Accounting Grade 12 Gauteng Mock 2019 Addendum (English)

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION 2019 10710 ACCOUNTING ANSWER BOOK 19 pages Name: QUESTION MARKS MARKER / MODERATOR 1 2 3 4 5 6 TOTAL P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 2 10710/19 GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION ACCOUNTING TIME: 3 hours MARKS: 300 QUESTION 1: 1.1 State whether each of the following statements is TRUE or FALSE. 1.1.1 1.1.2 1.1.3 3 1.2 BANK RECONCILIATION 1.2.1 Calculate the following on 31 August 2019: Correct totals for the CRJ and CPJ: CRJ CPJ 90 140 100 280 Bank Account balance: 15 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 3 10710/19 1.2.2 Prepare the Bank Reconciliation Statement on 31 August 2019. Bank Reconciliation Statement on 31 August 2019 7 1.2.3 Explain ONE benefit of using the electronic funds transfer (EFT) system rather than cheques for direct payments to suppliers. 2 1.2.4 The internal auditor is concerned about the management of cash. (a) Identify ONE problem that justifies his concern. Quote figures. 2 (b) Provide ONE point of advice to avoid this problem in future. 2 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 4 10710/19 1.3 CREDITORS' RECONCILIATION Creditors' Reconciliation Creditors' Ledger Statement Balance 28 370 25 300 9 TOTAL MARKS 40 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 5 10710/19 QUESTION 2 2.1 KLEMISH MANUFACTURERS 2.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2019 Direct material cost Direct labour cost Prime cost Factory overhead cost Total cost of production 13 2.1.2 ABRIDGED INCOME STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2019 Sales 8 160 000 Cost of Sales 11 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 6 10710/19 2.2 DAMARA’S JEWELLERY 2.2.1 Break-even point: (a) Calculate the break-even point for February 2019. 4 (b) Damara is satisfied with the results. Explain ONE reason with figures to support Damara’s satisfaction. 3 2.2.2 Refer to the unit costs. (a) Explain why the fixed costs per unit decreased. 2 (b) Provide ONE possible reason for the change in Direct Material Costs. 2 TOTAL MARKS 35 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 7 10710/19 QUESTION 3 3.1 CONCEPTS 3.1.1 3.1.2 3.1.3 3.1.4 4 3.2 PHAMBILI LIMITED 3.2.1 Prepare the following notes for the financial year ended 28 February 2019. (a) Ordinary share capital 11 (b) Retained income Balance at the beginning of the year 355 500 Ordinary share dividends Balance at the end of the year 11 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 8 10710/19 3.2.2 Complete the Balance Sheet (Statement of Financial Position) on 28 February 2019. Where notes are not required, show ALL workings. BALANCE SHEET ON 28 FEBRUARY 2019 ASSETS NON-CURRENT ASSETS CURRENT ASSETS 1 400 200 Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES ORDINARY SHAREHOLDERS' EQUITY Ordinary share capital NON-CURRENT LIABILITIES Loan CURRENT LIABILITIES 1 208 000 Trade and other payables TOTAL EQUITY AND LIABILITIES 29 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 9 10710/19 3.3 AUDITING 3.3.1 Explain why the shareholders would be satisfied with this audit report. 2 3.3.2 Tello Motloung, the managing director, has informed the auditors that he intends to buy the unissued shares for himself without informing the other shareholders. What advice should the auditors give to Tello? Explain. 2 3.3.3 Explain why the auditors found it necessary to stipulate the page numbers in the report. 2 3.3.4 Explain TWO major consequences for Mxo and Frank should they be negligent in performing their duties. 4 TOTAL MARKS 65 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 10 10710/19 QUESTION 4 4.1 Calculate the missing figures indicated by (a) – (e) in the Fixed Asset Note. CALCULATIONS AMOUNT (a) (b) (c) (d) (e) 17 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 11 10710/19 4.2 CASH FLOW STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2019 R CASH EFFECTS OF OPERATING ACTIVITIES Cash generated from operations Interest paid (208 800) Dividends paid Income Tax paid CASH EFFECTS FROM INVESTING ACTIVITIES CASH EFFECTS FROM FINANCING ACTIVITIES Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 30 4.3 Calculate the Debt-Equity ratio for 2019. (Round-off to TWO decimal points.) 3 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 12 10710/19 4.4 The directors decided to increase the loan during the current financial year. Explain TWO financial indicators to indicate why this was a good decision. Quote figures. 8 4.5 The board of directors is of the opinion that the shareholders should be happy with their percentage return and the market price of their shares. Quote and explain TWO financial indicators with figures to support their opinion. 6 4.6 The Cash Flow Statement reflects some important decisions taken by the Directors. Apart from the loans, identify TWO good decisions. Explain the effect of these decisions on the company. Quote figures. DECISION EFFECT ON COMPANY 6 TOTAL MARKS 70 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 13 10710/19 QUESTION 5: STOCK VALUATION AND VAT 5.1 Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question number (5.1.1 – 5.1.4) in the ANSWER BOOK. 5.1.1 5.1.2 5.1.3 5.1.4 4 5.2 KROOKED SKATEBOARD TRADERS 5.2.1 Calculate the following on 28 February 2019: (a) The value of closing stock using the weighted-average method. 9 (b) Cost of sales: 4 (c) Gross Profit: 3 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 14 10710/19 5.2.2 G Gonzales wants to alternate between using the weighted-average method and a FIFO method, depending on which will result in the higher cost of sales. (a) In your opinion, why do you think G Gonzales wants to increase the value of cost of sales in the financial statements? 2 (b) Provide ONE reason why the bookkeeper says that alternating between two methods of valuing stock does not comply with the requirements of GAAP. 2 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 15 10710/19 5.3 PROTEC TRADERS Identify a different problem in each store. Quote figures to support the problem identified in each case and give Patrick Ace advice on how to solve each problem. Problem (Quote figures.) Solution / Advice Store 1: Lucas Store 2: Pitso Store 3: Pepe 9 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 16 10710/19 5.4 VALUE ADDED TAX (VAT) 5.4.1 Calculate the amount of VAT either receivable from, or payable to SARS on 30 June 2019. Indicate whether this amount is receivable or payable. Receivable / Payable: 10 5.4.2 The owner wants to change the VAT amount on bad debts from R900 to R6 000. Give ONE reason why you would disagree with him. 2 TOTAL MARKS 45 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 17 10710/19 QUESTION 6: BUDGETING 6.1 SEAGATE TRADERS Complete the table by filling in only the amounts for July 2019 in the appropriate columns. Amount in the Projected Amount in the Cash Budget Income Statement for NO. for July 2019 July 2019 RECEIPT PAYMENT INCOME EXPENSE e.g. R3 300 R3 300 6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 10 6.2 BRITE TRADERS 6.2.1 Calculate the credit sales for August 2019 and then complete the Debtors' Collection Schedule for September 2019. CREDIT SALES SEPTEMBER June 46 200 July 54 000 4 320 August September 36 960 7 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 18 10710/19 6.2.2 Calculate the missing amounts indicated by (a) – (e) on the Cash Budget. CALCULATIONS AMOUNT (a) (b) (c) (d) (e) 12 6.2.3 (a) Cleve, the owner decided to offer special discounts to customers during August. The customers will be reminded weekly by telephone or sms about this offer. You are of the opinion that this has NOT benefited the business. Provide TWO reasons to support your opinion. Quote figures. 4 (b) Explain what you would say to Cleve about the control of the following costs. Quote figures to support your answer and provide ONE point of advice in EACH case. COMMENT WITH ITEM ADVICE FIGURES Delivery Costs Advertising 6 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 19 10710/19 6.2.4 (a) Calculate the purchase price of the new vehicle. 4 (b) Apart from the deposit and the monthly instalment of R6 875 on the new vehicle, explain how the next month’s Cash Budget will be affected. State TWO points. 2 TOTAL MARKS 45 TOTAL: 300 END