Accounting Grade 12 Paper 2 KZN June 2020 Question Paper

Downloaded from hlayiso.com education Department: Education PROVINCE OF KWAZULU-NATAL NATIONAL SENIOR CERTIFICATE GRADE 12 MARKS: 150 TIME: 2HOURS This question paper consists of 14 pages and an answer booklet of 9 pages.

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL the questions. 2. A special ANSWER BOOK is provided in which to answer ALL the questions. 3. Show workings in order to achieve part-marks. 4. You may use a non-programmable calculator. 5. You may use a dark pencil or blue/black ink to answer the questions. 6. Where applicable, show all calculations to ONE decimal point. 7. Write neatly and legibly. 8. Use the information and table below as a guide when answering the question. Try NOT to deviate from it. QUESTION 1: 40 Marks; 32 Minutes Topic of the question This question integrates: Bank Reconciliation Reconciliations Creditors Reconciliation Debtors age analysis Internal control QUESTION 2: 30 Marks; 24 Minutes Topic of the question This question integrates: Inventory valuation: weighted average, FIFO Inventory Valuations Internal control Problem-solving QUESTION 3: 50 Marks; 40 Minutes Topic of the question This question integrates: Direct material cost Factory overheads Production Cost Statement Manufacturing Analysis and interpretation Break-even point Internal control QUESTION 4: 30 Marks; 24 Minutes Topic of the question This question integrates: Fixed assets Fixed Assets and Internal Control Asset disposal Account Internal control Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC QUESTION 1 RECONCILIATIONS (40 Marks; 32 Minutes) 1.1 BANK RECONCILIATION You are presented with information relating to Jozini Book shop for February 2020. REQUIRED: 1.1.1 Show the entries that must be recorded in the Cash Journals by completing the table provided in the ANSWER BOOK. (8) 1.1.2 Prepare the Bank Reconciliation Statement on 29 February 2020. (9) 1.1.3 As the internal auditor you are not happy with the manner in which cash is being controlled in this business. Identify ONE problem and provide a figure to support your answer. Give advice on how this problem can be avoided in future. (2) INFORMATION: A. Information from the Bank Reconciliation Statement on 31 January 2020. Favourable balance as per Bank Statement 30 000 Outstanding deposit Dated 30 January 2020 37 500 Outstanding cheques: No.111 ( dated 1 August 2019) 4 700 No.267 ( dated 27 January 2020) 8 000 No.321 ( dated 15 February 2020) 13 000 Favourable balance as per Bank Account in the ledger 41 800 B. Provisional totals in the Cash Journals on 29 February 2020: • CRJ R107 200 • CPJ R121 160 C. A comparison of the February 2020 Bank Statement with the Bank Reconciliation Statement on 31 January 2020 revealed the following: • Only cheque No. 267 and the deposit of R37 500 appeared on the Bank Statement for February 2020. • Cheque No. 111 was issued to the MGM Club in payment of the owners membership fees. The club no longer exists. Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC D. A comparison of the February 2020 Bank Statement with the Cash Journals for February 2020 revealed the following: • Bank charges of R960 on the Bank Statement were not recorded in the relevant journal. • A dishonoured cheque for R6 680 appeared on the Bank Statement. This cheque was received from Mkhize, a debtor, in settlement of his account of R7 370. • Interest of R520 credited on the Bank Statement was not recorded in the Journals. • Cheque No. 421 issued to a creditor appeared correctly on the Bank Statement as R8 940. This was recorded as R9 840 in the Cash Payment Journal. • A debit order of R1 200 for the monthly insurance appeared twice on the Bank Statement in error, but no entry has been made in the Journals. E. The February 2020 Cash Receipts Journal reflected the following outstanding deposits: • R25 000 on 6 February 2020 • R17 000 on 27 February 2020 F. Cheques from the February 2020 Cash Payments Journal not yet presented for payment: • No. 531 for R6 500 (dated 23 February 2020) • No. 561 for R8 100 (dated 25 February 2020) G. The Bank Statement reflected a favourable balance of R9 520 on 29 February 2020. Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC 1.2 CREDITORS RECONCILIATION Pinetown Stores buys goods on credit from Kwamashu Suppliers. REQUIRED: 1.2.1 Use the table provided to indicate the changes that must be made: • In the creditor’s ledger account of Kwamashu Suppliers in the books of Pinetown Stores. (5) • In the statement of account. (6) 1.2.2 Explain how the creditor’s reconciliation statement can assist the business in terms of their internal control. State TWO points. (4) INFORMATION: A. The account of Kwamashu Suppliers in the Creditors Ledger of Pinetown Stores had a balance of R38 100 on 31 May 2020. The statement of account received from Kwamashu Suppliers showed a balance of R40 800 on 25 May 2020. B. An investigation revealed the following errors and omissions: (i) Invoice 458 for R4 100 appeared only in the Creditors Ledger. It was for goods that Pinetown Stores bought from another supplier, Umlazi Suppliers. (ii) Invoice 431 for R5 300 was recorded correctly on the statement of account. It appeared as R3 500 in the Creditors Ledger. (iii) Invoice 463 for R22 000 was erroneously shown by Kwamashu Suppliers in the statement of account. An investigation revealed that it was for goods supplied to another business. Kwamashu Suppliers will rectify this error on the next statement of account. (iv) Discount of R900 was shown correctly on the statement of account. Pinetown Stores had in error overstated this amount by R400 in the Creditors Ledger. (v) Merchandise returned by Pinetown Stores, R1 800, was in error recorded as an invoice on the statement of account. (vi) Merchandise, R21 000, was purchased on credit from Kwamashu Suppliers after the closing date of the statement of account. The entry appeared only in the Creditors Ledger. Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC 1.3 DEBTORS’ AGE ANALYSIS You are provided with the debtors Age Analysis of Skhumbuzo traders on 29 February 2020. REQUIRED: Identify TWO different problems shown by the Age Analysis and quote evidence from the question to support your answer. In each case suggest an internal control measures to correct the problem. (6) INFORMATION: DEBTORS’ AGE ANALYSIS ON 29 FEBRUARY 2020 Credit policy: debtors will be given 30 days in which to settle their debts. NAME CREDIT TOTAL CURRENT 30 60 60 LIMIT MONTH DAYS DAYS DAYS + Mathonsi R5 000 R2 100 R1 000 R 500 R 600 Shabalala R3 500 R4 200 R1 200 R1 800 R1 200 Mbuli R1 500 R2 004 R 704 R1 300 Sangweni R1 500 R1 500 R1 000 R 500 Ndinisa R2 000 R 700 R 700 10 504 R1 700 R2 404 R4 700 R1 700 100% 16% 23% 45% 16% 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Acc 202 NSC QUESTION 2 INVENTORY VALUATIONS 2.1. INVENTORY VALUATION (30 Marks; 24 Minutes) Mid-Year Exam Umlazi shop uses the periodic stock system and the weighted-average method to value stock of jackets. Philani Luthuli owns the business. REQUIRED: 2.1.1 Explain the difference between the perpetual stock system and the periodic stock system. 2.1.2 weighted-average method. weighted-average method. Calculate the value of the stock on hand on 31 May 2020 using the Calculate the stock holding period (in days) for jackets using Philani is considering a change in the method of valuing stock. e Calculate the value of closing stock using the FIFO method. Give ONE reason in favour of and ONE reason against changing to the FIFO method. INFORMATION: Records of jackets for the year ended 31 May 2020: UNITS UNIT TOTAL Opening stock (1 June 2019) Purchases R54 000 R895 000 (from December purchases) Sales (Profit mark-up is 60% on cost) Closing stock (31 May 2020) Copyright reserved R304 | R1 094 400 June 2019 2 500 R203.60 R509 000 September 2019 1 400 R170 R238 000 December 2019 800 R185 R148 000 Subtotal Goods returned (2) (8) (5) (5) (4) Please turn over

Downloaded from hlayiso.com Acc 202 2.2. INTERNAL CONTROL NSC Mid-Year Exam NM Computers sells one brand of computers. The owner, Nozipho has three branches in different shopping centres. Although the business is making a profit, Nozipho is concerned about the profitability of each branch. She investigated and presented the information below, for April 2020 (one month). REQUIRED: Identify ONE different problem in relation to each branch. Quote relevant figures to support your answer. In each case, offer Nozipho advice on how to solve the problem. INFORMATION: The shops are open 7 days a week. Normal time is from 8:30 to 16:30, Mondays to Fridays (160 hours per month). (6) e Overtime is from 16:30 to 18:30 Mondays to Fridays and 9:30 to 12:30 on weekends (56 hours per month) e Overtime salary rate is 1,5 times the normal rate. INFORMATION GAMALAKHE MBALI JOZINI MALL MALL MALL Salesperson (age) Pearl Xolani Amanda (42 years) (27 years) (62 years) Stock on hand — 1 April 2020 50 units 50 units 50 units Selling price per computer. R4 200 R4 200 R4 200 Computers sold (before returns) 42 36 22 Returns by customers 5 12 1 Credit sales R54 600 R88 200 R21 000 Deposits from cash sales R79 800 R12 600 R67 200 Hours worked (normal time) 154 hours 117 hours 102 hours Overtime hours 20 hours 52 hours 2 hours Rent expense (per month) R6 000 R8 000 R5 500 Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC QUESTION 3 MANUFACTURING (50 Marks; 40 Minutes) 3.1 CONCEPTS Choose the cost category for examples below. Write only the cost category next to the question number (3.1.1- 3.1.4) in the ANSWER BOOK. Selling and distribution cost; direct labour cost; administration cost; factory overhead cost; direct material cost. 3.1.1 Electricity paid for factory buildings. 3.1.2 Salaries paid to the sales personnel 3.1.3 Cost of raw materials used in the production process 3.1.4 Sundry expenses paid for the office. (4 X 1) (4) 3.2 MSELENI MANUFACTURERS You are provided with information relating to Mseleni Manufacturers for the year ended 29 February 2020. The business produces one type of air conditioner. REQUIRED: 3.2.1 Calculate the Direct Material Cost (7) 3.2.2 Calculate the Factory Overhead Cost (16) 3.2.3 Prepare the Production Cost Statement for the year ended 29 February 2020. (13) INFORMATION: A. The following balances appeared among others in the books of the business: 29 February 2020 1 March 2019 Raw material stock R86 000 R180 000 Work-in-process stock ? R150 000 Finished good stock R170 000 R500 000 Indirect material: factory R18 000 R25 000 Administration cost R13 000 - B. Summary of transactions: Raw material purchased R400 000 Raw materials returned to suppliers R7 000 Carriage on raw materials paid R5 000 Total salaries and wages paid R350 000 Water and electricity paid R98 000 Factory indirect materials purchased R35 000 Factory sundry expenses paid R49 800 Rent expenses paid R56 500 Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC C. The salaries and wages amount is distributed as following: • 50% to employees who work directly on the production process • 20% to indirect labour • 15% to administrative staff • 15% to sales and distribution staff The employer contributes 8% to the pension fund and 1% to the UIF on behalf of each employee. D. Water and electricity • The water and electricity bill is shared among the factory, administration and sales section in the ratio 4:3:1. E. Indirect materials: • Indirect materials costing R9 000 were transferred from the factory to the administration office. F. Rent expenses • Rent amount for February 2020, R 5 500 will only be paid in March 2020. • Rent is allocated according to floor area as follows: Factory 1 200m², administration 100m² and selling and distribution 300m² G Factory depreciation amounted to R32 000 H. Cost of sales was correctly calculated at R1 200 000. Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC 3.3 MAMMA’S BAKERY The following information was extracted from the books of Mamma’s Bakery for the year ended on 29 February 2020. The bakery is owned by Alwande Mbatha. REQUIRED: 3.3.1 Calculate the Break-even point for 2020. (4) 3.3.2 Explain why the owner should be concerned about the break-even point. Provide TWO points. (4) 3.3.3 Provide ONE reason for the decrease in the Direct Material Cost. (2) INFORMATION: Fixed and variable cost 2020 2019 Total Per unit Per unit Variable costs: Direct Materials R91 500 R7.50 R8.00 : Direct Labour R73 200 R6.00 R5.70 : Selling & Distribution R42 700 R3.50 R3.40 R207 400 R17.00 R17.10 Fixed costs : Factory overheads R63 440 R5.20 R4.70 : Administration R34 160 R2.80 R2.50 R97 600 R8.00 R7.20 Break-even point ? 7 795 Units produced 12 200 11 800 Selling price (per unit) R25 R25 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC QUESTION 4 FIXED ASSETS AND INTERNAL CONTROL (30 Marks; 24 Minutes) 4.1 FIXED ASSETS The following information relates to the fixed/tangible assets of Babanango limited for the year ended 31 May 2020. REQUIRED: 4.1.1 Calculate the amounts indicated by (i)-(iii). Show the workings in the space provided in the ANSWER BOOK. (11) 4.1.2 Prepare the Asset disposal Account for the computer sold on 30 September 2019. (9) INFORMATION: A. Information from the financial statements for the year ended 31 May 2020. FIXED/TANGIBLE ASSETS LAND AND | VEHICLES | EQUIPMENT BUILDINGS Carrying value on 1June 2019 2.500 000 82 000 51 840 Cost 2 500 000 552 000 90 000 Accumulated depreciation 0 (470 000) (38 160) Movement Additions (i) 850 000 Disposals at carrying value 0 0 Depreciation i} (ii) Carrying value on 31 May 2020 ___ 3 200 000 iii Cost 3 200 000 Accumulated depreciation 0 B. The business has three computers; all three computers were purchased on 1 December 2016 for R30 000 each. A computer was sold for R6 128 cash to Razz traders on 30 September 2019. c. The new vehicle was purchased on 31 August 2019. D. The business provides for depreciation on its fixed assets as follows: e On vehicles at 15% p.a. on cost e On equipment at 20% p.a. on the diminishing balance method. Copyright reserved Please turn over

Downloaded from hlayiso.com Acc Mid-Year Exam 202 NSC 4.2 INTERNAL CONTROL You are the internal auditor of Juba supermarket. The owner has asked you to investigate the control of trolleys and baskets used in the business. 4.2.1 Explain how the Fixed Assets Register will assist you in your duties as internal auditor. Provide ONE point. (2) 4.2.2 The stock of trolleys and baskets is classified as a fixed asset. Give ONE suitable reason for this. (2) 4.2.3 The owner has received numerous complaints from his customers about the trolleys and baskets. On a busy day the business often has up to 510 customers in the shop at the same time. Identify and explain THREE major problems (with figures) relating to the control of the trolleys and baskets. In EACH case, provide a valid, practical solution to improve the control over these assets. (6) INFORMATION: The following information refers to the trolleys and baskets of the business: TROLLEYS BASKETS Number of units on hand on 1 May 2019 170 150 Additional units purchased during the financial year at R2 100 each for the trolleys and R300 each for the 115 40 baskets. Number of damaged units written off during the financial year. 25 80 Number of units on hand as per physical count on 30 April 2020 230 110 Repair and maintenance cost for units during the financial year. R1 080 R10 200 Number of trolley controllers 3 - Salary per trolley controller R1 200 - 30 TOTAL MARKS: 150 Copyright reserved Please turn over

Downloaded from hlayiso.com Acc 20: é NSC Mid-Year Exam GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit X 100 Gross profit, X 100 Net profit before tax X 100 Sales 1 Cost of sales 1 Sales 1 Net profit after tax X 100 Operating expenses X 100 rating profit X 100 Sales 1 Sales 1 Sales 1 Total assets : Total liabilities Current assets : Current liabilities (Current assets — Inventories) : Current liabilities Average trading stock X 365 Cost of sales 1 (Trade and other receivables + Cash and cash equivalents) : Current liabilities Average debtors X 365 Credit sales 1 Cost of sales Average trading stock Trading stock X 365 Cost of sales 1 Average creditors X 365 Credit purchases 1 Average creditors X 365 Cost of sales 1 Long-term liabilities : Shareholders’ equity Net profit after tax X 100 Number of issued shares 4 Ne Average shareholders’ equ 100 “1 let income after tax x ity Net income after tax + Interest on loans Average Shareholders’ equity + Average Long-term liabilities 410 1 Shareholders’ equity X 100 7 Number of issued shares Number of issued shares Dividends forthe year_ X 100 1 10, Dividends pershare X 100 Earnings per share 1 Copyright reserved Please turn over