Accounting Grade 11 P2 Gauteng June 2023 QP (Eng)

Downloaded from hlayiso.com PROVINCIAL EXAMINATION JUNE 2023 GRADE 11 ACCOUNTING PAPER 2 TIME: 2 hours MARKS: 150 10 pages + 1 formula sheet and an answer book of 11 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 ALL questions are to be answered. 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 black/blue 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. Bank Reconciliation 40 32 minutes 2. Creditors’ Reconciliation 25 20 minutes 3. Fixed Assets and Asset 55 44 minutes Disposal 4. Financial Indicators 30 24 minutes TOTAL 150 120 minutes P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 PAPER 2 GRADE 11 QUESTION 1: BANK RECONCILIATION (40 marks; 32 minutes) 1.1 TRUE AND FALSE 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. 1.1.1 Cash withdrawal fee and interest on overdraft on a Bank Statement are recorded as bank charges in the Cash Payments Journal. (1) 1.1.2 It is not necessary to prepare a Bank Reconciliation Statement because the bank statement will always provide the correct bank balance. (1) 1.1.3 The document received by a customer who has purchased goods on credit is called a receipt. (1) 1.1.4 A credit balance on the Bank Statement represents a favourable balance for the business. (1) 1.1.5 When a business returns goods to a creditor, the goods are accompanied by a credit note. (1) 1.2 BANK RECONCILIATION REQUIRED: Use the information taken from the accounting records of Zulu Stores for June 2023 to: 1.2.1 Update the CRJ and CPJ totals in the table provided. (14) 1.2.2 Calculate the correct bank account balance in the General Ledger on 30 June 2023. Show ALL workings. (5) 1.2.3 Prepare the Bank Reconciliation Statement as at 30 June 2023. (12) 1.2.4 Refer to INFORMATION J: Deposit of R12 700 on 20 June 2023. Explain why the accountant should be concerned about this deposit. Provide TWO points. (4) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 PAPER 2 GRADE 11 INFORMATION: The bookkeeper from Zulu Stores compared the Bank Statement received from Kings Bank during June 2023 with their May 2023 Bank Reconciliation Statement and the Cash Journals for June 2023 and found the following differences: A. The Bank Account in the General Ledger reflected a debit balance of R21 800 on 1 June 2023. B. Before inspecting the June Bank Statement, the provisional totals in the June 2023 Cash Journals were: CRJ: R116 400 and CPJ: R132 500. C. Bank charges of R1 150 and interest on a debit balance of R230 appeared on the June 2023 Bank Statement but not in the relevant Cash Journal/s. D. EFT received from a debtor was correctly reflected as R5 300 on the Bank Statement for June 2023, but was incorrectly recorded as R3 500 in the relevant Cash Journal. E. A deposit of R2 190 received on 25 June 2023 for sales was entered in the Cash Receipts Journal as R2 910. F. A debtor transferred R1 000 directly into the bank account of Zulu Stores in settlement of their account of R1 100. This appeared only on the Bank Statement for June 2023. G. The annual insurance premium in respect of the owner’s personal vehicle was paid by means of a debit order, R1 440. This appeared on the June 2023 Bank Statement only. H. The debit order for cellphone data, R1 840, was not recorded in the relevant Cash Journal. It was also incorrectly duplicated on the June 2023 Bank Statement. I. A deposit for R22 500, dated 23 June 2023, was not reflected in the respective Cash Journal, but appeared on the June 2023 Bank Statement. J. A deposit of R12 700, dated 20 June 2023, was not reflected on the June 2023 Bank Statement. The amount appeared only in the Cash Receipts Journal. K. Rent of R9 200, received on 30 June 2023, was recorded in the relevant Cash Journal from a proof of payment received from the tenant. This did not appear on the Bank Statement for June 2023. L. The following EFTs, all dated 30 June 2023, were not reflected on the Bank Statement for June 2023:  EFT 778 R 6 200  EFT 791 R 520  EFT 797 R 1 260 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 PAPER 2 GRADE 11 M. On the May 2023 Bank Statement, the interest amount of R355 received from the bank for a positive bank balance, was duplicated by mistake. The error was corrected on the Bank Reconciliation Statement for May 2023. However, it was found that the error has not yet been corrected by the bank on the June 2023 Bank Statement. The bank has given the assurance that the error will be corrected in July 2023. N. The Bank Statement closed with a balance of R ? on 25 June 2023. 40 QUESTION 2: CREDITORS’ RECONCILIATION (25 marks; 20 minutes) The owner of Sunrays Nurseries, Ms Flowers, requested your help in a reconciliation of a creditor’s account from creditor Rose Traders. Ms Flowers is of the opinion that her business only owes R3 266 to Rose Traders and she is therefore upset that the statement she received reflects an amount of R16 727 outstanding. REQUIRED: 2.1 Prepare the corrected account for Rose Traders in the Creditors' Ledger of Sunrays Nurseries. (14) 2.2 Prepare the Creditors' Reconciliation Statement on 30 April 2023. (11) INFORMATION: A. The following account appeared in the Creditors' Ledger of Sunrays Nurseries on 30 April 2023: Details Debit Credit Balance April 1 Balance 2 000 2 000 3 Receipt 417 600 2 600 6 Invoice 338 3 850 6 450 10 EFT 1048 3 630 2 820 Discount (EFT 1048) 330 2 490 11 Invoice 619 1 870 620 Debit note 72 297 323 15 Invoice 342 5 200 5 523 20 Debit note 75 350 5 173 24 EFT 1059 2 420 2 753 Discount (EFT 1059) 242 2 511 26 Invoice 2301 4 400 6 911 30 EFT 1067 4 050 2 861 Discount (EFT 1067) 405 3 266 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 PAPER 2 GRADE 11 B. On 30 April 2023 Ms Flowers received the following statement from Rose Traders: Details Debit Credit Balance April 1 Balance 2 000 2 000 6 Invoice 338 (Sales) 3 850 5 850 10 Receipt 1104 (Payment received) 3 630 2 220 Discount allowed on receipt 1104 363 1 857 11 Credit note 143 (Allowance) 270 1 587 15 Invoice 342 (Sales) 5 720 7 307 19 Invoice 347 (Sales) 2 310 9 617 20 Credit note 145 (Allowance) 350 9 267 24 Receipt 1112 (Payment received) 2420 6 847 Discount allowed on receipt 1112 121 6 726 29 Invoice 351 (Sales) 10 001 16 727 C. The entry on 3 April 2023 in the account of Rose Traders in the Creditors' Ledger is incorrect, the amount was received from a debtor, Palm Tree. D. Ms Flower has an arrangement with Rose Traders that a 10% discount will be received on each payment made (see entries on 10th and 24th). E. Invoice 619 for R1 870 on 11 April 2023 in the account of Rose Traders in the Creditors' Ledger, is in respect of stock sold to Plants Galore on credit. F. On 11 April 2023 an entry for R297 (debit note 72) was made in the Creditors' Allowance Journal dealing with an allowance from Rose Traders. It has been established that this entry has been correctly made in the Creditors' Ledger. G. An error was made when posting the entry on 15 April from the Creditors' Journal to the account of Rose Traders. The amount is correct on the statement received. H. Invoice 347 on 19 April 2023 on the statement from Rose Traders was in respect of another customer, Reaping Rose. I. Invoice 2301 for R4 400 on 26 April in the account of Rose Traders in the Creditors' Ledger was erroneously posted to this account, instead of to the account of Bark Traders. J. The sales of R10 001 reflected on 29 April 2023 in the statement from Rose Traders was definitely for Sunrays Nurseries. K. A posting error occurred in the books of the business, for the discount (EFT 1067) on the 30th which still has to be corrected. L. Certain entries do not appear on the statement as the statement was sent on 27 April 2023, while the Creditors' Ledger continues till 30 April 2023. 25 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 PAPER 2 GRADE 11 QUESTION 3: FIXED ASSETS AND ASSET DISPOSAL (55 marks; 44 minutes) 3.1 MATCHING Match the words/phrases in Column A with the best definition/explanation in Column B. Write only the letters (A – G) next to the question numbers (3.1.1 to 3.1.5) in the ANSWER BOOK. (5) COLUMN A COLUMN B 3.1.1 Non-current asset A A possession that remains in the business for less than a year and is used to generate income 3.1.2 Disposal B When a business decides that the useful life of a tangible asset is over and they retire the asset by scrapping, selling or donating it 3.1.3 Historical cost C A control tool to record the details of each individual tangible asset in the business and its depreciation 3.1.4 Depreciation D A possession that remains in the business for more than one year and is used to generate income 3.1.5 Materiality E Small amounts that have no real relevance need not be disclosed separately according to this GAAP principle F The reduction in value of a tangible asset, generally from wear and tear G The original price for an acquisition of a tangible asset must be recorded according to this GAAP principle 3.2 You are provided with information relating to KG Traders on 30 June 2023, the end of the accounting period: REQUIRED: Use the information given to complete the following: 3.2.1 Depreciation on vehicles for the year ended 30 June 2023. Use the table provided as a guide. (16) 3.2.2 Asset Disposal Account in the General Ledger (8) 3.2.3 Prepare Note 3 on Tangible Assets. Show calculations where necessary. (19) P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 PAPER 2 GRADE 11 INFORMATION: Balances on 1 July 2022 Accumulated Carrying Cost depreciation value Land and buildings 400 000 ( 0) 400 000 Vehicles 300 000 (76 000) 224 000 TRANSACTIONS: 30 September 2022  Extension to the building at the cost of R120 000  Repairs to the storeroom cost the owner R25 000 31 December 2022  Traded in an old vehicle for R55 000 on a new vehicle for R150 000 from Jozi Motors. The vehicle was bought on 1 July 2020 for R100 000. Calculation of Depreciation  On vehicles at 20% per annum on book value 3.3 INTERNAL CONTROL OF ASSETS REQUIRED: Answer the questions related to the case study below. INFORMATION: Jeanette Rowls is the owner of Hair Online, an online store which sells hair products delivered to your door. Jeanette recently bought a building in Springs which she uses as the office as well as the storage facility. The business has 2 mini vans, which Jeanette purchased second hand; each with their own driver, 1 laptop and 1 printer. Jeanette has asked for your help with the following: 3.3.1 Jeanette is aware that most assets lose value due to normal wear and tear. Which fixed asset does not normally depreciate at the end of the financial year? Briefly explain why this asset does not depreciate. (2) 3.3.2 Jeanette takes the laptops home every day for her children to use so they can access their online lessons. Explain how the depreciation will be dealt with for these laptops. Refer to the applicable GAAP principle in your answer. (3) 3.3.3 Jeanette noticed that one of the mini van’s kilometre reading is higher than it should be. Give ONE practical solution on how she can solve this issue. (2) 55 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 PAPER 2 GRADE 11 QUESTION 4: FINANCIAL INDICATORS (30 marks; 24 minutes) You are provided with information of Exclusive Boutique, an upscale clothing boutique in Sandton. The information was taken from the financial records at the end of the financial year, 30 June 2023. The partners are M. Floyd and T. Bins. The business aims to achieve a 100% mark-up on cost. REQUIRED: Refer to the information provided and answer the questions below. When interpreting financial information always refer to financial indicator/s and/or figures in your answer/s. 4.1 Calculate the mark-up on cost that the business achieved for the year ended 30 June 2023. (3) 4.2 Refer to your answer to QUESTION 4.1. Is there cause for concern? Give ONE reason for your answer. (2) 4.3 If the business does not achieve the intended mark-up of 100%, it does not always indicate problems. 4.3.1 Give ONE possible reason where not achieving the intended mark-up is not a cause for concern. (1) 4.3.2 Give ONE possible reason where not achieving the intended mark-up is a cause for concern. (1) 4.4 Calculate the operating expenses on sales for the year ended 30 June 2023. (3) 4.5 Refer to your answer to QUESTION 4.4. In your opinion, has the business been able to control its operating expenses well? Give ONE reason for your answer, with figures. (2) 4.6 The partners are of the opinion that the profitability of the business has deteriorated from last year. State TWO indicators, with figures and trends, to support their opinion. (4) 4.7 Calculate the stock turnover rate for the year ended 30 June 2023. (3) 4.8 Refer to your answer to QUESTION 4.7. Is there cause for concern? Give ONE reason for your answer. (2) 4.9 Calculate the number of days for which there is stock on hand. (3) 4.10 Refer to your answer to QUESTION 4.9. Is there cause for concern? Give ONE reason for your answer. (2) 4.11 How could a business improve its control over its debtors and creditors? Mention ONE way to improve control over debtors and ONE way to improve control over creditors. (4) P.T.O.

Downloaded from hlayiso.com INFORMATION: A. Extract from the credit policy of Exclusive Boutique:  Debtors have to settle their accounts within 30 days.  Creditors have to be paid within 60 days to qualify for a 5% early settlement discount.  Creditors have to be paid no later than 90 days after incurring the debt to avoid the 3% per month interest penalty. B. Figures from the financial statements: 2023 2022 Turnover 4 000 000 Cost of sales 2 200 000 Operating expenses 1 888 000 Inventory 600 000 400 000 Trade creditors 140 000 160 000 C. Credit purchases for the year, R600 000. D. Financial indicators as calculated for the past two years: 2023 2022 % mark-up on cost ? 97% % gross profit on sales 45% 45% % operating expenses on sales ? 30% % operating profit on sales 18% 22% % net profit on sales 15% 17,7% Stock turnover rate ? 4 times p.a. Stock on hand ? 91,3 days Average debtors' collection period 55 days 65 days Average creditors' payment period 91 days 59 days 30 TOTAL: 150 END

Downloaded from hlayiso.com ACCOUNTING 11 PAPER 2 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 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