Current Assets – Inventories: Current Liabilities Trade and other receivables + Cash and cash equivalents: Current Liabilities Average debtors 365 12 Average creditors 365 12  or  or Credit sales 1 1 Credit purchases or Cost of sales 1 1 Average inventorie s 365 12 Cost of sales  or Cost of sales 1 1 Average inventorie s Non-current Liabilities: Partners’ equity Total assets: Total liabilities