# Accounting Grade 12 Limpopo March 2023 Paper & Memo

> Grade 12 Accounting question paper and memo from the Limpopo March 2023, 25 pages. Read online or get the free PDF download.

- Page: https://www.hlayiso.com/library/limpopo-accounting-grade-12-march-2023-qp-and-memo-1/17c6e61c-ab72-4486-9322-59626e6818cd
- Updated: 2026-09-27
- Subject: Accounting
- Grade: Grade 12
- Document type: Question paper and memo
- Year: 2023
- Exam period: Limpopo March
- Curriculum: CAPS
- Pages: 25

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## About this document

Accounting · Grade 12 · Limpopo March · 2023. Question paper and memorandum, 25 pages. Read online or download the PDF.

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### Page 1

LIMPOPO

PROVINCIAL GOVERNMENT
REPUBLIC OF SOUTH AFRICA

DEPARTMENT OF

EDUGATION

NATIONAL
SENIOR CERTIFICATE

DATE OF ADMINISTRATION : 17 MARCH 2023
DURATION : 1,5 HOUR
MARKS : 100

This question paper consists of 9 pages,
a formula sheet and a 7-page answer book.

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INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

de Answer ALL the questions.

2: A speciaLANSWER 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 appropriate, calculations must be done to one decimal point.

1 Use the information in the table below as a guide when answering the question

paper. Try NOT to deviate from it.

QUESTION 1: 48 marks; 43 minutes

Topic of the question: This question integrates:

Financial accounting
Income Statement and Audit report

Financial Statements: Income
statement, Notes and Audit
report

QUESTION 2: 30 marks; 27 minutes

Topic of the question: This question integrates:

Financial accounting
Cash Flow Statement
Financial Indicators

Cash Flow Statement and
Financial Indicators

QUESTION 3: 22 marks; 20 minutes

Topic of the question: This question integrates:

Financial Accounting
Analysis and interpretation! Concepts

of Financial Statement Interpretation of Financial Information

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Accounting Controlled test 1 Limpopo/DoE.
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QUESTION1 INCOME STATEMENT AND AUDIT REPORT (48 marks; 43 minutes)

MALEKA LTD

The information below relates to Maleka LTD. The financial year ended on 28 February 2022.

REQUIRED:

1.1 Complete the statement of Comprehensive Income (Income Statement) for year (40)
ended 28 February 2022.

INFORMATION.

Extract from the Pre — Adjustment Trial Balance on 28 February 2022.
Balance Sheet Accounts Section Debit Credit
Ordinary share capital 2 496 000
Retained income (1 February 2022) 1 480 000
Loan : FNB Bank 1 470 000
Land and Buildings 3 000 000
Vehicle at cost 800 000
Equipment at cost 200 000
Accumulated depreciation on vehicles 680 000
Accumulated depreciation on equipment 37 000
Fixed deposit: Capitec Bank 1 186 000
Creditors control 97 500
Debtors Control 186 000
Trading stock 1 050 300
Bank 42 550
SARS (income tax) 500 000
Provision for bad debts 3 240
Consumable on hand ( Packing material-1 820

March 2021)
Nominal Accounts Section

Sales 8 800 000
Cost of sales ?
Debtors allowance 19 200
Directors fees 550 000
Audit fees 188 410
Salaries and wages 681 600
Rent income 70 500
Interest on fixed deposit 80 000
Interest on loan ?
Advertising 60 000.
Insurance 14 700
Bad debts 6 730
Packing material 15 000
Sundry expenses ?

Ordinary share dividends ?

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ADJUSTMENTS AND ADDITIONAL INFORMATION.

A. The business prices its goods at a mark-up of 60% on cost. Trade discount of
R360 000 was allowed on invoices to certain customers.

B. A creditnote for R49 600 issued to a debtor, dated 25 February 2022, was
recordedras an invoice.

C. A debtor. P.Malan, with outstanding balance of R42 000, has left the country. His
account must be written off.

D. The provision for bad debts must be adjusted to 5% of the outstanding debtors.

E. The physical stocktaking on 28 February 2022 reflected the following stock on
hand:
e Trading stock R1 002 000
e Packing material R 6 020

F. One employee received a double salary by mistake from Salary Journal for
February 2022. This must be reversed. The employee made a direct deposit to
the business account as a refund on 28 February 2022. His normal salary details
are as follows:

Deductions Employers Net salary
contribution

PAYE Pension Pension

R3 000 R2 000 R4 000 R15 000

Employer’s contributions are part of salaries and wages account.

G. Advertising of R40 000 consists of a month to month contract with local radio
station. Advertising was paid for 13 months. From 1 November 2021, the contract
rate was decreased by10%.

H. Make provision for depreciation as follows:
e Onvehicles at 15% p.a on cost price.
e On equipment at 10% p.a on diminishing balance.
NOTE: A new computer was purchased on credit on 1 June 2021 for
R60 000. This has already been recorded.

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Accounting Controlled test 1 Limpopo/DoE.

ee

|. Share Capital:

Authorised share capital consists of 1000 000 ordinary shares.

600 000 shares were issued on 1 March 2021

200 000 new ordinary shares were issued 0 1 September 2021.

400 000 ordinary shares were repurchased on 1 February 2022 at R1.40
above the average issue price R4.52) The transaction was properly
recorded).

J. Dividends:

Interim dividends of 30 cents per share was paid on 30 August 2021
Final dividends of 40 cents per share was declared on 28 February 2022.
Shares bought back on 1 February 2022 also qualify for the final dividends.

K. Operating profit is 15% on turnover.

L. Income tax for the financial year was calculated as R360 000. This is 30% of the
net profit before tax.

1.2 Audit report

You are provided with an extract from the audit report of the independent auditors of
Cooper Ltd. Read the report and answer the questions that follow.

Point 1

Point 2

Point 3

To Shareholders

We have audited the annual financial statements of Cooper Limited for
the year ended 30 June 2012, set out on pages 25 to 51.....

Basis for Opinion

An amount that was shown as additions to Land and buildings was for
revaluations of the Buildings. No audit evidence was provided.
Opinion

In our opinion, the financial statements fairly present the financial
position of the company at 30 June 2022, except for the increase in the
value of the fixed assets in the Balance Sheet.

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REQUIRED:

1.2.1 Explain why the auditors did specifically address the report to
shareholders?

1.2.2 Referito point 1.

Explain why the independent auditors referred to pages 25-51 in the
report.

1.2.3 Refer to point 2.

The directors claimed that the value of the buildings increased over the
years and that the value must be increased and shown as additions in
the fixed asset note.

As the independent auditor, what advice would you give? Provide ONE
point.

1.2.4 Refer to point 3.

e The company received a/an (unqualified/qualified/disclaimer) audit
report.

e Give a reason for your answer.

(2)

(2)

(2)

(1)
()

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Accounting Controlled test 1
nice

Limpopo/DoE.

QUESTION 2 (30 marks; 27 minutes)

CASH FLOW STATEMENT AND FINANCIAL INDICATORS

You are provided with information relating to Maboneng Limited. The financial year-
end is on 31 October 2022. New shares were issued on the first day of the financial

year
REQUIRED:

2.1 What is the main purpose of a Cash Flow Statement?

INFORMATION:

(2)

2.2 Complete the Cash Flow Statement for the year ended 31 October 2022. Show (21)
ALL workings in brackets
2.3. Calculate the following financial indicators on 31 October 2022:

e % Gross profit on sales (2)

¢ Acid-test ratio (3)

e Debt-equity ratio (2)

A. The following information was extracted from the Income Statement for the

year ended 31 October 2022:
Sales 1 750 000
Cost of Sales (800 000)
Gross Profit 950 000
Interest on loan (all capitalised) 175 500
Income tax 375 000
Net profit after tax 975 000

B. Information extracted from the Balance Sheet on 31 October:
2022 2021

Current assets 4 804 000 2 820 000
Inventories 1 437 500 1 656 250
Trade and other receivables (see D) 1075 000 956 250
Cash and cash equivalents 2 291 500 207 500
Ordinary shareholders' equity 4 450 000 4000 000
Ordinary share capital (see F) 3 450 000 3 150 000
Retained income 1 000 000: 850 000
Loan: Freeport Bank (12% p.a.) 2 000 000 1 375 000
Current liabilities 1 450 000 1 262 500
Trade and other payables (see E) 1 450 000 1 262 500

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C. Fixed/Tangible assets note:
Land and hicl P
buildings Vehicles Equipment
Carrying value at beginning of 3000000] 660.000 157 500
financial year
‘Cost 3 000 000 900 000 210 000
Accumulated depreciation (e) (240 000) (52 500)
Movements
Additions at cost 0 0 48 000
Disposals at carrying value 500 000 82 000 0
Depreciation 0 132 000 (55 500)
Carrying value at end of 2500000} 446000] 150000
financial year
Cost 2 500 000 750 000 258 000
Accumulated depreciation 0 (304 000) (108 000)

Additional information in respect of fixed assets:

* A vehicle was sold at its carrying value on the LAST day of the financial year.
Depreciation is written off on vehicles at 20% p.a. on the diminishing-balance

method.

* Land and buildings were sold at cost during the financial year.

D. Trade and other receivables include: 31 October 31 October
2022 2021
SARS: Income tax R22 500 0
E. Trade and other payables include: 31 October 31 October
2022 2021
SARS: Income tax fe) R27 500
Shareholders for dividends R450 000 R385 000

F. Details of ordinary share capital:

* Ordinary share capital at the beginning of the 2022 financial year consisted of

700 000 ordinary shares with a total value of R3 150 000.
* On 1 November 2021, 50 000 additional shares were issuedyat R6,00 each.
* There were no further changes to share capital.

G. The dividends (interim and final) for the financial year ended 34-October 2022

amounted to R825 000.

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Accounting Controlled test 1 Limpopo/DoE.
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QUESTION 3 INTERPRETATION OF FINANCIAL INFORMATION (22 marks; 20 minutes)

MACHETE LIMITED
You are provided with information from Machete Limited. The company is registered with
authorised Share Capital of 2 000 000 shares. 60% of this shares were already issued.

REQUIRED:

3.1 The CEO, Nick Petje, currently owns 40% of the issued shares. The directors of the
company decided to issue 50% of the unissued shares in July 2022.
3.1.1 Calculate the minimum number of shares that Nick must purchase in July
2022 to become the majority shareholder (3)

3.1.2 Nick wants to purchase the additional shares at R6 per share without
Advertising the shares to the public. Give TWO reasons why you
would not approve this arrangement. (4)

3.2 The directors are proposing that the business operations be expanded in the
New financial year. One of the directors suggested that they finance the
expansions by taking a loan of R1 000 000, instead of issuing new shares to
the public. Quote and explain TWO financial indicators to support his
Opinion. (6)

3.3 Bongani is a shareholder in Machete Limited. He owns 32 000 shares which he
purchased two years ago at R4,75 each.

3.3.1 Calculate the amount of dividends Bongani would earn for the financial
year ending 31 October 2022. (2)

3.3.2. Should Bongani be satisfied with the dividend policy of Machete Limited?
Quote and explain relevant financial indicators to support your answer. (3)

3.3.3 Bongani wants to sell his shares in Machete Limited and invest his funds in
an alternative investment. You disagree with him. Quote and explain ONE
relevant financial indicator, other than dividends, to discourage him from
selling his shares. (4)

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INFORMATION:

Financial indicators for the past two financial years ending October:

2022 2021
Current;ratio 3,10:1 2,23 1
Acid-testfatio 0,321 09254
Average debtors collection period 35 days 28 days
Average Creditors payment period 65 days 90 days
Earnings per share 130 cents 94 cents
Dividends per share 110 cents 75 cents
Return on average shareholders’ equity 24,1% 15%
Debt-equity ratio 0,44:1 0,34:1
Return on average capital employed 26% 18%
Net asset value per share 593 cents 571 cents
Prices of Machete Ltd shares on the JSE 950 cents 725 cents
Interest on fixed deposit 6,5% 6,5%
Interest rate on loans 13% 13%

TOTAL 100 MARKS

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Accounting Controlled test 1
ice

Limpopo/DoE.

GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET

Gross _profit x 100
Sales 1

Gross _ profit x 100
Cost of sales 1

Net profit before tax x 100
Sales 1

Net profit after tax x 100
Sales al.

Operating expenses x 100
Sales al

Operating profit x 100
Sales 1

Total assets : Total liabilities

Current assets : Current liabilities

(Current assets — Inventories) : Current liabilities

Non-current liabilities : Shareholders' equity

(Trade & other receivables + Cash & cash equivalents) : Current liabilities

Average trading stock x 365
Cost of sales 1

Cost of sales
Average trading stock

Average debtors x 365

Average creditors x 365

Credit sales 1 Cost of sales 1
, Net income aftertax x 100
Net income after tax 2100 Number of issued shares 1

Average shareholders’ equity al

(*See note below)

Net income before tax + Interest on loans x 100
Average shareholders’ equity + Average non-current liabilities 1
Shareholders' equity x 100 Dividends forthe year x 100
Number of issued shares 1 Number of issued shares 1
Interim dividends x 100 Final dividends x 100
Number of issued shares 1 Number of issued shares 1

Dividends per share x 100
Earnings per share 1

Dividends forthe year x 100
Net income. after tax 1

Total fixed costs

Selling price per unit — Vi

ariable costs per unit

NOTE:

* In this case, if there is a change in the numbe!

weighted-average number of shares is used in

t of issued shares during a financial year, the
practice.

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LIMPOPO

PROVINCIAL GOVERNMENT
REPUBLIC OF SOUTH AFRICA

DEPARTMENT OF

EDUCATION

NATIONAL
SENIOR CERTIFICATE

GRADE 12

ANSWER.BOOK

NAMES ciccccccsi ccs BO 2 oko cactseeceeededet aieie See
SCHOOL. ........ccccne cece ttt tUURWanan esses Dee eeeeeeeeeeeeeeneeeeeneeeeeseeensneeeens
QUESTION MARKS MARKS INTERNAL EXTERNAL
OBTAINED MODERATION MODERATION
1 48
2 30
3 22
TOTAL ita

This Answer Book consists of 7 pages including the cover page.

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QUESTION 1
MALEKA LTD

1.1. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
28 FEBRUARY 2022

Sales-8-800 000

Cost ofjsales

Gross profit

Other operating income

Rent income

Provision for bad adjustment

Gross income

Operating expenses

Salaries and wages 681 600

Advertising 60 000

Bad debts 6 730

Packing material 15 000

Operating profit

Interest income

Operating profit before interest expenses

Interest expense

Net profit before taxation

Taxation

Net profit after tax

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1.2
1.2.1

1.2.2

1.2.3

1.2.4

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Audit report

Explain why the auditors did specifically address the report to
shareholders?

Explain why the independent auditors referred to pages 25-51 in
the report.

The directors claimed that the value of the buildings increased
over the years and that the value must be increased and shown
as additions in the fixed asset note.

As the independent auditor, what advice would you give? Provide
ONE point.

The company received alan (unqualified/qualified/disclaimer)
audit report.

Give a reason for your answer.

TOTAL MARKS

48

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QUESTION 2
2.1 | What is the main purpose of a Cash Flow Statement?
2
2.2 CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 1 985 500
Interest paid (175 500)
Taxation paid
Dividends paid
CASH FLOW FROM INVESTING ACTIVITIES
Fixed assets purchased
Proceeds from sale of fixed assets
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from the sale of shares
Change in loan
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING 21

CASH AND CASH EQUIVALENTS AT END

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2.3 Calculate the following financial indicators on 31 October 2022:

e Gross Profit on sales

e /Acid-test ratio

e Debt/Equity ratio

TOTAL MARKS

30

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QUESTION 3

3.1

3.1.1

3.1.2

3.2

The CEO, Nick Petje, currently owns 40% of the issued
shares. The directors of the company decided to issue 50%
of the unissued shares in July 2022.

Calculate the minimum number of shares that Nick must
purchase in July 2022 to become the majority shareholder.

Nick wants to purchase the additional shares at R6 per share
without advertising the shares to the public. Give TWO
reasons why you would not approve this arrangement.

The directors are proposing that the business operations be
expanded in the New financial year. One of the directors
suggested that they finance the expansions by taking a loan
of R1 000 000, instead of issuing new shares to the public.
Quote and explain TWO financial indicators to support his
opinion.

Limpopo/DoE

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3.3. Bongani is a shareholder in Machete Limited. He owns 32
000 shares which he purchased two years ago at R4,75
each.
3.3.1 | Calculate the amount of dividends Bongani would earn for the
financial year ending 31 October 2022.

3.3.2 | Should Bongani be satisfied with the dividend policy of Machete
Limited? Quote and explain relevant financial indicators to
support your answer.

3.3.3 | Bongani wants to sell his shares in Machete Limited and invest
his funds in an alternative investment. You disagree with him.
Quote and explain ONE relevant financial indicator, other than
dividends, to discourage him from selling his shares.

TOTAL MARKS

22

TOTAL 100 MARKS

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LIMPOPO

PROVINCIAL GOVERNMENT
REPUBLIC OF SOUTH AFRICA

DEPARTMENT OF

EDUCATION

LIMPOPO DEPARTMENT OF EDUCATION

NATIONAL
SENIOR CERTIFICATE

GRADE 12

MARKING GUIDELINE

This question paper consists of 7 pages including the cover page

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QUESTION 1
MALEKA LTD

Limpopo DoE.

1.1. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED

28 FEBRUARY 2022

Sales(8/800 000-19 200v -99 200v)

8 681 600 M*

Costjofsales (8 681 600Y + 360 000”) x 100/160
OR (5-426 000 + 225 000v)

(5 651 000) M*

Gross profit 3 030 600 M*

Other operating income 71500 M*
Rent income 70 500v”
Provision for bad adjustment (3 240v -2 240v) 1 000M*
Gross income 3 102 100M

Operating expenses

(1 799 860) M*

Salaries and wages (681 600 -20 000v- 4000”) 657 600 M*
Advertising (60 000 — 2 880v'v) 57 120v
Bad debts (6 730 + 42 000) 48 730V
Packing material (15 000+ 820 — 6 020) 9 800v M*
Directors fees 550 000v
Audit fees 188 410v
Insurance 14 700v
Trading stock deficit (1 050 300 + 62 000Y — 1 002 000) 110 300v
Depreciation (119 999v + 14 800vv ) 134 799 M*
4500+10 300
Sundry expenses Balancing figure 28 401 4
Operating profit Candidate must use 15% on sales 1302 240
Interest income 80 000v
Operating profit before interest expenses _ Operation 1382 240M
Interest expense (182 240) v
Net profit before taxation 1 200 000Y 40
Taxation (360 000) v
Net profit after tax 840 000v

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1.2
1.2.1

1.2.2

1.2.3

1.2.4

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Audit report

Explain why the auditors did specifically address the report to
shareholders?

They are the owners of the business. VW

>————— a
Explain why the independent auditors referred to pages 25-51 in
the report.

Any valid explanation vv Part-marks for unclear / incomplete answers.

e Auditors are responsible for only parts / certain pages of the annual
report.

e They are not accountable for the other information in the annual
reports.

e Financial statements on pages 25-51 were subjected to audit /
examination.

e Additional information, such as corporate social investment
matters, is not audited.

Do not accept statistical sampling as a reason.

——————E—E— eee
The directors claimed that the value of the buildings increased
over the years and that the value must be increased and shown

as additions in the fixed asset note.

As the independent auditor, what advice would you give? Provide
ONE point.
ONE valid point “~ Part-marks for unclear / incomplete answers

e It is fraudulent to indicate revaluation as an addition

e No audit evidence exists, so there is no proof of the actual value of
the buildings

e GAAP prescribes the historical (original) cost principle when
recording assets

e Only physical acquisitions/expansions can be shown as additions

The company received afan (unqualified/qualified/disclaimer)
audit report.

Qualified v

Give a reason for your answer.
e The auditors queried the increase of the assets/in the Balance
sheet. ¥
e The financial statement fairly present the-financial position
except for the increase in the value of the fixed asset in the
Balance sheet

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QUESTION 2

21

2.2

What is the main purpose of a Cash Flow Statement?

It provides-users of financial statements with information on the inflow and outflow
of the cash-resources of the companyY “

To see-how monies were generated or spent and what the cash flow position is.
To account for the difference in opening and closing bank balances

To show management of cash

CASH AND CASH EQUIVALENTS AT END 3 2 291 500Y

CASH FLOW FROM OPERATING ACTIVITIES 625 000M
Cash generated from operations 1 985 500
Interest paid (175 500)
Taxation paid (27 500 v+ 375 000v + 22 500”) ( 425 000)

SARS (Income Tax) one part correct
425 000 27500
375 000
22 500
Dividends paid (385 000 +¥ 825 000 —Y 450 000) v (760 000) M1
OR 385 000v +375 000vY zorrect one part
9

CASH FLOW FROM INVESTING ACTIVITIES 534 000 4
Fixed assets purchased (48 000) ¥
Proceeds from sale of fixed assets

582 000M
(500 000v + 82 000”
5

CASH FLOW FROM FINANCING ACTIVITIES 925 000M A

Proceeds from the sale of shares 300 000v
Change in loan (2 000 000 - 1375000 ) 625 000V v

4
NET CHANGE IN CASH AND CASH EQUIVALENTS 2 084 000Y
CASH AND CASH EQUIVALENTS AT BEGINNING 207 500 v

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2.3

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Limpopo DoE.

Calculate the following financial indicators on 31 October 2022:

e Gross Profit on sales
950000 XxX 100
1750)000 1

= 54, 3% 10) ¥ v

e “Acid-test ratio

(1075000 +2291 500) v: 1 450 000 v
3 366 500

=2,3:1M or2,32:1 one part correct
OR
(4 804 000 - 1 437 500)”: 1 450 000V"

=2,3:1M

e Debt/Equity ratio
2 000 000: 4 450 000

=0,4:1 Vv VY (or0,5:1)

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QUESTION 3
3.1 The CEO, Nick Petje, currently owns 40% of the issued shares.

3.2

The directors of the company decided to issue 50% of the
unissued shares in July 2022.

3.1.1 —Galculate the minimum number of shares that Nick must
purchase in July 2022 to become the majority
Shareholder

40% of 1200 000 =480 000”

50% of 1600 000 = 800 000v

Nick needs 800 000- 480000 =320 000+1= 320 001M
=320 000+100=320 100

Or

51% of 1600 000 = 816 000-480 000 = 336 000

3.1.2 Nick wants to purchase the additional shares at R6 per
share without advertising the shares to the public. Give
TWO reasons why you would not approve this
arrangement.

It is unethical as these shares were not advertised/ He want
to buy these shares at a price lower than the market price/Not
allowed by law (Companies Act)/ Not allowed by law as the
shares should be advertised through prospectus/Insider
trading/Law should be applied to safeguard the integrity of the
business

The directors are proposing that the business operations be
expanded in the New financial year. One of the directors suggested
that they finance the expansions by taking a loan of R1 000 000,
instead of issuing new shares to the public. Quote and explain TWO
financial indicators to support his opinion.

Debt/Equity ratio
* It has increased from 0,34: 1 to 0,44:1.
* Company still has a low financial risk.

Return on average capital employed
* It has increased from 18% to 26%
* Company is positively geared as it exceeds the rate of
borrowing which currently is 13%.

Limpopo DoE.

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3.3

NSC

Bongani is a shareholder in Machete Limited. He owns 32 000
shares which he purchased two years ago at R4,75 each.

3.3.1

Calculate the amount of dividends Bongani would earn for the
financial year ending 31 October 2022.

32/000 x 110 cents = R35 200” M_ bne part correct

(R1,10)

3.3.2

Should Bongani be satisfied with the dividend policy of
Machete Limited? Quote and explain relevant financial
indicators to support your answer.

Yes/No

Indicator ¥ Figures “ Explanation ¥

Explanation for yes:

EPS was 130 cents and DPS was 110 cents.

(110/130 x 100) 84.6%(85%) of earnings given to
shareholders, compared to (75/94 x 100) 79,8%(80%) given
in the previous financial year. The dividends have increased
from 75 cents to 110 cents

Explanation for no:

EPS was 130 cents and DPS was 110 cents.

(110/130 x 100) 84,6%(85%) of earnings given to shareholders,

compared to (75/94 x 100) 79,8%(80%) given in the previous
financial year.

More is being paid out on dividends and less is being retained
for future expansion.

3.3.3

Bongani wants to sell his shares in Machete Limited and invest
his funds in an alternative investment. You disagree with him.
Quote and explain ONE relevant financial indicator, other than
dividends, to discourage him from selling his shares.

Financial indicator v trend ~ comparison with interest on fixed depositv ”

ROSHE improved from 15% in 2021 to 24,1% in 2022

Greater than the return on alternative investment 6,5%.

Strong performance of the company may continue inthe future
to offer greater returns to Bongani.

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