Accounting Grade 12 Gauteng Mock 2017 Addendum

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION 2017 10710 ACCOUNTING ANSWER BOOK 19 pages Name QUESTION MARKS MARKER / MODERATOR 1 2 3 4 5 6 TOTAL 3 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 2 10710/17 GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION – 2017 ACCOUNTING TIME: 3 hours MARKS: 300 QUESTION 1: RECONCILIATION 1.1 BANK RECONCILIATION 1.1.1 Provide ONE reason why Bank Reconciliation is important for a business. 2 1.1.2 Identify the cheque that is incorrectly entered in the Bank Reconciliation Statement for August 2017. Provide ONE reason for your choice. 2 Show the correction of the error by completing the table below. General Ledger Effect on Accounting equation Account Debit Account Credit A = E + L 4 Calculate the correct balance as per the Bank Account in the General Ledger after taking the error into account. 7 Indicate whether it is a favourable or unfavourable balance. P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 3 10710/17 1.2 DEBTORS’ RECONCILIATION AND AGE ANALYSIS 1.2.1 Show the corrections that must be made to the Debtors’ Control Account and the Debtors’ List to reconcile the differences noted. No. Debtors’ Control Debtors’ List 7 83 750 88 550 (i) (ii) (iii) 1.2.2 Zoxolo feels that the debtors are not effectively controlled. Provide ONE reason why you think he feels this way. Do a calculation to support your answer. 5 State TWO actions that Zoxolo Traders could take in order to encourage debtors to settle their accounts according to the terms. 2 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 4 10710/17 1.3 ETHICS AND INTERNAL CONTROL 1.3.1 Explain ONE measure that the business must put in place to avoid the unethical practice that occurred with Invoice BT101. 2 1.3.2 Refer to Invoice BT109. State ONE case when the above transaction will constitute ethical behaviour. 4 State ONE case when the above transaction will constitute unethical behaviour. TOTAL MARKS 35 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 5 10710/17 QUESTION 2: MANUFACTURING CONCEPTS 2.1 Choose the cost category. 2.1.1 2.1.2 4 2.1.3 2.1.4 2.2 THE NUTTY DELIGHT FACTORY SHOP 2.2.1 Calculate the value of the raw materials that were issued to the factory for the year ended 30 June 2017. 9 2.2.2 Prepare the Production Cost Statement for the year ended 30 June 2017. THE NUTTY DELIGHT FACTORY SHOP PRODUCTION COST STATEMENT FOR THE YEAR ENDED 30 JUNE 2017 R 14 Prime Cost Total cost of production Less: Work-in-process at end of the year (94 000) Cost of production of finished goods P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 6 10710/17 2.2.3 The Nutty Delight Factory shop buys mainly from overseas suppliers. Upon investigation, it was found that most of the nuts used in the production process can be obtained from local suppliers. Explain ONE possible reason why a local supplier should be used. 2 2.2.4 Romi Goni plans to increase profits by decreasing costs. Romi intends to replace the more expensive nuts with peanuts but still sell the snacks at R40 each. Should Romi carry out this plan? 3 Explain ONE valid reason for your decision. 2.3 JADEN STORES 2.3.1 Calculate the break-even point for 2017. 5 2.3.2 Explain whether the owner should be concerned. Provide figures. 3 TOTAL MARKS 40 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 7 10710/17 QUESTION 3: COMPANY FINANCIAL STATEMENTS AND AUDIT REPORT 3.1 CONCEPTS Match the concepts in Column A with the descriptions in Column B. 3.1.1 3.1.2 5 3.1.3 3.1.4 3.1.5 3.2 AMARA LIMITED 3.2.1 Calculate the Net Profit after Tax. R Incorrect Net Profit before Tax 1 024 400 10 Net profit before tax Income Tax Net Profit after tax P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 8 10710/17 3.2.2 ORDINARY SHARE CAPITAL AUTHORISED Number of authorised ordinary shares: 400 000 shares ISSUED R 160 000 Ordinary shares at the beginning of the year 4 000 000 9 RETAINED INCOME R Balance at the beginning of the year 540 000 10 Balance at the end of the year P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 9 10710/17 3.2.3 AMARA LIMITED BALANCE SHEET AS AT 28 FEBRUARY 2017 ASSETS R NON-CURRENT ASSETS CURRENT ASSETS TOTAL ASSETS EQUITY AND LIABILITIES SHAREHOLDERS’ EQUITY NON-CURRENT ASSETS CURRENT LIABILITIES TOTAL EQUITY AND LIABILITIES 31 TOTAL MARKS 65 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 10 10710/17 QUESTION 4: CASH FLOW STATEMENT AND RATIO ANALYSIS 4.1 CONCEPTS Write down only the answer next to the question number (4.1.1 – 4.1.3). 4.1.1 4.1.2 3 4.1.3 4.2 NKOSI LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 28 FEBRAURY 2017 R CASH EFFECTS FROM OPERATING ACTIVITIES Cash generated from operations 916 022 Interest paid (144 000) CASH EFFECTS FROM INVESTING ACTIVITIES CASH EFFECTS FROM FINANCING ACTIVITIES Net change in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 985 390 32 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 11 10710/17 4.3 FINANCIAL INDICATORS OF TWO COMPANIES: 4.3.1 Calculate the following financial indicators: Net Asset Value of Talk Ltd. Debt-Equity Ratio of Data Ltd. 6 4.3.2 Your friend is of the opinion that the liquidity position of Talk Ltd. is better than that of Data Ltd. Quote and explain (with figures) to support her opinion. Quote TWO financial indicators. 6 Explanation P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 12 10710/17 4.3.3 Data Ltd. paid off a large portion of its loan during the financial year. Quote TWO financial indicators with relevant figures to show why this was not a good decision taken by the directors. Relevant financial indicators: 7 Comment: 4.3.4 Will the shareholders be satisfied with the price at which the new shares were issued for both companies? Explain. Quote relevant financial indicators and figures for each company. Data Ltd. Talk Ltd. Yes/No 6 Relevant indicator and comment with figures P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 13 10710/17 4.3.5 Your friend owns 30 000 shares in each of the companies. Data Ltd. Talk Ltd. Calculate the dividends that she earned from each company. Compare and 10 comment on the dividend pay-out policies of the two companies. Provide calculations in your explanation. Explain ONE reason for the dividend pay-out of each company. TOTAL MARKS 70 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 14 10710/17 QUESTION 5: INVENTORY VALUATION AND PROBLEM-SOLVING INVENTORY CALCULATIONS 5.1.1 Calculate the number of hats on-hand on 28 February 2017, the financial year-end. 3 5.1.2 Calculate the following using the weighted average method: Value of the final stock on-hand on 28 February 2017 7 Gross profit 5 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 15 10710/17 5.1.3 The owner wants to alternate between using the weighted average method and the First-In-First-Out (FIFO) method, depending on which will result in a higher profits. Calculate the following using the FIFO method: Value of the final stock on-hand on 28 February 2017 5 Gross profit percentage on cost of sales 6 Provide TWO reasons why alternating between the two methods of valuing stock does not comply with the requirements of International Financial Reporting Standards (IFRS). 4 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 16 10710/17 5.2 GYM TRIM 5.2.1 Calculate the number of days of stock on-hand for Gym Bags. Gym Bags are sold at a mark-up of 25% on cost. The average stock amounted to R153 600. 6 5.2.2 Identify ONE different problem in respect of the manner in which each product is managed. Quote figures to support your answer. In each case offer practical advice. Problem with figures Possible solution 9 Sweatbands Towels Gym Bags TOTAL MARKS 45 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 17 10710/17 QUESTION 6: VAT AND BUDGETS 6.1 VAT Complete the following sentences by writing down the missing words or figures. 6.1.1 6 6.1.2 6.1.3 6.1.4 6.2 CASH BUDGET 6.2.1 Provide ONE reason why it is essential for the business to prepare a Cash Budget. 2 6.2.2 Complete the Debtors’ Collection Schedule. MONTH CREDIT SALES NOVEMBER DECEMBER November 144 000 34 200 7 December 34 200 P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 18 10710/17 6.2.3 Calculate the missing figures for cash surplus/deficit and bank balances (A – E) on the Cash Budget. Calculations Answer A 16 B C D E 6.2.4 Comment briefly on the bank balances. Quote figures. 8 Explain TWO significant measures they have used to improve the cash flow. Quote figures. P.T.O.

Downloaded from hlayiso.com ACCOUNTING ANSWER BOOK 19 10710/17 6.2.5 The owner feels that there is a problem regarding some of the income and expense items. In each case suggest how to improve the internal control of the items concerned. ITEM ADVICE Cash sales 6 Rent income Delivery vehicle expenses TOTAL MARKS 45 TOTAL: 300 END