NATIONAL

SENIOR CERTIFICATE

GRADE 12

ACCOUNTING P2

NOVEMBER 2023

MARKS: 150

TIME: 2 hours

This question paper consists of 15 pages,

a formula sheet and an 11-page answer book.

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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. A Financial Indicator Formula Sheet is attached at the end of this question

paper.

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 TOPIC MARKS MINUTES

1 Reconciliations 40 30

2 Cost Accounting 35 30

3 Budgeting 40 30

4 Stock Valuation and Fixed Assets 35 30

TOTAL 150 120

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QUESTION 1: RECONCILIATIONS (40 marks; 30 minutes)

1.1 BANK RECONCILIATION

The information relates to Mango Traders for June 2023. The business uses
the official bank statement which is received on the 26th of each month.

REQUIRED:

1.1.1 Calculate the following on 30 June 2023:

 Correct totals for the Cash Journals. Use the table provided in the
ANSWER BOOK. (12)

 Bank Account balance in the General Ledger of the business (4)

1.1.2 Prepare the Bank Reconciliation Statement on 30 June 2023. (8)

1.1.3 Explain TWO strategies that the business can use to address the
problem of missing cash. (4)

INFORMATION:
A. The Bank Reconciliation Statement on 31 May 2023 showed the
following:

Favourable balance on the Bank Statement R27 600

Outstanding deposits:
 18 May 2023 30 000
 30 May 2023 18 200

Outstanding EFTs:
 EFT 816 (to Ace Stationers) 7 400
 EFT 817 (to Spark Wholesalers) 19 300

Favourable balance on the Bank Account in the Ledger 49 100

NOTE: The cashier reported that the cash to be deposited on 18 May was
stolen while she was on her way to the bank. This amount must
be written off.

B. Cash Journal totals on 30 June 2023 before receiving the Bank

Statement:
Cash Receipts Journal Cash Payments Journal
R81 300 R80 620

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C. Extract from the June Bank Statement:

DETAILS DEBIT CREDIT
Ace Stationers (EFT 816) 4 700
Spark Wholesalers (EFT 817) 19 300
BK Builders (EFT 792) 6 200
Deposit (30 May) 18 200
Cash deposit fee 320
Direct deposit: G Glen 14 600
VX Garage (EFT 818) 3 780
Interest 240
Transaction fees 540
Transaction fees 540

 EFT 816 (to Ace Stationers) is correct on the Bank Statement.

 EFT 792 (to BK Builders) was incorrectly recorded in the June Cash
Receipts Journal (CRJ).
 The direct deposit by G Glen was for monthly rent.
 EFT 818 (to VX Garage) was for repairs to the company vehicle. The
owner neglected to submit the transaction record slip to the
bookkeeper. No entry was made in the books.
 The monthly transaction fees were duplicated on the bank statement.

D. Entries in the Cash Journals for June 2023 that do not agree with the
June Bank Statement:
 Deposit on 27 June: R31 500
 EFT 944: R9 700
 EFT 945: R13 300

E. The owner withdrew R11 000 from an ATM to pay wages on

29 June 2023, but did not inform the bookkeeper.

F. Bank Statement balance on 30 June 2023: R?

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1.2 CREDITORS' RECONCILIATION

The information relates to SEB Traders for August 2023.

REQUIRED:

1.2.1 Taking into account the errors and omissions, calculate the correct
balance for the Creditors' Control Account and the Creditors' List.
Indicate changes with '+' for an increase and a '–' for a decrease. (9)

1.2.2 SEB Traders intend settling the account of Phuto Wholesalers on

31 August 2023. Calculate the amount due to them. (3)

INFORMATION:

A. Balances and totals on 31 August 2023 (before correcting the errors

and omissions)

Creditors' Control Account balance R175 940

Creditors' List total in the Creditors' Ledger R186 350

LIST OF CREDITORS
Phuto Wholesalers R64 950
Planet Suppliers R27 200
Mish Dealers R51 800
Arial Suppliers R42 400

B. Errors or omissions:

(i) The total of the Creditors' Allowances Journal (CAJ) was understated
by R3 600.

(ii) A payment of R14 250 made to Phuto Wholesalers was in error

posted as R15 240 to the Creditors' Ledger Account. Posting to the
General Ledger was correct.

(iii) An invoice received from Planet Suppliers, R9 540, and recorded in

the Creditors' Journal (CJ), was posted in error to the account of
Phuto Wholesalers in the Creditors' Ledger.

(iv) Goods returned to Mish Dealers, R7 500, and recorded in the CAJ,
was posted to their account in the Creditors' Ledger as an invoice.

(v) SEB Traders recorded a purchase of R13 280 from Arial Suppliers in
the CJ after deducting a trade discount of 20%. However, Arial
Suppliers informed them that the trade discount agreed on was only
10%.

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QUESTION 2: COST ACCOUNTING (35 marks; 30 minutes)

2.1 T2FIT MANUFACTURERS
The business, owned by Mark Fit, manufactures T-shirts. The financial year
ended on 28 February 2023.
REQUIRED:
2.1.1 Refer to Information A.
Calculate the direct material cost. (4)
2.1.2 Refer to Information B.
Calculate the factory overhead costs for the year by completing the
table in the ANSWER BOOK. (7)
2.1.3 Prepare the Production Cost Statement for the year ended
28 February 2023. (5)
2.1.4 Calculate the cost of the wastage of raw materials. (4)
2.1.5 Mark is concerned about the increase in the cost of raw materials over
the financial year. Provide TWO strategies that Mark can use to
address the problem of wastage. (2)
INFORMATION:
A. Stock records:
(i) Raw material (fabric to manufacture T-shirts):
 Fabric is issued from the storeroom to the factory for production.
 The weighted-average method is used to determine the value of
the fabric.
NOTE: 1,2 metres of fabric is required to make one T-shirt.
The following information was extracted from the records:
AMOUNT
METRES
R
Stock balance on 1 March 2022 1 600 m 64 800
Purchases 18 800 m 894 000
April 2022 6 400 m 288 000
August 2022 7 000 m 336 000
January 2023 5 400 m 270 000
Available for use 20 400 m 958 800
Raw material issued to the factory 18 900 m ?
Stock balance on 28 February 2023 1 500 m ?

(ii) Work-in-progress stock:

28 Feb. 2023 1 Mar. 2022
Balance 235 500 0

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B. Factory overhead costs:

The bookkeeper calculated the factory overheads as R600 000. However,

he made the following errors which must be corrected:

(i) The closing stock of factory indirect material, R7 000, was omitted.

(ii) The total water and electricity cost for the year, R84 000, was
included in factory overheads. This should be allocated as follows:

Office 15%
Selling and distribution 25%
Factory 60%

(iii) Factory insurance of R45 000 was allocated according to the old
ratio of 3 : 1 : 2 for factory, sales and office respectively. It should
have been allocated according to floor space, as follows:

Factory Sales Office

1 500 m2 300 m2 600 m2

C. Additional information:

(i) Direct labour cost, R408 600

(ii) Number of T-shirts manufactured, 15 000 units

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2.2 LIGHTING KINGS (PTY) LTD

The business manufactures light bulbs. Richard Smith, the CEO (chief
executive officer), intended to reduce the production cost of Orion bulbs due to
technological changes and to introduce the new Starlet bulbs by setting up a
new factory.

REQUIRED:

2.2.1 Do a calculation to confirm that the 2023 break-even point of

149 145 units for Orion bulbs is correct. (3)

2.2.2 Identify and explain TWO cost items (with figures) that may have
contributed to the increase in the cost of production per unit. Provide a
reason in each case. Note that the current inflation rate is 7%. (6)

2.2.3 Explain whether the new Starlet bulbs were a good idea or not. Provide
TWO points. Quote figures. (4)

INFORMATION:

FACTORY A FACTORY B
ORION STARLET
2023 2022 2023
Number of units produced and sold 163 000 198 860 225 000
Total cost of production per unit R36,00 R28,54 R49,04
Break-even units 149 145 124 808 122 104

R R R
Total sales 7 498 000 8 352 120 15 300 000
Selling price per unit 46,00 42,00 68,00
Variable costs per unit 26,00 18,10 40,90
Direct material 10,60 10,20 22,50
Direct labour 11,20 6,70 14,80
Selling and distribution 4,20 1,20 3,60

Total fixed cost 2 982 900 2 982 900 3 309 000

Fixed cost per unit 18,30 15,00 14,71
Factory overhead cost 2 314 600 2 314 600 2 640 700
Factory overhead cost per unit 14,20 11,64 11,74
Administration cost 668 300 668 300 668 300
Administration cost per unit 4,10 3,36 2,97

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QUESTION 3: BUDGETING (40 marks; 30 minutes)

The information relates to Sunday Stores (Pty) Ltd. The business is owned by
Adam Stevens.

REQUIRED:

3.1 Refer to Information B.

Identify:

 TWO items that were incorrectly recorded in the Cash Budget. (2)

 TWO items in the Cash Budget that would NOT appear in a Projected
Statement of Comprehensive Income. (2)

3.2 Complete the Debtors' Collection Schedule for December 2023. (8)

3.3 Refer to Information A and B.

Calculate the amounts indicated by (i) to (iv). (12)

3.4 Refer to Information G (budgeted and actual figures).

3.4.1 In order to increase sales, Adam decided to change the way in which
the salespeople are paid each month from 1 November 2023. The
salespeople agreed to the change.

 Explain the changes that Adam made. (2)

 Explain why some of the salespeople regretted their decision to

agree to these changes. Quote figures or show calculations. (3)

 Adam feels that the decision has benefitted the company, while the
sales manager, Milly, is concerned that it did not benefit the
company. Provide ONE point (with figures or calculations) to
support EACH of these opinions. (4)

3.4.2 Adam is concerned about the escalating rent expenses and plans to
purchase the property.

 Calculate the net effect of this purchase on the receipts and

payments in the Cash Budget. (5)

 Give ONE reason why Adam has decided to go ahead with this
purchase. (2)

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INFORMATION:
A. Extract from the Projected Statement of Comprehensive Income:
OCT. 2023 NOV. 2023 DEC. 2023
Sales R1 067 500 R1 085 000 R1 137 500
Cost of sales (620 000)
Rent expenses 31 640
Discount allowed (i) 13 650
Depreciation 13 300 13 300 13 300
Bad debts 12 000 12 180 10 710

B. Extract from the Cash Budget prepared by the bookkeeper:

NOV. 2023 DEC. 2023
RECEIPTS R R
Cash sales 434 000
Cash from debtors 610 470 ?
Interest on savings 1 200 (ii)
Interest on fixed deposit 7 500 7 500
Discount received 5 200 6 700

PAYMENTS
Payments to creditors 580 000 (iii)
Salaries of salespeople 72 000 72 000
Rent expense (iv) 31 640
Delivery expenses 43 400 43 400
Maintenance of vehicles 16 800 16 800
Audit fees 72 000 0
Bad debts 12 180 ?
Depreciation 13 300 13 300

C. Sales and collection from debtors:

Credit sales comprise 60% of total sales.
Debtors pay according to the following trends:
 40% is collected in the month of sale. They receive a 5% discount.
 50% is collected in the month following the month of sale.
 8% is collected two months after the sale.
 2% is written off as irrecoverable in the third month after the sale.
D. Purchases of stock and payments to creditors:
 The mark-up percentage is 75% on cost.
 Stock is replaced in the month of sale. A base stock is maintained.
 All purchases of stock are on credit.
 Creditors are paid in full two months after purchase.
E. Rent expenses are expected to increase by 13% from 1 December 2023.
F. The savings account will be increased by R84 000 on 1 December 2023.
Interest at 4% p.a. is not capitalised and is receivable at the end of each
month.

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G. Budgeted and actual figures for November 2023:

BUDGETED ACTUAL
Average number of customers 480 640
Cash sales R434 000 R341 800
Credit sales 651 000 1 068 700
Total sales 1 085 000 1 410 500
Salaries: Salespeople 165 000 20 000
Commission: Salespeople 0 141 050
Delivery expenses 43 400 79 300

H. Information relevant to the purchase of the property:

Adam plans to finance the purchase of the property by acquiring a loan and
using the fixed deposit that matures.

Cost of the property R2 500 000

Fixed deposit to mature on 1 January 2024 1 000 000
New loan from BK Bank on 1 January 2024 1 500 000
Interest on loan for January 2024 18 750
Monthly maintenance, rates and insurance 12 500

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QUESTION 4: STOCK VALUATION AND FIXED ASSETS (35 marks; 30 minutes)

4.1 Choose the correct cost concepts from those given in brackets. Write only the
word(s) next to the question numbers (4.1.1 to 4.1.3) in the ANSWER BOOK.

4.1.1 The (periodic/perpetual) stock system records the cost of goods sold at
the point of sale.

4.1.2 The (first-in first-out/weighted-average) method is more relevant for

low-cost stock items purchased on a more regular basis.

4.1.3 The (first-in first-out/weighted-average) stock valuation method will

value closing stock at the most current stock prices. (3 x 1) (3)

4.2 INVENTORY VALUATION

Clearview Electronics is owned by Sipho Cossa. The business sells two

models of printers, Hawi and Yama. The specific identification method is used
to value their stock. Their financial year ended on 28 February 2023. Good
internal controls ensured that there were no stock shortages.

REQUIRED:

4.2.1 Calculate the value of the closing stock on 28 February 2023. Use the
specific identification method. (6)

4.2.2 Calculate how long (in days) it will take to sell the closing stock of the
Hawi printers. (4)

4.2.3 Explain whether Sipho should be concerned about the stockholding

periods of the Hawi and Yama printers. Quote figures. Give possible
reasons for the difference in the holding periods of the two models. (6)

INFORMATION:

Units
Stock records Model Cost price Total
purchased
Opening stock Hawi 90 R3 800 R342 000
835 R3 969 950
Purchases Hawi 340 R3 800 R1 292 000
Yama 495 R5 410 R2 677 950
Returns Hawi 5 R3 800 R19 000

Sale of printers and stock holding periods:

Model Units sold Selling price Stockholding period

Hawi 300 R5 700 ?
Yama 430 R7 300 55,2 days

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4.3 FIXED ASSETS

The information relates to the fixed/tangible assets of Thembeka (Pty) Ltd. The
CEO is Lee Klou. The financial year ended on 28 February 2023.
4.3.1 Calculate the following:
 Cost price of vehicles on 1 March 2022 (3)

 Trade-in value received on the vehicle disposed of on 1 June 2022 (5)

4.3.2 The bookkeeper calculated the depreciation of the computers as:
R300 000 x 25% = R75 000
Explain to him why his method is incorrect and provide a calculation to
support your explanation. (4)
4.3.3 The CEO, Lee Klou, wants to improve the company's image by donating
the old computers to a local school in March 2023. He also plans to
upgrade the software on these computers at an extra cost of R20 000.
The shareholders feel that the old computers should be sold at a profit.
Explain TWO possible points that the CEO can use to support his
decision. (4)
INFORMATION:
A. Depreciation policy:
 Vehicles: 20% p.a. on the diminishing-balance method
 Computers: 25% p.a. on cost
B. Balances:
2023 2022
R R
Vehicles 930 000 ?
Computers 300 000 300 000
Accumulated depreciation on vehicles ? 275 000
Accumulated depreciation on computers ? 262 500

C. A vehicle was traded in for a new one on 1 June 2022, costing R260 000.
The extract from the Fixed Asset Register reflects the following:
Asset Hyundai XL
Date purchased: 1 March 2020
Cost price: R180 000
Depreciation rate: 20% p.a. on the diminishing-balance method
Date Depreciation Accumulated depreciation
28 February 2021 R36 000 R36 000
28 February 2022 R28 800 R64 800
1 June 2022 R? R?

NOTE: The profit on the disposal of this vehicle was R5 560.

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GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET

Gross profit x 100 Gross profit x 100

Sales 1 Cost of sales 1

Net profit before tax x 100 Net profit after tax x 100
Sales 1 Sales 1

Operating expenses x 100 Operating profit x 100

Sales 1 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 .

Cost of sales 1 Average trading stock

(See Note 1 below)

Average debtors x 365 Average creditors x 365

Credit sales 1 Cost of sales 1
(See Note 2 below)
Net income after tax x 100
Net income after tax x 100 Number of issued shares 1
Average shareholders' equity 1
(See Note 3 below)
Net income before tax + Interest on loans x 100
Average shareholders' equity + Average non-current liabilities 1

Shareholders' equity x 100 Dividends for the 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 Dividends for the year x 100

Earnings per share 1 Net income after tax 1

Total fixed costs .

Selling price per unit – Variable costs per unit

NOTE: 1. Trading stock at the end of a financial year may be used if required in a question.
2. Credit purchases may be used instead of cost of sales (figures will be the same if stock is constant).
3. If there is a change in the number of issued shares during a financial year, the weighted-average
number of shares is used in practice.

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