NATIONAL

SENIOR CERTIFICATE

GRADE 12

ACCOUNTING P2

PREPARATORY EXAMINATION

SEPTEMBER 2024

MARKS: 150

TIME: 2 HOURS

This question paper consists of 14 pages including a formula sheet and an

Answer Book of 10 pages.
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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. If you choose to do so, you may use the Financial Indicator Formula Sheet attached at
the end of this question paper. The use of this formula sheet is NOT compulsory.

8. Write neatly and legibly.

9. Use the information and table below as a guide when answering the question paper.
Try NOT to deviate from it.

QUESTION TOPIC MARKS MINUTES

1 Cost Accounting 45 35

2 Stock Valuation and VAT 35 30

Cash Budget and Projected Statement of

3 40 35
Comprehensive income

4 Bank and Creditors Reconciliation 30 20

TOTAL 150 120

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QUESTION 1 COST ACCOUNTING (45 marks, 35 minutes)

1.1 Choose a cost category from COLUMN B that matches a description in
COLUMN A. Write only the letter (A-E) next to the question numbers (1.1.1 to
1.1.3) in the ANSWER BOOK, e.g 1.1.4 F.

COLUMN A COLUMN B
1.1.1 Commission to salesperson A Factory overhead cost
1.1.2 Wages of factory maintence staff B Administration cost
1.1.3 Office stationery expenses C Direct labour cost
D Direct material cost
E Selling and distribution cost
(3x1) (3)
1.2 MG TRAVEL BAGS
The information relates to the financial year ended 29 February 2024. The business
manufactures travel bags. The business is owned by Kyle Walker.
REQUIRED:
1.2.1 Prepare the factory overheads cost note. (11)
1.2.2 Complete the Production Cost Statement for the year ended
29 February 2024. (13)
1.2.3 Kyle Walker is considering importing raw materials at a lower price than they
are currently paying.
Provide TWO points they should consider before deciding. (4)

INFORMATION:
A. The following balances were appeared in the books:

29 February 2024 28 February 2023

Work-in-progress R94 000 ?
Indirect factory material R18 000 R21 000
Finished goods R8 750 R5 950

B. Raw material issued for production amounted to R1 300 028.

C. Transactions/ information for the year ended 29 February 2024:
R
Indirect material purchased 36 000
Remuneration to employees ?
Rent expense 291 000
Insurance allocated to the administration section 49 200
Telephone allocated to the administration section 28 800
Sundry factory expenses 189 856

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D. Remuneration to employees are made up of the following:

Wages of factory workers 55% ?
Salary of the factory foreman ? R435 000
Salary to salespersons ? R870 000
TOTAL 100% ?

E. Rent expense must be distributed according to floor space used. The

factory occupies 24 400 m², selling and distribution and administration
section occupy the remaining 600m².
F. Telephone is shared between factory and administration section in the ratio
of 1 : 4 respectively.
G. The following amounts were calculated after taking into account the above
information:
Sales R4 567 200
Cost of sales R3 803 200

1.3 BERGVILLE CALCULATORS

This business produces and sells calculators. The owner is Mjabu Ngubane. The
financial year ended on 31 August 2024.
REQUIRED:
1.3.1 Provide a calculation to confirm that the break-even point of 61 300 units for
2024 financial year is correct. (4)
1.3.2 Mjabu is not happy with the number of units produced and sold. Provide
evidence with figures to support his opinion. (2)
1.3.3 Mjabu is concerned that most of his workers are not loyal nor committed to
the business. Provide TWO different points of evidence, with figures, to
support his opinion.
NOTE: No theft has occurred in the business. (4)
1.3.4 Mjabu wants to improve his profit by R79 968 during the next financial year,
while maintaining costs. Calculate the additional units that must be produced
to achieve this target. (4)
INFORMATION:

31 August 2024 31 August 2023

Total Per unit Total Per unit
Sales R7 616 000 R119.00 R7 644 000 R98.00
Variable costs R4 544 000 R71.00 R4 400 000 R56.41
Fixed costs R2 942 400 R45.98 R2 520 960 R32.32
Direct material cost R2 624 000 R41.00 R2 371 200 R30.40
Direct labour cost R1 472 000 R23.00 R1 528 800 R19.60
Selling and distribution cost R448 000 R7.00 R500 000 R6.41
Break- even point 61 300 units 60 615 units
Units produced and sold 64 000 units 78 000 units

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QUESTION 2 INVENTORY VALUATION AND VAT (35 marks, 30 minutes)

2.1 VRYHEID TRADERS

The information relates to Vryheid Traders for the year ended 31 August 2024.
The business is owned by Rob Edwards. The business sells one type of wallet.

REQUIRED:
2.1.1 Calculate the value of the closing stock on 31 August 2024 using the
weighted average method. (10)
2.1.2 Rob suspects that wallets have been stolen. Provide a calculation to
support his concern. (4)

2.1.3 Rob is concerned about the number of stock on hand.

 Calculate for how long his closing stock is expected to last. (5)

 State one problem with keeping too much stock on hand and one
problem with keeping insufficient stock on hand (4)

INFORMATION:
A. Inventories:

UNITS UNIT PRICE AMOUNT

1 September 2023 450 R530 R238 500
31 August 2024 280 ? ?

B. Purchases of wallets during the financial year were as follows:

NUMBER OF UNIT TOTAL

UNITS PRICE PURCHASES
30 November 2023 600 R509 R305 400
29 February 2024 900 R600 R540 000
31 May 2024 500 R530 R265 000
30 June 2024 200 R620.50 R124 100
TOTAL 2 200 R1 234 500

C. Carriage on purchases:
The business contracted with MG transport at a fixed rate of R30 per
wallet.
D. Returns to suppliers:
Vryheid Traders were not happy with the price of the purchases on
29 February 2024. Therefore, they retuned 100 wallets to the supplier. The
supplier refunded the cost price (excluding the carriage) of each item.
E. Sales:
Sales of wallet at R900 each: R2 038 500

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2.2 CONCEPTS ON VAT

Choose the correct word(s) from those given in brackets. Write only the word(s)
next to the question number in the ANSWER BOOK.
2.2.1 VAT paid to a service provider for the purchase of goods is regarded as
(Input VAT / Output VAT).
2.2.2 VAT on drawings of stock will (increase / decrease ) the VAT payable to
SARS.
2.2.3 VAT will not be accounted for by the business on payment of
(salaries / electricity)
(3x1) (3)
2.3 VALUE – ADDED TAX (VAT)
Obusa Traders is a VAT registered business. VAT at the current rate of 15% is
applicable.
Required :
2.3.1 Calculate the amount of VAT either receivable from or payable to SARS
on 29 February 2024. Indicate whether this amount is receivable or
payable. (7)
2.3.2 The owner wants to change the VAT amount on bad debts from R840 to
R4 950. Give one reason why you would disagree with him. (2)
INFORMATION:
A. Amount owed by SARS on 1 February 2024, R16 800
B. Amount from the journals on 29 February 2024

EXCLUDING INCLUDING
DETAILS VAT
VAT VAT
Purchases of trading stock 825 000 ? ?
Cash and credit sales ? 210 000 * ?
Discount received from
? ? 9 200
suppliers
Bad debts written off ? 840 ?

* VAT on sales was incorrectly calculated. Merchandise sold for R32 200
(VAT inclusive) was taxed at the normal VAT rate. All of this merchandise
sold were zero-rated products.

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QUESTION 3 (40 marks; 35 minutes)

3.1 CASH BUDGET
HOWICK (PTY) LTD
Nompumelelo Mthiyane is the sole shareholder and CEO of the business.
REQUIRED:
3.1.1 Calculate the amounts for (i) - (v) in the Cash Budget. (19)
3.1.2 Nompumelelo extracted the following actual and budgeted figures
for August 2024:

Budgeted Actual
Total sales R864 000 R648 000
Cash from debtors R550 000 410 000
Advertising R36 000 R36 000
Delivery expenses R60 000 R51 000

Comment and quote figures on the:

 Effectiveness of the advertising (3)
 Control over delivery expenses (3)
INFORMATION:

A. Total sales:

July August September October

792 000 864 000 900 000 918 000
.
 Credit sales comprise 60% of total sales
B.  Goods are sold at a mark-up of 80% on cost.
 The business maintains a fixed stock base level. Stock sold in a month
is replaced in the same month.
C.  The cash purchases are 65% of total purchases.

 Creditors are paid in the month following the month of purchases to

take advantage of a 5% discount.
D. Extract from the Cash Budget for two months ended 31 October 2024:
September October
Cash sales 360 000 367 200
Rent income 15 500 (i)
Cash purchases 124 300 (ii)
Payment to creditors for stock (iii) 107 350
Salaries of sales assistants 41 000 (iv)
Telephone (v) 48 600

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E. Rent income is expected to increase by 9% p.a from 1 October 2024.

F. The business will have five sales assistants employed in September 2024
on the same monthly salary. Three of them will receive an annual bonus of
75% of their earnings in October 2024. A part-time sales assistant will be
also be employed during October 2024 and will earn 50% of the monthly
amount applicable to the others.

G. A tariff increase of 8% will be implemented on the telephone account from

1 October 2024. The business has entered into a fixed monthly fee
contract with the service provider.

3.2 PROJECTED STATEMENT OF COMPREHENSIVE INCOME

HARDING TRADERS

Stefan Ortega owns Harding Traders, which sell cycling equipment. You are
provided with a Projected Statement of Comprehensive Income for July and
August 2024. The actual figures are also provided.

REQUIRED:

3.2.1 Stefan budgeted to achieve a 100% mark-up on cost. However, due to

increased competition, he found it necessary to reduce his price during the
budgeted period.

 Calculate the mark-up % that the business actually achieved in

July 2024. (3)

 Stefan feels that the business benefited from the price reduction.
Quote figures from the question to support his opinion. (2)

3.2.2 Over the past two months Stefan has needed to contribute capital in order
to settle the debts of the business. Explain why the Projected Statement of
Comprehensive Income will not help him in identifying the reasons for this
problem. Provide ONE suitable reason. (2)

3.2.3 On 1 July 2024 the business had a loan from Ladysmith Bank at an
interest rate of 15% p.a. Interest is not capitalised.

Additional loan was taken on 1 August 2024 at the same interest rate.

 Calculate the amount of the additional loan taken on 1 August 2024. (4)

 Stefan decided to use the additional loan which was taken on

1 August 2024 to purchase the shop premises instead of renting
premises. How has this decision affected the profit he is earning?
Provide TWO points with figures to support your answer. (4)

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INFORMATION:
CYCLING TRADERS
Projected Statement of Comprehensive Income for July and August 2024:
July July August August
Budgeted Actual Budgeted Actual
Sales 400 000 640 000 432 000 680 000
Cost of sales (200 000) (400 000) (216 000) (425 000)
Gross profit 200 000 240 000 216 000 255 000
Other income 90 000 120 000 118 000 138 000
Operating expense (120 000) (130 000) (140 000) (145 000)
Rent expense 30 000 30 000 30 000 0
Rates 0 0 0 15 000
Operating profit 170 000 230 000 194 000 248 000
Interest expense (15% p.a) (2 500) (2 500) (12 500) (12 500)
Net profit for the month 167 500 227 500 181 500 235 500

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QUESTION 4 RECONCILIATIONS (30 marks, 20 minutes)

4.1 BANK RECONCILIATION
The information relates to Still Traders on 31 August 2024.
REQUIRED:
4.1.1 Use the table provided in the ANSWER BOOK to calculate the final totals of
the Cash Journals on 31 August 2024. (8)
4.1.2 Prepare the Bank Reconciliation Statement on 31 August 2024. (5)
4.1.3 Refer to information A (iii).
 State the GAAP principle that applies to this decision. (1)
 Explain TWO procedures, besides division of duties, to be implemented
to prevent such a loss in future. (4)

INFORMATION:
A. Extract from the Bank reconciliation statement on 31 July 2024.

Outstanding deposits: R
15 July 2024 30 000
30 July 2024 12 105

Outstanding EFT’s:
No. 141 4 700
No. 142 8 000

(i) The outstanding deposit of R12 105 and EFT no. 141, appeared on the
bank statement for August 2024.
(ii) EFT No. 142 appears on the bank statement correctly as R6 600 on the
bank statement of August 2024.
(iii) The outstanding deposit of R30 000 on 15 July 2024 was never deposited.
It was stolen and must be written off.

B. Provisional totals for Cash Journals on 31 August 2024 are as follows:

 Cash Receipts Journal (CRJ) R389 504

 Cash Payment Journal (CPJ) R287 000

C. The following information of the August 2024 bank Statement from

Spring Bank, did not appear in the August 2024 Cash Journals.

(i) Service fee of R400

(ii) A debit order to the city municipality for R 20 000 for water and
electricity.
(iii) The direct deposit received from a debtor N. Thabethe of R5 400, in
settlement of her account of R6 000.

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C. The following items reflected differences between the Bank Statement and the
Journals and must also be considered:

(i) EFT no 301, for R1 800 in favour of Zwide Traders was recorded in the
relevant Journal. Spring Bank however, reflected it twice on the
August 2024 bank statement. The bank informed us that they will rectify
it on the next bank statement.

(ii) On 27 August 2024, Still Traders received proof (via. email from debtor) of
a direct deposit into the business’s bank account, R2 910. The
bookkeeper entered this in the CRJ. This has not yet appeared on the
Bank Statement. It was discovered that the document received via. email
was a fake copy.

D. The following entries appeared in the August 2024 Cash Journals but did not
appear on the Bank Statement for August 2024.

 EFT no. 189 for R7 000 dated 31 August 2024.

 A deposit of proceeds from cash sales of R16 000 on 31 August 2024

E. The bank statement showed a favourable balance of R24 000 on

27 August 2024.

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4.2 CREDITORS RECONCILIATION

Amanhle Traders buys goods on credit from Anna Suppliers.
REQUIRED:

4.2.1 Use the table provided in the ANSWER BOOK to show changes to the
Creditors' Ledger account of Anna Suppliers in the books of
Amahle Traders and the statement of account received from Anna
Suppliers, to take into account the differences identified.

Indicate a '+' or '–' next to each amount. (8)

4.2.2 The internal auditor insists that direct payments (EFT) must be used to
pay suppliers.

 Provide one reason to support her decision. (2)

 Provide one internal procedure to ensure control over this system. (2)

INFORMATION:

A. Creditors ledger of Amahle Traders:

ANNA SUPPLIERS FOL CL12

DATE DETAILS DEBIT CREDIT BALANCE
2024 1 Balance 67 500
Aug 10 Invoice 209 81 000
EFT 33 750
17 Debit note 674 8 640
Invoice 282 40 950
Invoice 301 25 000
21 Invoice 360 50 250
24 Debit note 995 8 100
27 Journal voucher 570 5400
31 EFT 77 190 147 820

B. Statement of account from Anna Suppliers

AMAHLE TRADERS 24 February 2024

103 Mevas Road
DATE DETAILS DEBIT CREDIT BALANCE
2024 1 Balance 67 500
Aug 10 Invoice 209 81 000
Receipt 695 33 750
17 Credit note 741 6 840
Invoice 301 25 000
21 Invoice 360 20 250
24 Credit note 811 8 100 145 060

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C. Differences noted :

(i) The incorrect entry for debit note 674 in the creditors ledger account of
Anna Suppliers related to the credit note 741 on the statement. The
statement of account is correct.

(ii) Invoice 282 was incorrectly reflected in the account of Anna Suppliers in
the creditors ledger. The goods were purchased from Last Born Suppliers

(iii) Invoice 360 was incorrectly recorded on the statement from Anna
Suppliers.

(iv) Anna Suppliers also purchased goods on credit from Amahle Traders,
Amahle Traders has transferred a debit balance from the debtors ledger
( Journal voucher 570). Anna Suppliers will offset this on the next
statement.

(v) The transaction on 24 August 2024 is for merchandise returned to

Anna Suppliers.

(vi) The statement reflects transactions up to 24 August 2024.

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TOTAL MARKS 150

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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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