SPINE ROAD HIGH SCHOOL VIA AD SUCCESSOREM NATIONAL SENIOR CERTIFICATE GRADE 11 NOVEMBER 2016 ACCOUNTING ANSWER BOOK

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1 SPINE ROAD HIGH SCHOOL VIA AD SUCCESSOREM NAME: NATIONAL SENIOR CERTIFICATE GRADE 11 NOVEMBER 2016 ACCOUNTING ANSWER BOOK QUESTION MAX. MARKS MARKS OBTAIN MODERATED MARK This answer book consists of 16 pages If you fail to prepare You prepare to fail

2 QUESTION VAT CALCULATIONS Calculate the VAT amount that is either payable to or receivable from SARS. Show ALL workings What comment would you offer Nelson concerning this practice? State ONE point. 2 Page 2 of 16

3 1.3 CREDITORS RECONCILIATION CREDITORS LEDGER CREDITORS RECONCILIATION STATEMENT Balance (a) (b) (c) (d) (e) (f) (g) (h) State TWO internal control measures that the business can use to prevent similar incidents from happening in future. 4 Page 3 of 16

4 1.4 BANK RECONCILIATION CASH RECEIPTS JOURNAL ENTRIES (BANK ACCOUNT DEBITS) CASH PAYMENTS JOURNAL ENTRIES (BANK ACCOUNT CREDITS) DETAILS OF SUNDRY ACCOUNT AMOUNT DETAILS OF SUNDRY ACCOUNT AMOUNT Bank Reconciliation Statement on 30 June 2011 DEBIT CREDIT 9 Page 4 of 16

5 1.4.3 The Manager is concerned about the outstanding deposits totalling R This has resulted in the overdraft reflected on the June bank statement. Suggest internal control mechanisms that can be implemented to overcome such situations. (Two valid points) 4 TOTAL MARKS 61 Page 5 of 16

6 QUESTION 2 ASSET DISPOSAL Dec 31 Dec 31 9 ACCUMULATED DEPRECIATION ON VEHICLES Apr 1 Balance 11 Page 6 of 16

7 FIXED/TANGIBLE ASSETS Vehicles Equipment Carrying value at the beginning of the year Cost Accumulated depreciation ( ) (70 000) Movement Additions 0 Disposal at carrying value 0 Depreciation for the year Carrying value at the end of the year Cost Accumulated depreciation List TWO internal controls regarding Fixed Assets. 4 TOTAL MARKS 40 Page 7 of 16

8 QUESTION 3 Overbay Ltd Income statement for the year ended 30 June 2015 Sales Cost of sales Gross profit Other income Gross income Operating expenses Operating profit Interest income Profit before interest expense (finance cost) Interest Expense Net profit for the year 51 Page 8 of 16

9 3.2.2 Trade and other receivables Debtors Control Trade and other payables Creditors Control 9 TOTAL MARKS 67 Page 9 of 16

10 QUESTION Operating expenses on turnover Acid test ratio % Return on average owners equity Stock turnover rate Comment on the liquidity position for Quote THREE relevant financial indicators (actual ratios or figures) to support your answer. 8 Page 10 of 16

11 4.3 The owners are not satisfied with the rate at which the stock is being sold. Explain why they feel this way by quoting a relevant financial indicator to support your explanation Discuss THREE reasons why a business should not have too much stock Will the owners of this business be satisfied with the return on equity? Explain by quoting a financial indicator to support your opinion. 4 TOTAL MARKS 42 Page 11 of 16

12 QUESTION a) b) c) Use the figures from the table below to calculate the break-even point What advice would you offer Kolkata Manufacturers with regards to the break-even analysis done above? Calculate the factory overhead cost per unit for the year ended 30 June The factory overhead cost per unit for 2015 was R42. Give a possible reason (besides price changes) for the change in this unit cost. 2 Page 12 of 16

13 5.2 STAR WHEEL MANUFACTURERS DIRECT LABOUR COST 9 FACTORY OVERHEAD COST 13 WORK IN PROGRESS 10 TOTAL MARKS 50 Page 13 of 16

14 QUESTION Identify TWO items that Mabel has incorrectly entered in the Cash Budget Apart from the items in QUESTION 6.1 above, name TWO other items in the Payments sections of the Cash Budget (see information 4 below) that would NOT appear in a Projected Income Statement Identify or calculate A and B. Indicate negative figures in brackets. 3 A B 6.4 Identify or calculate the missing figures C and D in the extract from the Cash Budget (Information 4 below) 7 Workings Answer C D Page 14 of 16

15 6.5 Complete the Debtors Collection Schedule for February December R Credit Sales February Collections January February R Calculate the percentage increase in salaries and wages with effect from 1 February Calculate the interest on fixed deposit for January Calculate the delivery expenses figure budgeted for January Page 15 of 16

16 6.8.2 John is of the opinion that this expense is costing him too much. Which TWO points should John consider before deciding on whether or not to discontinue this service? Explain what you would say to John about each of the following items at the end of January Comment Advice Advertising Stationery Staff Training TOTAL MARKS 40 Page 16 of 16