Accounting Grade 10 P1 North West November 2019 QP (Eng)

Downloaded from hlayiso.com PROVINCIAL ASSESSMENT GRADE 10 ACCOUNTING P1 NOVEMBER 2019 MARKS: 150 TIME: 2 hours This question paper consists of 9 pages, a 6-page answer book and a formula sheet. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 2 NW/November 2019 NSC – Grade 10 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. A FORMULA SHEET for financial indicators is provided at the back of this question paper. You may use this if necessary. 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 1: 30 marks; 25 minutes Topic of the question: This question integrates: Concepts GAAP Accounting Concepts Accounting Equation Accounting Equation QUESTION 2: 55 marks; 45 minutes Topic of the question: This question integrates: Year-end adjustments Income Statement Income Statement of a sole trader QUESTION 3: 40 marks; 30 minutes Topic of the question: This question integrates: Concepts Balance Sheet and Year-end adjustments notes Balance Sheet and notes QUESTION 4: 25 marks; 20 minutes Topic of the question: This question integrates: Concepts Analysis and Calculation of financial indicators interpretation Interpretation of financial indicators Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 3 NW/November 2019 NSC – Grade 10 QUESTION 1: CONCEPTS AND ACCOUNTING EQUATION (30 marks; 25 minutes) 1.1 GAAP PRINCIPLES Choose a term from COLUMN B that matches the description in COLUMN A. Write Only the letter (A–E) next to the question number (1.1.1–1.1.5) in your ANSWER BOOK, for example 1.1.6 G. (5) COLUMN A COLUMN B 1.1.1 This principle means that the person A Historical cost drawing up the financial statements will principle assume that the business will continue to trade. 1.1.2 The income generated during the B Business entity particular financial period, and the rule expenses incurred to generate the income for the period, should be taken into account in that specific financial period. C Prudence principle 1.1.3 According to this principle, information that is not important and that will not influence the decision-making process, D Materiality principle does not have to be reflected in the financial statements. (e.g Expenses for example cleaning materials could therefore be included in the account E Matching principle Sundry Expenses.) 1.1.4 Fixed assets purchased are recorded in the Asset account, reflecting the amount F Going-concern that each asset originally cost. 1.1.5 Money lost due to theft of stock is written off, even though there is a possibility that it may be recovered in future. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 4 NW/November 2019 NSC – Grade 10 1.2 ANALYSIS OF TRANSACTIONS The transactions appeared in the books of Leo Stores. The business maintains a gross profit mark-up of 50% on cost. REQUIRED: Analyze the following transactions according to the headings provided in the ANSWER BOOK. (25) Assume that Bank balance is favourable for all the transactions. Example: The owner took goods for personal use, R500. TRANSACTIONS: 1.2.1 Leo Stores pay their account/debt of R3 000 to a creditor. 1.2.2 A debtor returned goods, cost R500, to the business. 1.2.3 Purchased trading stock on credit, R14 000 less 8% trade discount. 1.2.4 A creditor charged interest of R25 on the overdue account which Leo Stores had forgotten to pay on time. 30 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 5 NW/November 2019 NSC – Grade 10 QUESTION 2: INCOME STATEMENT (55 marks; 45 minutes) The information set out below was taken from the books of RAV Distributors. Their financial year ends 28 February 2019. The percentage mark-up used by RAV Distributors is 75%. REQUIRED: Prepare the Income Statement of RAV Distributors for the year ended 28 February 2019. (55) INFORMATION: Pre-adjustment Trial Balance of RAV Distributors on 28 February 2019 Debit Credit Balance Sheet Accounts Section Capital 784 490 Drawings 403 860 Loan: DEF Bank (18% p.a.) 235 000 Land and Buildings 910 000 Equipment 140 000 Accumulated Depreciation on Equipment 52 000 Trading Stock 16 500 Debtors Control 20 720 Bank 55 500 Creditors Control 135 000 Nominal Accounts Section Sales 875 000 Cost of Sales 400 000 Debtors’ Allowances 13 000 Wages 20 300 Commission Income 8 400 Salaries 95 250 Rent Income 37 100 Discount Allowed 800 Discount Received 880 Insurance 9 800 Bank Charges 1 210 Bad Debts 2 300 Telephone 12 560 Water and Electricity 11 700 Stationery 10 800 Sundry Expenses 3 570 2 127 870 2 127 870 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 6 NW/November 2019 NSC – Grade 10 Adjustments and additional information: A. Commission of R4 000 has not yet been received by the business. B. The telephone account for February 2019 was not recorded, R1 450. C. The business made a donation of stock with a selling price of R1 400 to a local crèche before stock count. No entry was made of this transaction. D. A physical stock count on 28 February 2019 revealed the following on hand:  Trading Stock R15 500  Stationery R460 E. A debtor who owed R1 200 was declared insolvent. A dividend of 40 cents to the rand was received and recorded. Write off the remaining debt as irrecoverable. F. An amount of R2 000 received from B. Ben, a debtor whose debt was written off as irrecoverable the previous year, was credited to Debtors control and to the account of B.Ben. Correct the error. G. The February Bank Statement was received after the pre-adjustment trial balance was drawn up. The following must be adjusted:  Dishonoured cheque, R2 000. This was in settlement of H. Heidi's account of R2 040.  Interest on favourable bank balance, R480.  Bank charges, R183. H. The insurance amount includes an annual premium of R2 160 paid on 1 July 2018. I. The rent increased by R400 per month from 1 November 2018. The rent for March 2019 was received and deposited. J. Interest on the loan from DEF Bank has not been entered yet. Interest is capitalized. The loan statement received from DEF Bank reflected the following: Balance on 1 March 2018 270 000 Repayments made during the year 85 000 Interest ? Balance on 28 February 2019 235 000 K. Depreciation on equipment is calculated at 10% p.a. on the cost price method. New equipment was bought on 1 September 2018 for R24 000. This transaction was recorded. 55 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 7 NW/November 2019 NSC – Grade 10 QUESTION 3: CONCEPTS AND NOTES TO THE BALANCE SHEET (40 marks; 30 minutes) 3.1 Indicate whether the following statements are TRUE or FALSE. 3.1.1 Current assets include items that are expected to be converted into (1) cash within one year. 3.1.2 Non-current liabilities contain debts that will be settled within one (1) year. 3.1.3 Creditors for salaries and SARS (PAYE) will be shown under current assets. (1) 3.2 Thabo Sepere owns a shoe store namely Thabo Shoes. You are provided with an extract from the Post-adjustment trial balance on 30 September 2019. The bookkeeper has not yet taken all the adjustments into account. Note: The Net profit for the year is R774 300. REQUIRED: Use the trial balance and additional information to prepare the following notes to the balance sheet at 30 September 2019: 3.2.1 Stock (4) 3.2.2 Trade and other receivables (5) 3.2.3 Owner’s equity (7) 3.2.4 Trade and other payables (6) 3.2.5 Statement of financial position (Balance sheet) (15) EXTRACT FROM POST-ADJUSTMENT TRIAL BALANCE OF THABO SHOES ON 30 SEPTEMBER 2019 Balance sheet accounts section Debit Credit Capital (01 October 2018) 1 036 470 Drawings 33 870 Trading stock 105 000 Fixed Assets 1 933 000 Debtors control 80 500 Fixed Deposit 649 350 Loan: ASA 120 000 SARS (PAYE) 4 600 Accrued income (interest on fixed deposit) 8 700 Accrued expenses (interest on loan) 5 500 Consumable goods on hand (stationery) 900 Bank 710 000 Cash Float 8 500 Petty Cash 5 000 Creditors Control 55 000 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 8 NW/November 2019 NSC – Grade 10 ADJUSTMENTS NOT YET BROUGHT INTO ACCOUNT: A. Thabo Sepere transferred a vehicle to the value of R100 000 on 1 January 2019 to the business. It is not recorded yet. B. On 30 September 2019, after physical stock-taking was performed, Thabo took shoes with a cost price of R2 000 for his personal use. This is not yet recorded. C. An installment of R20 000 is annually repaid on the loan at ASA on 31 December. D. The rental income account reflects a total of R102 000. It includes rent for three months received in advance. E. To much insurance was paid, R950. This amount must be used to settle the insurance due the following year. F. An amount of R500 was incorrectly credited against the debtors control account. This amount was received from C. Els, a debtor, whose account was already written off as bad debts in 2017. 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 9 NW/November 2019 NSC – Grade 10 QUESTION 4: ANALYSIS AND INTERPRETATION (25 marks; 20 minutes) Use the information given for Beatle Bailey to answer the questions correct. Post closing Trail Balance on 30 June 2019 2018 Tangible assets 222 664 203 804 Fixed Deposit: ABSA (10%) 45 000 45 000 Inventory 54 070 42 120 Trade and other receivables 34 700 25 328 Cash and Cash equivalents 1 650 6 200 Owner’s equity 271 430 180 000 Mortgage bond: First Bank (15% p.a.) 60 000 120 000 Trade and other payables 26 654 22 452 Additional information: Cost of Sales 600 000 Operating expenses 158 000 Net profit 130 000 REQUIRED: 4.1 Calculate Sales if the firm uses a markup of 50% on cost. (2) 4.2 Calculate the return on average owner’s equity. Should the owner be satisfied with this return? Give a reason for your answer. (6) 4.3 Calculate the current ratio for 2019. (5) 4.4 Calculate the acid test ratio for 2019. (4) 4.5 Calculate the degree of solvency on 30 June 2019. (8) 25 TOTAL 150 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting/P1 10 NW/November 2019 NSC – Grade 10 GRADE 10 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 Operating expenses X 100 Operating profit X 100 Sales 1 Sales 1 Current assets : Current liabilities (Current assets – Inventories) : Current liabilities (Trade and other receivables + Cash and cash equivalents) : Current liabilities ___Net profit__ X 100 Total assets : Total liabilities Owner’s equity 1 Copyright reserved Please turn over