ACCOUNTING GRADE 10 NOVEMBER 2015 - Best …resources.besteducation.co.za/English/.../Nov-2015/ACCOUNTING.pdf · 1 accounting grade 10 november 2015 marks: 300 time: 3 hours this

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ACCOUNTING GRADE 10

NOVEMBER 2015

MARKS: 300 TIME: 3 HOURS

THIS QUESTION PAPER CONSISTS OF 13 PAGES INCLUDING THE COVER PAGE AND AN ANSWER BOOK OF 14 PAGES.

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INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

1. Answer ALL questions 2. A special ANSWER BOOK is provided in which to answer all questions 3. Workings must be shown in order to achieve part-marks. 4. Non-programmable calculators may be used. 5. You may use a dark pencil or blue/black ink to answer the questions

Use the information below as guideline when answering the questions.

QUESTION 1 : 36 MARKS (22 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting Accounting equation Concepts, GAAP, source documents Accounting concepts

QUESTION 2 : 29 MARKS(17 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting General Journal Concepts, GAAP, source documents Subsidiary journals

QUESTION 3 : 53 MARKS(32 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting Bookkeeping systems Concepts, GAAP, source documents Inventory Internal control

QUESTION 4 : 44 MARKS(26 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting Salaries and wages journal Concepts, GAAP, source documents

QUESTION 5 : 87 MARKS(52 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting Financial statements Balance sheet and notes

QUESTION 6 : 18 MARKS(11 minutes) TOPIC OF THE QUESTION THIS QUESTION INTERGRATES WITH: Financial accounting Financial statements Analysis and interpretation

QUESTION 7 : 33 MARKS (20 minutes) THIS QUESTION INTERGRATES WITH: Financial accounting Costing and VAT Concepts, Ethics

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QUESTION 1 (36 MARKS: 22 MINUTES)

Accounting equation and concepts

1.1 Analyse the following transactions using the table below by showing Account debited,

Account credited and the effect on the accounting equation (A = O + L). Assume that the

bank balance is favourable for all transactions.

Use the example to guide you.

Example: Paid the telephone account by cheque no.147, R700

NO. ACCOUNT DEBITED

ACCOUNT CREDITED

A O L

e.g. Telephone Bank -700 -700 0 TRANSACTIONS:

1. Sold goods on account to S.Mnini, a debtor for R960 (mark up 60% on cost). 2. Purchased merchandise on credit from Voda Wholesalers for R4 500. 3. Charged debtor, M.Mahlangu, interest at 10% p.a. for three months on his overdue

account, R320. 4. Received R550 from debtor S.Mnini. 5. Paid Municipality for lights and water by cheque, R850.

[24

1.2 Fill in the missing words or amounts

a. Expenses decrease owners’ equity on the ________ side. b. Goods sold on credit to customer are recorded in the _________ Journal. c. _____________ is the source document used when trading stock is bought for cash. d. R100, 00 is 10% of ___________. e. The GAAP principle used when only material items are shown in the financial

statements is called ________________. f. All money received by the business is recorded in the ____________Journal.

[12]

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General Journal

Vukas Bakers has the following transactions for March 2015.The owner is unsure as to which entries must be entered into the General Journal. Use the given transactions to complete the General Journal in the books of Vukas Bakers. Narrations may be omitted.

Transaction for March 2015

3. B.Thompson has not paid his account of R1 200 for over three months. It has been decided to charge him interest of 12% per month.

7. L.Welman returned stock costing R500. This has been incorrectly recorded in R.Welman’s account. The error needs to be corrected.

14. A debtor, S.Tyson, who had been previously written off, paid his account of R230. 16. The bank returned a cheque for R470 received from A.Wolfe in settlement of his account

of R500. The cheque was marked R/D insufficient funds. 22. The owner took stock costing R400 home for personal use. 29. Repairs costing R2 000 was incorrectly debited to the Equipment account. 31. S.Naidoo has been declared bankrupt. She owes R900 to Vukas Bakers. She was able to

pay 30 cents in each rand and the remaining amount to be written off.

QUESTION 3 (53 MARKS: 32MINUTES)

Bookkeeping systems, inventory and debtors

3.1 FORMAL AND INDIGENOUS BOOKKEEPING SYSTEMS

Required

Study the statements in the table below. Decide which statements apply to FORMAL BUSINESS and which apply to INFORMAL BUSINESS. Indicate with a CROSS (X) in the relevant column.

STATEMENT FORMAL BUSINESS

INFORMAL BUSINESS

1. Has to register with Government departments

2. Cannot function without a trading license

3. Business premises can be moved from one place to another without notice

4. Must be registered with SARS for tax purposes.

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5. Not aware of whether a profit or loss is made, just look at cash available

6. Records of source documents, transactions are sometimes kept in note books just to remind the owner.

7. Always aware of whether the business has made a profit or not.

8. Adheres to principles of GAAP. 9. Records of source documents

and books are kept safe and must always be available.

10. Format of recording depends on the person running the business.

[10]

3.2 INVENTORY

You are provided with the Trading Stock account taken from the Ledger of Lebogang Traders.

REQUIRED: Study the account and then answer the questions that follow.

INFORMATION:

General Ledger of Lebogang Traders Trading Stock

2015 July

01 Balance b/d 16 220 2015 July

31 Creditors control (c) 500

31 Bank CPJ 8 770 ? GJ 400 Creditors control (a) 6 420 Cost of sales CRJ 9 100 Cost of sales (b) 200 Cost of sales (d) 8 400 Balance c/d 13 190 31 590 31 590 Aug 1 Balance b/d 13 190

3.2.1 Indicate the names of the journals associated with the letters (a), (b), (c) and (d).in

the folio column. (4) 3.2.2 Give one possible explanation for the entry of R400 (1) 3.2.3 Give one possible explanation for the entry of R200 (1) 3.2.4 What is the value of merchandise sold for cash if the business uses a mark-up of

50% on cost? (4)

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3.2.5 Give one possible way in which the business can verify the closing balance on 31 July 2015 of R13 190 (1)

3.2.6 Read the following extract and answer the questions that follow: Mylene, an employee of the business, has offered to maintain the computers of the business at a reduced charge. Mylene has excellent technical knowledge of computers from her previous job. She buys parts required to fix computers from a local supplier at discounted prices. Mylene takes the replaced parts and uses them in a small repair business that she runs from her home. She also sometimes brings parts from her business to use in fixing the business computers, the cost of which she includes in her fee.

a) In your opinion, is Mylene committing a crime? Give two reasons for your answer. (5)

b) What internal control measures can the management of the business implement to monitor the maintenance of the computers by Mylene? Name two. (4)

3.3 DEBTORS CONTROL You are provided with information from the books of Itumeleng Furnishers REQUIRED: DEBTORS CONTROL for June 2015

x Show workings in brackets to earn part marks. x Also show folio references for Journals. x INFORMATION

1. The debtors list on 1 June 2015 reflected a balance of R31570. 2. Furniture was sold as follows:

x For cash………………………………………………R45 500 x On credit …………………………………………… R55 350

3. Receipts totaling R44 460 were issued to debtors on settlements of their accounts. This included R660 received from the insolvent estate of M.Shilowa. His estate paid 60 cents in a rand and the balance is to be written off. Total cash discount of R2 040 was granted to the debtors.

4. Total goods returned: x To suppliers……………………………………… R2 500 x By debtors………… ……………………………….R4 590

5. Cheques issued to suppliers on settlement of their accounts. R39 600. 6. The bank statement received on 25 June reflected the following:

x Direct transfer by a debtor, T Lekota, R5 660; and x Dishonored cheque R540 (this cheque was originally received from a

debtor, P Motsepe, in settlement of his account of R610).

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7. A debtor C Ramaphosa is to be charged interest for 4 months at 12% per annum on his overdue account of R2 700.

8. The Petty cash Journal reflects R350 paid to KK Deliveries in respect of delivery expenses paid on behalf of a debtor. [23]


Wages and salaries

The following information in respect of an employee, Joyce Banda, was extracted from the records of Romans Pizza Traders for the week ended 25 October 2015: Basic weekly wage 45 hours @ R40 per hour Overtime rate 1.5 times the normal rate Hours worked as per clock card 56 DEDUCTIONS: Pension fund …………………………… 8% of normal earnings Medical aid fund…………………………R150 per week

SARS (PAYE)……………………………19% of gross earnings

EMPLOYER’S CONTRIBUTIONS: Pension fund ……………R1, 50 for every R1 contributed by the employee Medical aid fund………...R1, 50 for every R1 contributed by the employee

1 What is Joyce Banda’s Gross wage at the end of the week? 7

2 How much did Romans Pizza Traders contribute towards Joyce Banda’s pension fund? 5

3 Calculate how much Joyce Banda will be taking home this week. 5

4 How much did Joyce Banda cost the company this week? 4

5 What does the abbreviation SARS stand for? 1

6 Do you think is it neceesary for people to pay tax? Give two reasons. 3

7 Briefly explain the differences between a salary and a wage. 2

8 Explain what you understand by the difference between deductions and contributions. 2

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9. Analyse the transaction below in the following table. (15)

e.g.: Capital contributed by the owner, R10 000

No. Journal General Journal Effect on the accounting equation Account debit Account credit A OE L

e.g CRJ Bank Capital + 10 000 +10 000 0

a. Joyce Banda’s net wage for a week.

b. The employer’s contribution to pension fund.

c. Joyce Banda’s deduction for SARS (PAYE)

[44]


CONCEPTS, BALANCE SHEET AND NOTES

5.1 Match the concepts in Column A with explanations in Column B

1. Accounting A A business that has one owner. 2. Sole trader B Debts or obligations of a business. 3. Assets C Assets will be recorded at original cost price 4. Liabilities D Financial results are represented in a conservative

manner. 5. Historical cost E Possessions or resources of a business 6. Principle of prudence F Recording and processing financial transactions and

communicating this information to make informed decisions

[12]

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5.2 Prepare the Balance Sheet of Shiva Traders as at 28 February 2015. [19]

5.3 The following notes to the financial statements

1. Fixed assets (16)

2. Inventory (4)

3. Trade and other receivables (8)

4. Cash and cash equivalents (8)

5. Owner’s equity (4)

6. Trade and other payables (16)

INFORMATION

Extract from the Income Statement as at 28 February 2015

Depreciation (Equipment) 600

Depreciation (Vehicle) 3 024

Net profit for the year 25 790

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Post-closing Trial Balance as at 28 February 2015

Debit Credit Balance sheet accounts section

Capital 227 300

Drawings 22 000

Mortgage Loan:GT Bank 196 000

Land and Buildings at cost 268 000

Equipment 26 540

Vehicles 158 400

Accumulated Depreciation on Equipment 2 600

Accumulated Depreciation on Vehicles 23 000

Fixed deposit:AB Bank 12 000

Trading stock 31 760

Debtors control 19 000

Deposit for electricity 280

Bank 4 320

Petty cash 450

Cash float 880

Creditors control 40 520

Accrued income 850

Accrued Expenses 1 120

Prepaid expenses 310

Deferred income/Income received in advance 770

Savings account at AB Bank 500

Consumable stores on hand 450

Pension fund 2 000

Medical aid fund 3 500

Creditors for salaries 14 500

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Additional information

1. The owner, V. Shiva, increased his capital on 1 December 2014 by contributing

an additional R26 000 into the current banking account of the business. This

entry has been properly recorded.

2. The following transactions have already been recorded in the books of the

business:

x A new computer, R3 200, was purchased on 1 November 2014.

x A delivery vehicle, R64 000, was bought on 1 January 2015.

3. The mortgage loan from GT Bank is repayable in installments of R20 000 on

1 October each year.

4. The fixed deposit at AB Bank comprises of the following:

x R8 000 (maturing date 31 December 2015)

x R4 000 (maturing date 15 November 2016)


ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS REQUIRED: 6.1 Calculate the following profitability percentages for Hluzi Toy Shop for the

financial year ended 31 December 2014. Round all answers to one decimal digit. 6.1.1 Gross Profit on sales 3 6.1.2 Gross Profit on cost of sales 3 6.1.3 Net profit on sales 3 6.1.4 Operating expenses on sale 3 6.1.5 Operating profit on sales 3 6.1.6 Compare your answers for 6.1.1, 6.1.2 and 6.1.3 with the ratios given for

the previous financial year. Comment on whether the business is better off in 2014 or in 2013.

3

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INFORMATION

Hluzi Toy Shop EXTRACT FROM INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER

2014 Sales 200 000 Cost of sales (95 000) Gross profit 105 000 Other operating income 5 000 Gross operating income 110 000 Operating expenses (80 000) Operating profit 30 000 Interest income 1 2 000 Net profit for the year 32 000

Hluzi Toy Shop

PROFITABILITY RATIOS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013

Gross Profit on sales 50% Gross Profit on cost of sales 100% Net profit on sales 18%

[18]


7.1 COSTING CONCEPTS AND VAT

Match the words (phrases) in Column A with the best definition (or explanation) in Column B.

COLUMN A COLUMN B

A. Direct cost 1. Materials that become an integral part of the finished product.

B. Overheads 2. Costs that have to be paid regardless of how many goods and

services are produced

C. Indirect labour 3. Material that is relatively insignificant to the end of products.

D. Variable costs 4. The calculation, allocation and control of the costs involved in

producing a good or service

E. Indirect material 5. Labour that is employed directly in processing the product

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F. Costing 6. Costs that are directly related to and easily traced to the

making of a product.

G. Direct labour 7. Costs that cannot easily be accurately calculated and traced to

the production of a product.

H. Fixed costs 8. Costs that the business must pay for general running of the

factory, but which are difficult to allocate to a specific product

produced

I. Indirect cost 9. Costs that change depending on how many products or

services are produced.

J. Direct material 10. Labour that is not directly involved in the production of the

product.

[20]

7.2 VALUE ADDED TAX

7.2.1 What is the difference between output VAT and input VAT? 4

7.2.2 At what rate is VAT currently being charged in South Africa? 2

7.2.3 Is the current rate of VAT being charged on all goods in South Africa? Explain. 3

7.2.4 B. Mbete regularly buys goods from Hilda Stores. The owner has offered Mbete

a special price of R6 000 including VAT instead of normal price of R7 400

provided he pays cash and does not request a document. Mbete is tempted, as

this seems a good offer. Advise him as to whether he should accept the offer.

Briefly explain.

4

TOTAL: 300

Page 1 of 14

LEARNER:…………………………………………………………………CLASS: ………………………………………….

SCHOOL: ………………………………………………………………….

QUESTION MARKS INITIALS MOD. MARKS 1 2 3 4 5 6 7

TOTAL

THIS ANSWER BOOK CONSISTS OF 14 PAGES INCLUDING THE COVER PAGE.

ACCOUNTING

GRADE 10

NOVEMBER 2015

ANSWER BOOK

Page 2 of 14

QUESTION 1 (36 Marks: 22 Minutes)

1.1

NO. ACCOUNT DEBITED ACCOUNT CREDITED A O L e.g. Telephone Bank -700 -700 0 1.

2. 3. 4. 5.

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1.2

a.

b.

c.

d.

e.

f.

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Page 3 of 14


GENERAL JOURNAL OF VUKAS BAKERS – MARCH 2015

Day Details Fol Debit Credit Debtors control Creditors control Debit Credit Debit Credit

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Page 4 of 14


3.1 FORMAL AND INDIGENOUS BOOKKEEPING SYSTEMS. Indicate with a CROSS (X) in the relevant column. STATEMENT FORMAL

BUSINESS INFORMAL BUSINESS

1. Has to register with Government departments





6. Records of source documents and transactions are kept in note books just to remind the owner.


8. Adheres to principles of GAAP.

9. Records of source documents and books are kept safe and must always be available.


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Page 5 of 14

3.2 INVENTORY 3.2.1 (a)

(b)

(c)

(d)

3.2.2

3.2.3

3.2.4

3.2.5

3.2.6

a)

b)

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Page 6 of 14

3.3 GENERAL LEDGER OF ITUMELENG FURNISHERS

DEBTORS CONTROL ACCOUNT


WAGES AND SALARIES

1. Basic =

Overtime =

Goss income =

2.

3.

4.

5. SARS stand for:

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Page 7 of 14

6.

Two reasons for paying tax

7.

Salary:

Wages :

8.

Deductions :

Contributions:

9.

No. Journal General Journal Effect on the accounting equation Account debit Account credit A OE L

e.g CRJ Bank Capital + 10 000 +10 000 0

a.

b.

c.

44

Page 8 of 14


5.1 CONCEPTS

1. 2. 3. 4. 5. 6.

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Page 9 of 14

5.2 BALANCE SHEET AND NOTES

Balance Sheet of Shiva Traders as at 28 February 2015.

ASSETS notes

Non-Current assets/ Tangible assets 1

Financial assets

Current assets

2

3

4

Total assets

EQUITIES AND LIABILITIES

Owners’ equity 5

Non-Current liabilities

Current liabilities

6

Total equity and liabilities

19

Page 10 of 14

5.3 Notes to the financial statements

1. Fixed assets/Tangible Assets (16marks)

Land & building Equipment Vehicles

Cost

Accumulated depreciation

(28 February 2014)

Carrying value

(28 February 2014)

Movements

Additions at cost

Disposals at carrying value

Depreciation

Carrying value

(28 February 2015)

Cost


(28 February 2015)

16

2. Inventory (4marks)

3. Trade and other receivables (8marks)

Page 11 of 14

4. Cash and cash equivalents (8marks)

5. Owner’s equity (4marks)

Capital balance on 28 February 2014

Additional capital contributed/capital withdrawn

Net profit for the year

Drawings

Capital balance on 28 February 2015

6. Trade and other payables (16marks)

8

4

16

Page 12 of 14


ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS 6.1.1 Gross Profit on sales[3]

6.1.2 Gross Profit on cost of sales [3]

6.1.3 Net profit on sales[3]

6.1.4 Operating expenses on sales[3]

6.1.5 Operating profit on sales[3]

Page 13 of 14


7.1 COSTING CONCEPTS AND VAT


6.1.6 Compare your answers for 6.1.1, 6.1.2 and 6.1.3 with the ratios given for the previous financial year. Comment on whether the business is better off in 2014 or in 2013[3] Gross Profit on sales

Gross Profit on cost of sales

Net profit on sales

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A. B. C. D. E. F. G. H. I. J.

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Page 14 of 14

7.2 VALUE ADDED TAX

7.2.1 What is the difference between output VAT and input VAT? (4)

7.2.2 At what rate is VAT currently being charged in South Africa? (2)

7.2.3 Is the current rate of VAT being charged on all goods in South Africa? Explain (3)

7.2.4 B.Mbete regularly buys goods from Hilda Stores. The owner has offered Mbete a special price

of R6 000 including VAT instead of normal price of R7 400 provided he pays cash and does not

request a document. Mbete is tempted, as this seems a good offer.

Advise him as to whether he should accept the offer. Briefly explain. (4)

TOTAL: 300

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Page 1 of 11

ACCOUNTING

GRADE 10

NOVEMBER 2015

MEMORANDUM

MARKS: 300 TIME: 3 HOURS

MARKING PRINCIPLES:

Full marks for correct answer. If answer incorrect, mark the workings provided.

Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. If no + or – sign or bracket is provided, assume that the figure is positive Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark.

THIS MEMORANDUM CONSISTS OF 11 PAGES INCLUDING THE COVER PAGE.

Page 2 of 11

QUESTION 1

1.1

NO. ACCOUNT DEBITED

ACCOUNT CREDITED

A O L

e.g. Telephone Bank -700 -700 1. Debtors

Control/S.Mnini√ Sales √ +960√ +960√ 0

Cost of sales√ Trading stock√ -600√ -600√ 0 2. Trading Stock√ Creditors

Control/Voda Wholesalers√

+4 500√ 0 +4 500√

3. Debtors Control/ M.Mahlangu√

Interest on overdue account√

+8√ +8√ 0

4. Bank √ Debtors Control/S.Mnini√

+550√ -550√

0 0

5. Water and electricity√

Bank √ -850√ -850√ 0

[24]

1.2

a. debit √√

b. Debtors √√

c. Cheque counterfoil √√

d. R1 000 √√

e. materiality √√

f. cash receipt √√

[12]

Page 3 of 11

QUESTION 2

GENERAL JOURNAL OF VUKAS BAKERS – MARCH 2015

Day Details Fol Debit Credit Debtors control Creditors control

Debit Credit Debit Credit

3 B.Thompson√ 36√ 36√

Interest charged√ 36√

7 R.Welman√ 500√ 500√

L.Welman√ 500√ 500√

16 A.Wolfe√ 30√ 30√

Discount Allowed√ 30√

22 Drawings√ 400√

Trading stock√ 400√

29 Repairs√ 2 000√

Equipment√ 2 000√

31 Bad debts√ 630√

S.Naidoo√ 630√ 630√

[29]

Page 4 of 11

QUESTION 3

3.1 FORMAL AND INDIGENOUS BOOKKEEPING SYSTEMS Indicate with a CROSS (X) in the relevant column.

STATEMENT FORMAL BUSINESS INFORMAL BUSINESS 1. Has to register with Government

departments X√


X√


X√


X√


X√

6. Records of source documents and transactions are kept in note books just to remind the owner.

X√


X√

8. Adheres to principles of GAAP. X√

9. Records of source documents and books are kept safe and must always be available.

X√


X√

[10]

3. INVENTORY

3.1.1 (a) CJ √

(b)DAJ √

(c) CAJ √

(d) DJ √

3.1.2 Drawings of merchandise/Trading stock deficit/correction of error/donations√

3.1.3 Merchandise returned by debtors √

3.1.4 9 100√ x 150√/100√ = 13 650;

3.1.5 Compare it with the physical stock count√

Page 5 of 11

3.1.6

a) No.√

x She has the relevant skill and has offered her services to the business.√√

x Her repair work will not be interfering with the work hours required by the business.√√

Accept any reasonable answer

b)

x Ensure that Mylene only repair the computers that are broken.√√

x Get a guarantee period from Mylene√√

Accept any reasonable answer

[20]

3.3

DEBTORS CONTROL ACCOUNT 2015 June

01 Balance b/d 31 570√ 2015 June

30 Bank √

30 sales√ DJ 55 350√ (44 460√+5660√) CRJ 50 120; Bank (RD) √ CPJ 540√ Discount allowed√ CRJ 2 040√ Petty Cash√ PCJ 350√ Debtors

allowances√ DAJ 4 590√

Sundry a/c √ (70√+108√)

GJ 178; Sundry a/c√ GJ 440√

Balance c/d #30 798; 87 988 87 988

2015 July

1 Balance b/d #30 798;

#; Check operations

[23]

Page 6 of 11

QUESTION 4

WAGES AND SALARIES

1. Basic = 45 √x 40√ = R1 800;

Overtime = 11√ x 60√ = R660;

Goss wage = R2 460;

2. R(1 800√ x 8% √= 144;) x 1.5√ = R216;

3. R(2 460; – 150√ – 144; – 467.40√) = R1 698.60 ;

4. R(2 460; + 150√ + 216;) = R2 826 ;

5. SARS stand for South African Revenue Services √

6.

Yes√ Two reasons for paying tax

To enable the government to provide social services√

To enable the government to provide economic services√

Any relevant answer

7.

Salary is paid by cheque or transferred monthly √

Wages is paid in cash weekly √

Any relevant answer

8.

Deductions are subtracted from the employee’s salary√

Contributions are benefits over and above the salary that the employer contributes√

Any relevant answer

9.

No. Journal General Journal Effect on the accounting equation

Account debit Account credit A OE L

e.g. CRJ Bank Capital + 10 000 +10 000 0

a. WJ√ Wages √ Creditors for

wages√

0 (1698.60);# +1698.60;#

b. WJ√ Pension contribution√ Pension fund√ 0 - 216;# +216;#

c. WJ√ Wages √ SARS(PAYE) √ 0 #- 467.40; +467.40;#

# see b question no 3

Page 7 of 11

QUESTION 5 BALANCE SHEET AND NOTES

5.1 CONCEPTS

[12]

5.2 BALANCE SHEET AND NOTES (19marks)

Balance Sheet of Shiva Traders as at 28 February 2015.

ASSETS notes

Non-current assets ;431 340

√Fixed assets/Tangible assets 1 ;427 340

Financial assets

√Fixed deposit:AB Bank (12 000-8 000) √4 000

Current assets ;62 480

√ Inventories 2 ;32 210

√Trade and other receivables 3 ;20 440

√ Cash and cash equivalents 4 ;9 830

Total assets 493 820

EQUITIES AND LIABILITIES

Owners’ equity 5 ;231 090

Non-current liabilities ;176 000

√Long Bank (196 000-20 000) √176 000

Current liabilities ;86 730

√ Trade and other payables 6 ;86 730

Total equity and liabilities 493 820

1. F√√

2. A√√ 3. E√√ 4. B√√ 5. C√√ 6. D√√

Page 8 of 11

5.3 The following notes to the financial statements

1. Fixed assets/Tangible Assets (16marks)

Land & building Equipment’s Vehicles

Cost √268 000 √23 340 √94 400


(28 February 2014)

- √ (2 000) √ (19 976)

Carrying value

(28 February 2014)

268 000 ;21 340 ;74 424

Movements

Additions at cost - √3 200 √64 000

Disposals at carrying value - - -

Depreciation - √ (600) √ (3 024)

Carrying value

(28 February 2015)

268 000 23 940 135 400

Cost √268 000 √26 540 √158 400


(28 February 2015)

- √ (2 600) √ (23 000)

2. Inventory (4marks)

√Trading stock √31 760

√Consumable stores on hand √450

32 210

3. Trade and other receivables (8marks)

√Debtors control √19 000

√Deposit for electricity √280

√Accrued income √850

√Prepaid expense √310

20 40

Page 9 of 11

4 Cash and cash equivalents (8marks)

√Petty cash √450

√Cash float √880

√ Savings account at AB Bank √500

√Current portion of fixed deposit √8 000

9 830

4. Owner’s equity (4marks)

Capital balance on 28 February 2014 √201 300

Additional capital contributed √26 000

Net profit for the year √25 790

Drawings √(22 000)

Capital balance on 28 February 2015 231 090

5. Trade and other payables(16marks)

√Creditors control √40 520

√Bank overdraft √4 320

√Pension fund √2 000

√Medical aid fund √3 500

√Creditors for salaries √14 500

√Current portion of loan √20 000

√Accrued expense √1 120

√Deferred income/income received in advance √770

86 730

Page 10 of 11

QUESTION 6 (18marks)

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS

6.1.1 Gross Profit on sales[3]

= 105 000√ x 100 200 000√ = 52,5%;

6.1.2 Gross Profit on cost of sales [3]

= 105 000√ x 100 95 000√

= 110,5%;

6.1.3 Net profit on sales[3] =32 000√ x 100 200 000 = 16% ; 6.1.4 Operating expenses on sales[3]

= 80 000√ x 100 200 000√ =40%; 6.1.5 Operating profit on sales[3]

=30 000√ x 100 200 000 =15%;

6.1.6 Compare your answers for 6.1.1, 6.1.2 and 6.1.3 with the ratios given for the previous financial year. Comment on whether the business is better off in 2014 or in 2013[3]

Gross Profit on sales ¾ There is an increase in the gross profit on sales, so a better profit

margin was achieved. √ Gross Profit on cost of sales

¾ There is an increase in the gross profit on cost of sales and the target mark-up of 100% was exceeded√

Net profit on sales

¾ There is a decrease in the net profit on sales. √ Any relevant answer.

Page 11 of 11

QUESTION 7 (33marks)

7.1 COSTING CONCEPTS AND VAT (20marks)


A. 6√√

B. 8√√

C. 10√√

D. 9√√

E. 3√√

F. 4√√

G. 5√√

H. 2√√

I. 7√√

J. 1√√

7.2 VALUE ADDED TAX (13marks)

7.2.1 What is the difference between output VAT and input VAT? output VAT – is calculated on sales√√ input VAT – is calculated on purchases√√

4

7.2.2 At what rate is VAT currently being charged in South Africa? 14%√√

2

7.2.3 Is the current rate of VAT being charged on all goods in South Africa? Explain. No. √ There are also goods that are zero rated√ and goods that are exempt from VAT. √

3

7.2.4 B.Mbete regularly buys goods from Hilda Stores. The owner has offered Mbete a special price of R6 000 including VAT instead of normal price of R7 400 provided he pays cash and does not request a document. Mbete is tempted, as this seems a good offer. Advise him as to whether he should accept the offer. Briefly explain. He should not accept the offer especially where no documents are given. √√ This is illegal and leads to fraud√√ Accept any reasonable answer

4

TOTAL 300

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ACCOUNTING GRADE 10 NOVEMBER 2015 - Best …resources.besteducation.co.za/English/.../Nov-2015/ACCOUNTING.pdf · 1 accounting grade 10 november 2015 marks: 300 time: 3 hours this