NW 12 ACCOUNTING P1 QP ENG JUNE 2025

PROVINCIAL ASSESSMENT GRADE 12 ACCOUNTING P1 JUNE 2025 MARKS: 150 TIME: 2 hours This question paper consists of 11 pages, a formula sheet and a 10-page answer book. Copyright reserved Please turn over

Accounting/P1 2 NW/June 2025 Grade 12 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL questions. 2. A special ANSWER BOOK is provided in which to answer ALL questions. 3. A Financial Indicator Formula Sheet is attached at the end of this question paper. 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 MINUTES 1 Concepts, Income Statement and Balance 55 44 Sheet 2 Ordinary Share Capital and Retained Income 51 41 Notes and Cash Flow Statement 3 Analysis and interpretation of financial 24 19 statements 4 Corporate governance and Audit reports 20 16 TOTAL 150 120 Copyright reserved Please turn over

Accounting/P1 3 NW/June 2025 Grade 12 QUESTION 1: CONCEPTS, INCOME STATEMENT AND BALANCE SHEET (55 marks; 44 minutes) 1.1 Choose a description from COLUMN B that matches the term/principle in COLUMN A. Write only the letter (A–F) next to the question numbers (1.1.1 to 1.1.5) in the ANSWER BOOK. COLUMN A COLUMN B 1.1.1 IFRS A Tracks the movement of cash into and out of a business over a specific period. 1.1.2 Cash flow statement B Is appointed at the AGM of a company and is responsible for expressing an opinion on the financial statements of a company with which they are not affiliated. 1.1.3 Income statement C Is elected at the AGM of a company and is responsible for managing the company and implementing policies. 1.1.4 Director(s) D Specific guidelines that must be followed when preparing financial statements to ensure consistency. 1.1.5 Independent auditor(s) E Reflects possible profits or losses for a given financial period. F An indication of the financial position of a company on a given date. (5) 1.2 WANKARABA LIMITED The information relates to Wankaraba Limited for the financial year ended 30 April 2025. REQUIRED Complete the following: 1.2.1 The Statement of Comprehensive Income for the year ended 30 April 2025. (33) 1.2.2 The Statement of Financial Position, Equity and Liabilities, certain amounts have already been filled in in the ANSWER BOOK. (17) Copyright reserved Please turn over

Accounting/P1 4 NW/June 2025 Grade 12 INFORMATION: Extract from the Pre-Adjustment Trial Balance on 30 April 2025. Balance Sheet accounts section Ordinary share capital 3 500 000 Retained income ? Loan: Mahikeng Bank 5 100 000 Equipment 438 500 Accumulated depreciation on equipment (1 May 2024) 122 000 Debtors control 952 600 Provision for bad debts 50 000 Trading stock 843 136 SARS: Income Tax (provisional tax payments) 462 160 Creditors control 967 350 Nominal accounts section Sales 7 523 000 Cost of sales ? Rental income 119 808 Wages and salaries 457 745 Insurance 42 000 Directors' fees 687 500 Adjustments and additional information: A. On 29 April 2025, a debtor, L Landini, returned goods that had been sold to him for R40 600. This was not recorded. B. Wankaraba Ltd maintains a profit mark-up of 60% on cost. Sales include sales of R260 000 during the year on which a 20% trade discount was granted. C. Wankaraba Ltd's debtor collection has improved drastically during the past year and therefore the provision for bad debts must be adjusted to 5% of outstanding debtors. D. A physical stocktaking on the last day of the financial year shows trading stock worth R835 000. E. The company has been renting an unused section of the building since 1 July 2024. The lease agreement stipulates that the rent will increase by 6% annually on 1 November. The tenant has paid 2 months' rent in advance because he is on holiday. F. Provide for depreciation on Equipment at 10% per annum on the reducing balance method. NOTE: New equipment worth R64 500 was purchased on 1 January 2025 and properly recorded. Copyright reserved Please turn over

Accounting/P1 5 NW/June 2025 Grade 12 G. An additional insurance policy with an annual premium of R18 000 was paid and recorded on 1 August 2024. H. Wankaraba Ltd has two directors and one of the directors has already received his director’s fee for May 2025. I. The loan statement received from Mahikeng Bank shows interest of R480 000 to be capitalised. 25% of the outstanding amount of the loan will be repaid in the next financial year. J. The correct net profit after tax, after taking the above adjustments into account, amounts to R1 251 378. Income tax was calculated at the standard rate of 28%. K. Shares and dividends:  The directors did not declare interim dividends during the financial year as they are retaining income to expand the business. A final dividend of 13 cents per share was however declared to keep the shareholders happy.  No shares were issued or repurchased during the financial year. Wankaraba Ltd had 75% of the authorised shares of 1 200 000 in issue.  The NAV of shares is 628 cents on 30 April 2025. 55 QUESTION 2: ORDINARY SHARE CAPITAL AND RETAINED INCOME NOTES AND CASH FLOW STATEMENT (51 marks; 41 minutes) 2.1 Choose the correct word(s) in brackets to complete the statement. Write only the correct word(s) next to the question numbers (2.1.1 to 2.1.5) in the ANSWER BOOK. 2.1.1 Consumables on hand at the end of the financial year are classified as a (current asset/financial asset). 2.1.2 Shareholders only lose their investment in shares if a company goes bankrupt due to the (limited/unlimited) liability concept. 2.1.3 The demand for shares on the JSE is influenced by the (net asset value per share/market price per share). 2.1.4 Significant items, such as interest expense, are shown separately in the financial statements in accordance with the (prudence principle/ accrual principle/materiality principle). 2.1.5 (Liquidity/Solvency) indicates the ability of the company to meet its short-term obligations. (5) Copyright reserved Please turn over

Accounting/P1 6 NW/June 2025 Grade 12 2.2 Notes to the balance sheet and cash flow statement. The following information relates to Anathi Ltd. Anathi Ltd has an authorised share capital of 3 680 000 ordinary shares. The financial year ends on 28 February annually. Prepare the following notes to the Balance Sheet for the financial year ended 28 February 2025: 2.2.1 Ordinary share capital (8) 2.2.2 Retained income (10) 2.3 Calculate the amount that will appear in the Cash Flow Statement for: 2.3.1 Taxation (4) 2.3.2 Dividends paid (3) 2.3.3 Shares bought back (3) 2.4 Prepare the following sections of the Cash Flow Statement: 2.4.1 Change in operating capital (10) 2.4.2 Cash flow from financing activities (4) 2.4.3 Net change in cash and cash equivalents (4) INFORMATION: A. Share capital and dividends:  Authorised shares: 3 680 000 On 1 March 2024, 25% of the authorised shares were in issue.  320 000 additional shares were issued on 1 March 2024 for R761 200.  An Interim dividend of 15c per share was paid on 31 August 2024.  20 000 shares were bought back from a dissatisfied shareholder on 28 February 2025 at R0,50 more than the average share price. The shareholder still qualifies for the final dividend. Copyright reserved Please turn over

Accounting/P1 7 NW/June 2025 Grade 12 B. Extract from the Income Statement for the year ended 28 February 2025. Depreciation ? Interest expense 44 000 Income tax (28%) 464 800 Net profit after tax ? C. Extract from the Balance Sheet of Anathi Ltd on 28 February 2025: 2025 2024 Fixed assets at carrying value 1 734 190 1 300 500 Financial assets Investments 1 640 000 1 680 000 Current assets Stock 224 000 328 000 Trade and other receivables: 256 000 316 000 Trade debtors 239 600 204 000 SARS - Income Tax 16 400 0 Prepaid expenses 0 112 000 Cash and cash equivalents 210 400 15 000 Shareholder equity 3 201 200 ? Ordinary Share Capital 1 744 600 ? Retained Income ? 2 474 800 Long-term liabilities Loan: ASKA Bank 800 000 960 000 Current liabilities 233 600 479 300 Trade creditors 120 000 88 000 SARS: Income Tax 0 23 800 Shareholders for dividends 272 800 154 000 Revenue received in advance 9 600 0 Bank overdraft 0 126 000 51 Copyright reserved Please turn over

Accounting/P1 8 NW/June 2025 Grade 12 QUESTION 3: ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS (24 marks; 19 minutes) Boland Ltd vs Limpopo Ltd A colleague of yours is a shareholder in two companies, Boland Limited and Limpopo Limited, which are listed on the JSE. You have been saving for a long time and have R150 000 to invest and therefore ask his advice. He provides you with the following information about both companies. REQUIRED: 3.1 Calculate the following financial indicators:  Net asset value of Limpopo Ltd  Debt-equity ratio of Boland Ltd (6) 3.2 Your colleague is of the opinion that the liquidity situation of Limpopo Ltd is better than that of Boland Ltd. Quote TWO financial indicators with figures to support his opinion. (6) 3.3 Boland Ltd decided to pay off a large amount on the loan during the financial year. Quote TWO financial indicators with appropriate figures to show why this was not a good decision by the directors. (Gearing) (6) 3.4 Comment on the value of the shares of the two companies on the JSE. Explain how these figures will influence your choice regarding the companies. (6) INFORMATION: A Extract from the Statement of Financial Position of Boland Ltd and Limpopo Ltd as at 30 April 2025: Boland Ltd Limpopo Ltd Shareholders' equity 3 033 450 4 233 600 Ordinary share capital 2 424 000 3 186 000 Retained income 609 450 1 047 600 Non-current liabilities 606 690 2 540 160 Copyright reserved Please turn over

Accounting/P1 9 NW/June 2025 Grade 12 B Financial indicators Boland Ltd Limpopo Ltd Operating ratio 4,3 : 1 2,0 : 1 Acid test 3,31 : 1 1,3 : 1 Stock turnover rate 5 times 9 times Debt-equity ratio ? 0,6 : 1 % Return on average 25,9% 15,0% shareholders' equity % Return on total capital employed 18,8% 10,7% Interest on loans 11% 11% Market price per share on the JSE 715 cents 915 cents Net asset value per share 540 cents ? Dividend per share 235 cents 250 cents Earnings per share 355 cents 290 cents C Both companies have a total of 378 000 issued shares as on 28 February 2025. 24 Copyright reserved Please turn over

Accounting/P1 10 NW/June 2025 Grade 12 QUESTION 4: CORPORATE GOVERNANCE AND AUDIT REPORTS (20 marks; 16 minutes) 4.1 CORPORATE GOVERNANCE Use the information below and your knowledge on companies to answer the following questions. INFORMATION: Winston noticed that the company's Purchasing Manager had received a new laptop from a supplier. He immediately reported this to his supervisor. The supervisor was initially reluctant to investigate the incident but nevertheless obtained information about the matter at Winston's request. During further investigation, it came to light that a tender to upgrade the company's computer equipment was awarded to this supplier. REQUIRED: 4.1.1 Choose the correct answer from the words given in brackets. Winston could be described as a (whistle-blower/employee) in this situation. (1) 4.1.2 It is essential that the identities of those who report corruption are protected. Give ONE reason that can be used to convince the directors that they cannot openly thank Winston. (2) 4.1.3 Provide ONE term to describe the “gift” that the Purchasing Manager received. (1) 4.1.4 Indicate ONE internal measure that the company could implement to prevent a recurrence of such an incident in the future. (2) 4.1.5 A concerned shareholder has heard about the incident. Provide TWO possible questions that he could ask at the next AGM regarding the company's tender policy. (4) Copyright reserved Please turn over

Accounting/P1 11 NW/June 2025 Grade 12 4.2 AUDIT REPORTS The following is an extract from the audit report of Pilanesberg Limited for the financial year ended 30 April 2025: Audit opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the company, Pilanesberg Limited, on 30 April 2025 and the results of its operations and cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act, 2008 (Act 71 of 2008). Motepo Partners Chartered Accountants (SA) 31 May 2025 REQUIRED: 4.2.1 Indicate which type of audit report Pilanesberg Limited received. Provide ONE reason for your choice. (4) 4.2.2 Give ONE reason why the Companies Act requires public companies to be audited by an independent auditor. (2) 4.2.3 Newspaper reports have indicated that Motepo Partners were found guilty of maladministration in relation to audit work carried out at several large firms. Explain how this could affect shareholders of Pilanesberg Ltd. State TWO points. (4) 20 TOTAL: 150 Copyright reserved

Accounting/P1 NW/June 2025 Grade 12 GRADE 12 ACCOUNTING FORMULA SHEET WITH FINANCIAL INDICATORS Gross profit x 100 Gross profit x 100 Sales 1 Cost of Sales 1 Net profit before tax x 100 Net profit after tax x 100 Sales 1 Sales 1 Operating expenses x 100 Operating profit x 100 Sales 1 Sales 1 Total assets : Total liabilities Current assets : Current liabilities (Current assets – Inventory) : Current liabilities Non-current liabilities : Shareholders' equity (Trade & other receivables + Cash & cash equivalents) : Current liabilities Average trading stock x 365 Cost of Sales Cost of Sales 1 Average trading stock Average debtors x 365 Average creditors x 365 Credit sales 1 Cost of sales 1 Net profit after tax x 100 Net profit after tax x 100 Average shareholder equity 1 Number of shares issued 1 (* See note below) Net profit before tax + Interest on loans x 100 Average shareholders' equity + Average non-current liabilities 1 Shareholders' interest x 100 Dividends for the year x 100 Number of shares issued 1 Number of shares issued 1 Interim dividends x 100 Final dividends x 100 Number of shares issued 1 Number of shares issued 1 Dividends per share x 100 Dividends for the year x 100 Earnings per share 1 Net income after tax 1 Total fixed costs Selling price per unit – Variable cost per unit Note:  In this case, if there is a change in the number of shares issued during a financial year, the weighted average number of shares is used in practice. Copyright reserved