Accounting: P2 1 November

QUESTION 1: RECONCILIATION (40 marks; 30 minutes)

CONCEPTS

1.1 Choose the correct word(s) in brackets to correct the statement. Write only the
word(s) next to the numbers (1.1.1 – 1.1.4) in the ANSWER BOOK.
1.1.1 A debtor is a person who buys (cash/on credit) from the business. (1)
1.1.2 A credit note is a source document of the (Debtors Allowance Journal/
Debtors Journal). (1)
1.1.3 An invoice is a source document of the (Creditors Allowance Journal/
Creditors Journal). (1)
1.1.4 Discount allowed will be recorded as a (income/expense). (1)
1.2 BUTLER STORES
The following information appeared in the books of Butler Stores for
October 2023.
REQUIRED:
1.2.1 Use the information given below to calculate the correct balance for
the Debtors Control account and Debtors List on 31 October 2023. (36)

INFORMATION:
A The Debtors control balance on 31 October 2023 was R80 617.
B The Debtors List extracted on 31 October 2023 showed the following
balances:

R
A. Arendse 14 560
B. Boitumelo 18 690
C. Cordier 3 247
D. Dlamini 36 000
E. Els 2 600
TOTAL 75 067

C The following errors and omissions were discovered:

(i) The total in the Debtors Journal was overcast with R4 880.
(ii) The total in the Debtors Allowances Journal was overcast with
R1 570.
(iii) An invoice to A. Arendse was recorded in the journal as R19 600
instead of R16 900.
(iv) Charged D. Dlamini account with 15% interest for two months.
No entry was made.

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Accounting: P2 2 November

(v) Write the account of E. Els off as bad debt. No entry was made.

(vi) C. Cordier purchased goods for R7 500. This was correctly

recorded in the journal but posted wrongly to the account of
B. Boitumelo. Rectify the error.
(vii) Goods purchased by A. Arendse for R1 120 was correctly recorded
in the journal but posted to the wrong side of her account.
(viii) D. Dlamini sent R2 565 goods back to the business. No entry was
made.
(ix) C. Cordier paid R6 150 and received R375 discount. No entries
were made.

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QUESTION 2: FIXED ASSETS AND RATIOS (30 marks; 25 minutes)

2.1 PENZORN TRADERS

You are provided with information from the records of Penzorn Traders for the
financial year ended 30 June 2023.
REQUIRED:
2.1.1 Provide TWO reasons why it is important to have an asset register for
the business. (2)
2.1.2 Calculate the depreciation on 30 June 2023:
• On vehicles (6)
• On equipment (6)

2.1.3 Calculate the total amount of Land and buildings and indicate in which
financial statement it will be recorded. Refer to information A. (3)
2.1.4 Explain why you consider maintenance to property to be an important
aspect. (2)
2.1.5 Prepare a vehicle account on 30 June 2023. (5)

INFORMATION
Extract of balances:
R
Land and buildings 860 000
Vehicles 820 000
Equipment 88 000
Accumulated depreciation on vehicles 245 000
Accumulated depreciation on equipment 45 200

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Accounting: P2 3 November

Additional information:
A. (Land and buildings
• Made extensions to the shop at a cost of R125 000 and paid for
repairs to the building for R37 500. These transactions were not
recorded.

B. Vehicle
• A vehicle was bought on credit on 1 November 2022 for R360 000.
This has been properly recorded.
• Depreciation must be calculated at 20% p.a. on the diminishing
balance method.

C. Equipment
• The business bought equipment on 1 June 2023 for R48 000.
No entries have been made of this transaction.

• Depreciation must be calculated at 15% p.a. on the cost price

method.

2.2 CALCULATIONS

KRIEK TRADERS

Kriek Traders trade in sport equipment. The business maintains a fixed mark-
up on cost.
REQUIRED:
2.2.1 Calculate the following financial indicators for the year ended
30 June 2023:

• % Gross profit on sales (3)

• % Net profit on sales (3)
KRIEK TRADERS
STATEMENT OF COMPREHENSIVE INCOME ON 30 JUNE 2023
Sales R1 200 000
Cost of sales (750 000)
Gross profit 450 000
Other income 75 500
Operating expenses 345 500
Net profit for the year 180 000

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Accounting: P2 4 November

QUESTION 3: INVENTORY AND INTERNAL CONTROL (30 marks; 25 minutes)

CONROY WHOLESALERS

The information below relates to Conroy Wholesalers for October 2023. They use the
perpetual (continuous) inventory system to record and manage trading stock.

REQUIRED:

3.1 Take all the relevant information into consideration to answer the questions.

3.1.1 In which section of the general ledger must trading stock appear? (1)

3.1.2 Provide the missing contra account for (i) and (ii). (2)

3.1.3 Provide the folio numbers for (A) to (C) on the debit side of the trading
stock account. (3)

3.1.4 The total cash sales for October 2023 were R96 000. Calculate the
amount to be entered in the Trading Stock account. The business
maintains a mark-up of 50% on cost. (3)

3.1.5 Stock with a cost price of R1 890 was withdrawn by the owner on
31 October 2023. The business maintains a mark-up of 50% on cost.
Calculate the selling price. (3)

3.1.6 There was a burglary on 29 October 2023 and the value of the stock
stolen were correct calculated and entered in the trading stock
account. Suggest TWO possible ways to prevent this in the future. (4)

3.1.7 Provide two reasons (except theft) how trading stock deficit can occur. (4)

3.1.8 The business buys more on cash than on credit. Provide figures to
support your answer. (2)

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Accounting: P2 5 November

INFORMATION:
GENERAL LEDGER OF CONROY WHOLESALERS
Dr TRADING STOCK Cr
2023 2023
Oct 1 Balance 45 400 Oct 31 Cost of sales CRJ ?
31 Bank (A) 96 000 (i) DJ 39 200
Creditors'
control (B) 48 000 (ii) CAJ 24 000
Cost of sales (C) 3 020 Drawings GJ 1 890
Petty Cash PCJ 935 Theft GJ 3 955
Trading stock
deficit GJ 4 800
Balance ?

193 355 193 355

2023
Nov 1 Balance ?

3.2 CONTROL OF STOCK:

You are provided with information taken from the books of XX Stores for the
financial year ended 28 February 2023. The business is owned by B. Brown.
The business sells household appliances.
REQUIRED:
3.2.1 Fridges:
What decision did B. Brown take regarding the selling price of fridges
and how has this decision affected the business? State ONE point. (4)
3.2.2 Microwave ovens:
The business changed the supplier on microwave ovens during 2023.
Explain why this was not a good decision. Give TWO reasons with
figures. (4)
INFORMATION:

FRIDGES MICROWAVE OVENS

2023 2022 2023 2022
Orders received from
360 380 425 650
customers
Net units sold 355 375 225 590
Returns by customers 0 5 85 5
Selling price R25 000 R20 000 R1 800 R2 400
Gross profit R1 875 000 R1 550 000 R405 000 R1 416 000

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Accounting: P2 6 November

QUESTION 4: MANUFACTURING (30 marks; 25 minutes)

Match the words in Column A with the most appropriate explanation provided in
Column B. Write the letter only, next to each number.
4.1 COLUMN A COLUMN B
4.1.1 Fixed cost A Raw material in the production process.
4.1.2 Variable cost B Salary paid to person who works in the office.
4.1.3 Administration C Costs that must be paid regardless of the
cost number of units being produced.
4.1.4 Direct material D Costs that change depending on the number
cost of units produced. (4)

4.2 ALYSSA MANUFACTURERS

Alyssa Manufacturers is a small business that manufactures cricket bats. The

financial year ended 28 February 2023.
REQUIRED:
4.2.1 Give TWO examples of fixed costs and TWO examples of variable
costs (4)
4.2.2 Calculate the following:

• Balance of the direct material on 28 February 2023. (4)

• Direct labour cost (4)
• Factory overhead costs (7)
• Total cost of production (4)
• Unit cost of cricket bat (3)

INFORMATION:
A The following costs occurred during February 2023:

R
Direct material purchased 396 000
Carriages on purchases of direct material 122 800
Direct material issued in the production process 501 900
Direct labour cost (See additional information B) ?
Maintenance in the factory 32 550
Water and electricity in the factory 49 000
Indirect material for the factory 15 000
Commission to salespersons 111 222
Rent expense 160 000
Wages paid to factory cleaners 25 550

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Accounting: P2 7 November

B Additional information
(i) Direct wages of the factory workers

Number of Normal hours Rate for

workers worked normal time
4 1 920 R40

Overtime worked for the year, R86 800

(ii) 50% of the rent expense must be allocated to the factory.

(iv) The business produced 1 200 cricket batts for the year.

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QUESTION 5: CASH BUDGET (20 marks; 15 minutes)

5.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true'
or 'false' next to the question number (5.1.1–5.1.4) in the ANSWER BOOK.

5.1.1 The purpose of a cash budget is to calculate the net profit of a business.
5.1.2 Receipts and payments are recorded in the month due.
5.1.3 Depreciation will be shown as a payment in a Cash Budget.
5.1.4 Credit transactions can appear in a budget. (4)

5.2 Why it is important to prepare a budget? (2)

5.3 The school plan a Netball tournament on the school fields to raise funds.
REQUIRED:
5.3.1 Calculate the following figures for the budget:

• Total expected receipts for the tournament (5)

• Total expected payments (6)

• The total surplus or deficit for the netball tournament (3)

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Accounting: P2 8 November

INFORMATION
There are 10 netball teams from surrounding schools who will enter. A team
pays R1 000 to enter. Spectators pays R40 to watch the matches.

A Tickets
• 10 teams will enter.
• 350 spectators will watch the matches

B Tuck shop
• Sales, R8 000
• Purchases of stock, R5 600

C Rent
• The school will rent the netball courts out for R2 300.

Prices
D • R750 for the winning team and R500 for the second place and
R250 for the third place.

Meals for players

E
• R4 200 for the players and officials.

F Donation
• Receive a donation of R2 500 from the municipality.

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TOTAL: 150 MARKS

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