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ACCOUNTING
Grade 12
Revision
WORKBOOK
Gr 12 Accounting Revision Workbook
2
INVENTORY
ACTIVITY 1: Inventory (June 2016) (40 marks; 30 minutes)
1.1 CONCEPTS
1.1.1
1.1.2
1.1.3
1.1.4
4
1.2 LYNN STORES
1.2.1 Calculate the value of the closing stock on 29 February 2016 using the weighted-average method.
8
1.2.2 Calculate the following for the year ended 29 February 2016:
Cost of sales:
Gross profit:
6
1.2.3 Calculate the average stock-holding period (in days) on 29 February 2016.
5
Gr 12 Accounting Revision Workbook
3
1.2.4 Calculate the value of the closing stock by using the FIFO method.
7
1.3.1 Identify ONE problem in Shop 1 and ONE problem in Shop 2. Quote figures. In EACH case, give ONE point of advice.
Branch Problem Advice
Shop 1
Shop 2
6
1.3.2 Explain TWO good decisions that Chad has made in respect of Shop 3. Quote figures.
4
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
4
ACTIVITY 2: Inventory (Feb/March 2017) (40 marks; 30 minutes) 2.1 CONCEPTS
2.1.1
3
2.1.2
2.1.3
2.2.1 Calculate the unit price of cricket bats on 1 July 2015.
2
2.2.2 Calculate the value of the stock on hand on 30 June 2016 using the weighted-average method.
10
2.2.3 Calculate the gross profit on 30 June 2016.
5
Gr 12 Accounting Revision Workbook
5
2.2.4 Calculate how long (in days) it is expected to sell the closing stock of 465 cricket bats. Use the closing stock in your calculation.
4
2.2.5
Provide a calculation to support André's concern about the control of cricket bats.
7
How can André solve this problem? Explain ONE point.
2.3 Identify ONE problem relating to each branch. Quote figures to support your answer. In each case, offer Bennie advice.
9
BRANCH PROBLEM (with figures) ADVICE
Parys
Pretoria
Pofadder
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
6
ACTIVITY 3: Inventory (November 2017) (35 marks; 25 minutes) 3.1 CONCEPTS
3.1.1
4
3.1.2
3.1.3
3.1.4
3.2 HOT-WHEELS (PTY) LTD
Motorbikes:
3.2.1 Calculate the value of the closing stock on 30 September 2017 using the specific identification method.
7
3.2.2 Mike requires your advice on the three different models of motorbikes in which he is trading. Explain TWO points of advice.
Point 1: Point 2:
4
Gr 12 Accounting Revision Workbook
7
Helmets:
3.2.3 Calculate the value of the closing stock on 30 September 2017 using the weighted-average method.
9
3.2.4 Is the weighted-average method appropriate to value the helmets? Explain ONE point.
3
3.2.5 Mike suspects that helmets are being stolen from the shop despite security cameras being installed. Provide a calculation to verify his suspicion.
5
What can Mike do to improve the internal control of stock? State THREE points.
Point 1: Point 2: Point 3:
3
TOTAL MARKS
35
Gr 12 Accounting Revision Workbook
8
ACTIVITY 4: Inventory (Feb/March 2018) (35 marks; 25 minutes)
4.1
4.1.1
4.1.2
4.1.3
3
4.2.1 Calculate the value of the closing stock according to the FIFO method on 31 December 2017.
6
4.2.2 Calculate the cost of sales. Calculate the gross profit.
8
4.2.3 Calculate the value of the closing stock on 31 December 2017 by using the weighted-average method.
6
What will be the effect on the gross profit if the owner changes to this valuation method? Provide figures.
3
Gr 12 Accounting Revision Workbook
9
4.3 You are provided with information relating to Leno Furnishers. They sell tables, chairs and beds for cash only. The owner is concerned that the figures provided reflect poor internal control and decision-making. Identify ONE problem for each product. Quote figures. In EACH case, give advice on how to solve the problem.
Product Problem (with figures) Advice
Tables
Chairs
Beds
9
TOTAL MARKS
35
Gr 12 Accounting Revision Workbook
10
ACTIVITY 5: Inventory (June 2018) (40 marks; 30 minutes)
5.1.1
Calculate the value of the closing stock of bicycles on 31 May 2018.
Workings Answer
Tempo
Cruze
Ryder
8
Calculate the cost of sales for the year ended 31 May 2018.
4
Workings Answer
Calculate the gross profit for the year ended 31 May 2018.
3
Workings Answer
5.1.2 Calculate the selling price of a Ryder bicycle.
3
Workings Answer
Calculate the average number of Ryder bicycles sold per month.
3
Workings Answer
Indicate how long it will take Fred to sell the closing stock of the Ryder bicycles. Show calculations.
3
Workings Answer
Gr 12 Accounting Revision Workbook
11
Give ONE possible reason for the slow sales of Ryder bicycles.
Give advice (ONE point) to Fred in this regard.
4
5.2.1 Explain why it was NOT a good idea to change to a cheaper supplier of
T-shirts. State TWO points.
Point 1:
Point 2:
4
5.2.2 Celia decided to change the supplier in 2018 and to change the mark-up %. How has this decision affected the business? State TWO points. Point 1: Point 2:
4
5.2.3 Make TWO separate suggestions to Celia to improve the profit on pants in 2019. Point 1: Point 2:
4
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
12
(Q 5.2, Nov 2018)
ACTIVITY 6: Inventory Valuation (20 marks; 15 minutes)
6. PACKER'S SUITCASE SHOP
6.1 Calculate the value of the closing stock on 30 June 2018 using the first-in-first-out method.
Workings Answer
5
6.2 Charles suspects that suitcases have been stolen. Provide a calculation to support his concern.
Workings Answer
5
6.3 Charles is concerned about the volume of stock on hand.
Calculate for how long his closing stock is expected to last.
Workings Answer
6
ONE problem with keeping too much stock on hand:
ONE problem with keeping insufficient stock on hand:
4
TOTAL MARKS
20
Gr 12 Accounting Revision Workbook
13
(Q2, May/Jun 2019)
ACTIVITY 7: Inventory Valuation (40 marks; 30 minutes)
7.1 7.1.1
7.1.2
7.1.3
3
7.2 PHOTO-FIX TRADERS
7.2.1 Calculate:
Value of closing stock of cameras
Workings Answer
9
7.2.2 Value of closing stock of photo frames
Workings Answer
8
7.2.3 The owner suspects that photo frames are being stolen. Provide a calculation to confirm his suspicions.
Workings Answer
5
Gr 12 Accounting Revision Workbook
14
7.2.4 Tom is thinking of employing an assistant at a wage of R3 500 per month to control the stock of photo frames. Explain why this is NOT a good idea. Provide TWO points with figures/calculations.
Explanation Figures
Point 1
Point 2
6
7.3 MANAGEMENT OF INVENTORIES
Product Problem Solution
Cupboards
Tables
Chairs
9
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
15
RECONCILIATIONS
ACTIVITY 1: Creditors' reconciliation (June 2016) (18 marks, 15 minutes)
1.1.1 CREDITORS' LEDGER
CREDITORS' RECONCILIATION STATEMENT
Balance 110 170 111 600
(a)
(b)
(c)
(d)
(e)
(f)
(g)
14
(h)
1.1.2 State TWO internal control measures that the business can use to prevent similar incidents from happening in future.
4
TOTAL MARKS
18
Gr 12 Accounting Revision Workbook
16
ACTIVITY 2: Bank reconciliation (Mar 2017) (16 marks; 15 minutes)
2.1.1 Calculate the correct balance of the Bank Account in the General Ledger on 31 July 2016.
Provisional Bank balance R16 785
Correct Bank balance
Favourable/Unfavourable: ________________
8
2.1.2 Bank Reconciliation Statement as at 31 July 2016
6
2.1.3 Explain ONE internal control measure that the business should implement to ensure that this will not happen in the future.
2
TOTAL MARKS
16
Gr 12 Accounting Revision Workbook
17
ACTIVITY 3: Debtors' reconciliation and Age analysis (June 2017) (30 marks, 25 minutes
3.1 TRUE OR FALSE
3.1.1
3.1.2
3.1.3
3
3.2 MIZZY BOUTIQUE
Use the table provided to indicate corrections that must be made to the Debtors' Control Account and the debtors' list. Provide figures and a plus (+) or minus (–) sign for each correction.
Debtors' Control Account
Debtors' List
Balance/Total on 28 February 2017
R37 710 R39 490
(a)
(b)
(c)
(d)
(e)
(f)
Balance/Total on 28 February 2017
13
3.3 GLENDALE TRADERS
3.3.1
Explain how a debtors' age analysis can assist with internal control over debtors.
2
Gr 12 Accounting Revision Workbook
18
3.3.2 Calculate the percentage of total debts exceeding the credit terms.
4
3.3.3
Explain ONE problem (with figures) relating to EACH of the following debtors:
DEBTOR PROBLEM WITH FIGURES
D Pillay
4
W Patel
3.3.4 Explain TWO problems (with figures) relating to debtor D Gouws.
4
TOTAL MARKS
30
ACTIVITY 4: Bank Reconciliation And Internal Control (Nov 2017) (30 marks; 25 minutes)
4.1
4.1.1
4.1.2
4.1.3
3
Gr 12 Accounting Revision Workbook
19
4.2.1
Calculation of CRJ total Calculation of CPJ total
90 500 85 920
Bank account balance:
14
4.2.2 Bank Reconciliation Statement on 30 June 2017
9
Gr 12 Accounting Revision Workbook
20
4.2.3 Explain the problem relating to deposits. Quote evidence.
Explain TWO strategies to prevent this in future.
Strategy 1:
Strategy 2:
4
TOTAL MARKS
30
ACTIVITY 5: Debtors' Reconciliation (March 2018) (25 marks; 20 minutes)
5.1.1 Explain why the debtors' age analysis is considered to be an effective internal control measure. State ONE point.
2
Gr 12 Accounting Revision Workbook
21
5.1.2 Explain TWO different problems highlighted by the debtors' age analysis. In EACH case, provide the name of a debtor and figure(s).
PROBLEM DEBTOR AND FIGURE(S)
6
5.2 DEBTORS' RECONCILIATION 5.2.1 CORRECTIONS TO THE DEBTORS' CONTROL ACCOUNT ON
30 NOVEMBER 2017
Balance before errors and omissions 25 700
(i)
(ii)
(iii)
(iv)
(v)
Correct Debtors' Control balance
7
5.2.2 DEBTORS' LIST ON 30 NOVEMBER 2017
L Nkosi (5 700
S Muller (11 100
M Welthagen ( –1 900
B Sandleni (15 900
Correct total of Debtors' List
10
TOTAL MARKS
25
Gr 12 Accounting Revision Workbook
22
ACTIVITY 6: Reconciliation And Age Analysis (FS, Sep 2017) (35 marks; 30 minutes)
6.1 CONCEPTS
6.1.1
6.1.2
6.1.3
6.2.1 Calculate the correct Bank Account balance on 30 June 2017.
6.2.2 Bank Reconciliation Statement on 30 June 2017
Gr 12 Accounting Revision Workbook
23
6.3 Creditors' Reconciliation
Creditors' Control Creditors’ List
Balance/total 184 870 170 490
A
B
C
D
Balance/total
6.4
Identify TWO problems regarding the control over debtors. Provide relevant
names and/or figures. In each case provide ONE point of advice to the
owner.
PROBLEM ADVICE
TOTAL MARKS
35
Gr 12 Accounting Revision Workbook
24
(Q2.2 Nov 2018)
ACTIVITY 7: Creditors Reconciliation (21 marks; 15 minutes)
7.1 CREDITORS' LEDGER: ACCOUNT OF MARITI
SUPPLIERS
STATEMENT OF ACCOUNT
Balance 147 820 145 060
(a)
(b)
(c)
(d)
(e)
(f)
13
7.2 The internal auditor insists that direct payments (EFTs) must be used to pay suppliers.
Explain ONE reason to support his decision.
2
Explain ONE internal procedure to ensure control over this system.
2
7.3 Besides dismissing Vernon, provide ONE suggestion for action to be taken against him.
Provide ONE suggestion to prevent this problem in future.
4
TOTAL MARKS
21
Gr 12 Accounting Revision Workbook
25
(Q1, May/June 2019)
ACTIVITY 8: Bank Reconciliation (20 marks; 15 minutes)
8.1 Calculate the correct Bank Account balance on 31 May 2019.
Provisional Bank balance R19 400
Favourable/Unfavourable:
9
8.2 Bank Reconciliation Statement on 31 May 2019
DEBIT CREDIT
7
8.3 State TWO internal control measures that the business can use to ensure that this will not happen in the future.
4
TOTAL MARKS
20
Gr 12 Accounting Revision Workbook
26
MANUFACTURING ACTIVITY 1: Manufacturing (Nov 2016) (45 marks; 35 minutes)
1.1
1.1.1
1.1.2
1.1.3
1.1.4
4
1.2.1 Calculate direct labour cost.
8
Calculate direct material cost.
6
1.2.2 Production Cost Statement for the year ended 29 February 2016:
Prime cost
Cost of production of finished goods
8
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27
1.2.3 Calculate the break-even point for 2016.
5
Explain whether the owner should be concerned or not. Provide figures.
3
1.2.4 The owner is not satisfied with the internal control of the raw material (fabric).
STOREROOM: Raw material stolen
FACTORY: Raw material wasted
CALCULATION:
metres of fabric
STRATEGY
11
TOTAL MARKS
45
Gr 12 Accounting Revision Workbook
28
ACTIVITY 2: Manufacturing (June 2016) (50 marks; 40 minutes)
2.1 ABE ACCESSORIES
2.1.1 Factory Overhead Cost Note
15
2.1.2 Production Cost Statement for the year ended 29 February 2016
Direct material 350 000
Direct labour cost
Prime cost/Direct cost
Factory overhead cost
Total cost of production
Cost of production of finished goods
8
Gr 12 Accounting Revision Workbook
29
2.2 NEW FASHION MANUFACTURERS
2.2.1 Gloria is concerned about the wastage of direct materials. Calculate the number of metres of fabric that was wasted.
5
Gloria feels that the wastage is significant. Provide a calculation to support her opinion.
3
2.2.2 Give TWO possible reasons for this wastage and, in EACH case, give advice to prevent this from happening in future.
Reason Advice
1.
2.
4
2.2.3 Calculate the break-even point for the year ended 29 February 2016.
4
Explain why the business should be satisfied with the number of units made during the current financial year. State TWO points.
4
Gr 12 Accounting Revision Workbook
30
2.2.4 What effect will it have on the production cost of a dress? Provide a calculation to support your answer.
3
State TWO other consequences of importing the direct material.
4
TOTAL MARKS
50
Gr 12 Accounting Revision Workbook
31
ACTIVITY 3: Manufacturing (Nov 2017) (55 marks; 45 minutes) 3.1 GEVEN MANUFACTURERS
3.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2017
Direct material cost
Direct labour cost
Prime cost
Factory overhead cost
Total cost of production
14
3.1.2 ABRIDGED INCOME STATEMENT FOR YEAR ENDED 28 FEBRUARY 2017
Sales
Cost of sales
Gross profit
Administration cost
Selling and distribution cost
Net profit
14
Gr 12 Accounting Revision Workbook
32
3.2 GYMWEAR MANUFACTURERS 3.2.1 Shirts:
Calculate the break-even point for shirts.
4
Identify ONE variable cost (with figures) that has not been well controlled. Give TWO possible reasons for this problem.
ONE VARIABLE COST WITH FIGURES
REASONS
Reason 1: Reason 2:
4
Explain why Jan might be concerned about the large decreases in the other TWO variable costs.
4
Jan does not understand why the unit cost of production has increased when neither his fixed costs nor the variable costs have increased. Explain why this is so. State ONE point (with figures).
4
Gr 12 Accounting Revision Workbook
33
3.2.2 Shoes:
Calculate the % increase in the selling price of shoes.
3
Jan decided to improve the quality of the shoes and to export them. Explain how the direct material costs and the selling and distribution costs were affected by this decision. Provide figures.
4
Jan was concerned that the increase in price would have a negative impact on the business. Explain whether his concern was justified. State TWO points. Point 1: Point 2:
4
TOTAL MARKS
55
Gr 12 Accounting Revision Workbook
34
ACTIVITY 4: Manufacturing (Mar 2018) (45 marks; 35 minutes)
4.1 GLAMOUR DRESS CREATIONS 4.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED
28 FEBRUARY 2017
21
Prime cost
Total manufacturing cost
Work-in-process (1 March 2016) 76 000
Production cost of finished goods
4.1.2 Calculate the net profit for the year ended 28 February 2017.
7
4.2 LIGHTING SOLUTIONS
4.2.1 Calculate the factory overhead cost per unit for the year ended 31 December 2017.
2
4.2.2 Explain why George would not be concerned about the 28,1% increase in total variable cost from R936 000 to R1 200 000.
3
Gr 12 Accounting Revision Workbook
35
4.2.3 Give TWO reasons for the increase in the selling and distribution cost per unit.
2
4.2.4 Calculate the break-even point for the year ended 31 December 2017.
4
Comment on the production level for 2017. State TWO points. Quote figures.
4
4.2.5 Lighting Solutions are considering importing raw materials because it is cheaper and of a higher quality. Name TWO aspects that they must consider before finalising their decision.
2
TOTAL MARKS
45
Gr 12 Accounting Revision Workbook
36
ACTIVITY 5: Manufacturing (Mar 2017) (45 marks; 35 minutes)
5.1 MOSES MANUFACTURERS
5.1.1 PRODUCTION COST STATEMENT ON 30 APRIL 2016
Direct labour cost 716 960
Prime cost
Total manufacturing cost
16
Work in process at beginning of year 142 000
Cost of production of finished goods
5.1.2 Complete the abridged (shortened) Income Statement to calculate the net profit for the year ended 30 April 2016.
Gross profit 1 250 000
Net profit
8
Gr 12 Accounting Revision Workbook
37
5.2 UNIT COSTS AND BREAK-EVEN ANALYSIS
5.2.1 Explain the difference between fixed cost and variable cost.
2
5.2.2 Calculate the break-even point for 2017.
5
5.2.3 Comment on the break-even point and the level of production for 2016 and 2017. Explain why the owner should be satisfied or not.
6
5.2.4 Identify the variable cost that should be of great concern to the owner. Explain and provide a calculation to support your answer.
4
5.2.5 Despite the fact that there was a decrease in the fixed costs per unit, the owner is still not satisfied with his control over the fixed costs. Explain and provide calculation(s) to support his opinion.
4
TOTAL MARKS
45
Gr 12 Accounting Revision Workbook
38
(Q1, Nov 2018)
ACTIVITY 6: Manufacturing (40 marks; 30 minutes)
6.1
6.1.1
6.1.2
6.1.3
3
6.2 KRIGE SHIRTS 6.2.1
Calculate direct labour cost.
9
6.2.2 PRODUCTION COST STATEMENT FOR THE YEAR ENDED 31 JULY 2018
Direct material cost 528 300
12
Prime cost
Total production cost
Work-in-progress (1 August 2017)
Cost of production of finished goods
Gr 12 Accounting Revision Workbook
39
6.3 GEMMA'S MANUFACTURERS
6.3.1 Calculate the break-even point for the year ended 31 August 2018.
5
6.3.2 Compare and comment on the break-even point and the production level achieved over the last two years. Quote figures.
6
6.3.3 Give TWO reasons for the increase in direct material cost. Suggest ONE way to control this cost. REASONS:
SUGGESTION:
5
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
40
(Q3, May/June 2019)
ACTIVITY 7: Manufacturing (40 marks; 30 minutes)
7.1 7.1.1
7.1.2
7.1.3
7.1.4
4
7.2.1 Calculate: The value of the closing stock using the first-in-first-out stock valuation method
Workings Answer
5
Calculate: Direct material cost
Workings Answer
4
7.2.2 Factory overhead cost
TOTAL b/f 84 330
8
7.2.3 Provide evidence (figures) to justify his concern. In each case, also give a possible reason for the increase in EACH unit cost, apart from normal inflation.
COST EVIDENCE REASON
Total fixed cost per unit
Direct labour cost per unit
6
Gr 12 Accounting Revision Workbook
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7.2.4 Calculate the break-even point on 31 December 2018.
Workings Answer
4
Explain whether or not there was any improvement in the trends of the level of production and the break-even point from one year to the next. Quote figures.
4
The owner cannot understand why he is making a better profit this year. Explain how this happened. Provide TWO points. Quote figures.
5
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
42
BUDGETS
ACTIVITY 1: Budgeting (June 2016) (40 marks; 30 minutes)
1.1 (a)
Operating profit
12
(b) Cost of sales
(c) Wages
(d) Rent income
1.2.1 Calculate the monthly salary due to the sales manager in June 2016.
4
1.2.2 Calculate the total credit sales expected in July 2016.
4
Gr 12 Accounting Revision Workbook
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1.2.3 Calculate the cost price of the new vehicle purchased on 1 May 2016.
4
1.3 Comment on the control of telephone and water and electricity. What advice would you offer Susan? State ONE point. Comment: Advice:
4
1.4 Susan wants to reduce the maintenance budget to R500 per month and then use this saving for staff training. What should she consider before making this change? State TWO points.
4
Gr 12 Accounting Revision Workbook
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1.5 Explain how Susan responded to this threat. State THREE points. Provide figures/calculations to support your answer.
6
Explain whether Susan's response was successful or not. Provide figures.
2
TOTAL MARKS
40
ACTIVITY 2: Budgeting (Nov 2016) (40 marks; 30 minutes)
2.1.1 TWO items recorded incorrectly in the Cash Budget:
2
2.1.2 TWO items in the Cash Budget that would NOT appear in a Projected Income Statement:
2
Gr 12 Accounting Revision Workbook
45
2.2 DEBTORS' COLLECTION SCHEDULE
MONTHS CREDIT SALES SEPTEMBER OCTOBER
July 120 000 8 400
9
August 151 200 60 480
September 172 800 86 400
October
155 280
2.3 AMOUNTS FOR THE CASH BUDGET
WORKINGS AMOUNT
(a) Cash sales for September
(b) Payments to creditors for October
18
(c) Directors' fees for October
(d) Interest on loan for October
Gr 12 Accounting Revision Workbook
46
2.4.1 The directors changed the method of payment to the salespersons.
Explain how this has benefitted the salespersons. Quote figures. Explain how this has benefitted the business. Quote figures.
4
2.4.2 The directors are not concerned about the overspending on packing material. Explain why this is so. Quote figures or calculations.
5
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
47
ACTIVITY 3: Budgeting (March 2017) (40 marks; 30 minutes)
3.1 Calculate the expected monthly percentage of goods sold on credit.
4
3.2
Debtors Collection Schedule for March 2017
MONTH CREDIT SALES FEBRUARY MARCH
December 2016 74 000 16 280
January 2017 68 000 27 200 *
February 2017 70 000 24 010 *
March 2017 64 000 *
Cash from debtors 67 490 *
5
3.3.1 Explain why the owner is concerned. Give TWO reasons with supporting figures.
4
3.3.2 Suggest ONE solution for this problem.
2
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WORKINGS ANSWER
3.4.1
(a) Payment to creditors
6
(b) Salaries of sales assistants
5
3.4.2 Calculate the percentage increase in rent on 1 March 2017.
4
3.4.3 Calculate the amount of the interest on investment expected to be received in March 2017.
4
3.5
Identify TWO payments that you consider to be poorly managed in February 2017. In EACH case, give a suggestion to improve the internal control of the items identified.
PAYMENT ADVICE
6
TOTAL MARKS
40
Gr 12 Accounting Revision Workbook
49
ACTIVITY 4: Budgeting (June 2017) (45 marks; 35 minutes)
4.1 Comment on the control of EACH item and give ONE point of advice in each case.
COMMENT ADVICE
Telephone
Staff training
4
4.2 Identify TWO items incorrectly entered in the Cash Budget.
2
4.3 CREDITORS' PAYMENT SCHEDULE
MONTH CREDIT
PURCHASES MAY JUNE
March R64 000 6 400
April R72 000 10 800
May 57 000
June R96 000
74 200
9
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50
4.4
CALCULATION AMOUNT
(i)
Cash sales
(ii)
Cash purchases of stock
(iii)
Delivery expenses
(iv)
Salaries and wages
(v)
Repayment of loan
(vi)
Cash at end of month
(vii)
Cash deficit for the month
21
Gr 12 Accounting Revision Workbook
51
4.5 Piet wants to save on costs by not offering a free delivery service. Is this a good idea? Explain.
3
4.6 Explain ONE advantage and ONE disadvantage of each option.
OPTION ADVANTAGE DISADVANTAGE
Raise a new loan
Hire (lease) the assets from Computer Solutions
Ask a friend to become equal partner
6
TOTAL MARKS
45
Gr 12 Accounting Revision Workbook
52
ACTIVITY 5: Budgets (Nov 2017) (30 marks; 25 minutes)
5.1 Explain the main purpose of a Cash Budget. Explain the main purpose of a Projected Income Statement.
2
5.2.1 Larry expects debtors to settle accounts by the end of the month following the sales transaction month. Use the November figures to calculate the % of debtors that are expected to comply with the credit terms. Use the November figures to calculate the % of bad debts expected.
9
5.2.2 Larry does not believe that his debtors' control clerk, Shirley, deserves a bonus on 31 October 2017. Provide evidence to support his opinion. Offer Larry advice to improve debtors' collections (TWO points). Point 1: Point 2:
4
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5.3.1 Calculate the fixed % of sales used by Larry to budget for delivery expenses. Calculate the amount of the loan to be repaid on 31 December 2017.
6
5.3.2 Refer to variances in Information D. Explain why Larry would feel that all these variances are problems for his business.
COMMENT ON VARIANCES
Sales
Advertising
Packing materials
Delivery expenses
9
TOTAL MARKS
30
Gr 12 Accounting Revision Workbook
54
ACTIVITY 6 Projected Income Statement (March 2018) (45 marks; 35 minutes)
6.1.1 Calculate the mark-up percentage on spare parts used in the Projected Income Statement for March 2018.
3
6.1.2 Calculate the % decrease in service fee income expected in April 2018.
3
6.1.3 Calculate the additional space (in square metres) the business will rent from April 2018.
4
6.1.4 Calculate the interest rate on the fixed deposit.
5
6.2 Comment on the control of stock and explain how Vusi intends to correct this. Quote figures.
4
Gr 12 Accounting Revision Workbook
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6.3.1 Vusi is thinking of purchasing the business premises rather than renting it. State ONE advantage and ONE disadvantage of this option.
Advantage: Disadvantage:
4
6.3.2 Vusi offers a free delivery service of spare parts to customers, but plans to discontinue this service on 31 March 2018. State TWO points to support this decision.
4
6.3.3 Calculate the cost of the new vehicle that he plans to purchase on 1 April 2018.
4
Gr 12 Accounting Revision Workbook
56
6.4.1 Explain whether Water and electricity has been well controlled, or not.
3
6.4.2 Explain whether you agree with Vusi's decision not to use the full budget for Advertising.
3
6.4.3 Explain whether Consumable stores have been well controlled, or not.
4
6.4.4 Explain how Vusi's decision about the mark-up percentage on spare parts has affected the business.
4
TOTAL MARKS
45
Gr 12 Accounting Revision Workbook
57
(Q6, Nov 2018)
ACTIVITY 7: Cash Budgets (35 marks; 30 minutes) 7.1 Debtors' Collection Schedule for October 2018
MONTHS CREDIT SALES SEP. 2018 OCT. 2018
July 369 600 81 312
August 384 400 211 420
September 403 200 76 608
October 420 000
369 340
7
7.2 Calculate:
(i) Cash sales for September
Workings Answer
(ii) Rent income for October
Workings Answer
9
(iii) Payments to creditors in October
Workings Answer
7.3 Calculate the % increase in salaries of sales assistants for October 2018.
Workings Answer
3
Explain whether the sales assistants should be satisfied with this increase.
2
Gr 12 Accounting Revision Workbook
58
7.4 Refer to Information E.
7.4.1 Explain the effect of the new competitor on any TWO items in the budget for September. Provide figures.
4
7.4.2 Identify TWO changes Donald implemented in October in response to the new competitor. Quote figures. Give ONE reason for EACH change.
Item (with figures) Possible reason
6
7.4.3 Explain why Donald feels that his decisions were successful. Provide TWO points (with figures).
Point 1
Point 2
4
TOTAL MARKS
35
Gr 12 Accounting Revision Workbook
59
(Q6, May/Jun 2019)
ACTIVITY 8: Budgets (30 marks, 25 minutes)
8.1 Identify TWO items in the Cash Budget that will not appear in a Projected Income Statement.
2
8.2 (i) Calculate: Rent income, June 2019
Workings Answer
7
(ii) Calculate: Fixed deposit: Protea Bank, July 2019
Workings Answer
(iii) Calculate: Cash purchases of trading stock, July 2019
Workings Answer
8.3 Calculate the total purchases for April 2019.
Workings Answer
2
8.4 DEBTORS' COLLECTION SCHEDULE
CREDIT SALES JUNE JULY
MAY 576 000 374 400
JUNE 159 030
JULY 855 000
TOTAL 533 430
8
Gr 12 Accounting Revision Workbook
60
8.5.1 Comment on the following (provide figures):
Effect of the advertising on sales
3
Payment to creditors
2
8.5.2 Identify TWO strategies (except advertising) that the business used to achieve sales targets for May 2019. Quote figures.
4
Explain whether these were good strategies, or not. Provide ONE point with figures.
2
TOTAL MARKS
30
Gr 12 Accounting Revision Workbook
61
VAT
ACTIVITY 1: VAT (March 2016) (15 marks; 10 minutes) VAT CONCEPTS
1.1.1
3
1.1.2
1.1.3
1.2 VAT CALCULATIONS
Calculate the correct amount of VAT the business has to pay. Show ALL workings.
12
TOTAL MARKS
15
Gr 12 Accounting Revision Workbook
62
ACTIVITY 2: VAT (June 2016) (17 marks, 10 minutes)
2.1
2.1.1
2.1.2
2.1.3
3
2.2.1 Calculate the VAT amount that is either payable to or receivable from SARS.
12
2.2.2 What comment would you offer Nelson concerning this practice? State ONE point.
2
17
ACTIVITY 3: VAT (Nov 2016) (10 marks; 8 minutes)
Calculate the amount receivable from or payable to SARS for VAT on 31 August 2016.
10
Receivable/Payable:
Gr 12 Accounting Revision Workbook
63
ACTIVITY 4: VAT (March 2017) (14 marks; 10 minutes) 4.1 CONCEPTS
4.1.1
4.1.2
4.1.3
3
4.2 VALUE-ADDED TAX (VAT)
4.2.1 Calculate the amount of VAT either receivable from or payable to SARS on 31 July 2016. Receivable/Payable: __________________
9
4.2.2 The owner wants to change the VAT amount on bad debts from R840 to R4 200. Give ONE reason why you would disagree with him.
2
TOTAL MARKS
14
Gr 12 Accounting Revision Workbook
64
Activity 5: VAT (March 2018) (15 marks; 10 minutes)
5.1 Calculate the VAT amount that is either receivable from or payable to SARS on 31 July 2017.
11
5.2 Nomvula has ordered goods with a marked price of R35 000 from Beta Suppliers.
The sales director of Beta Suppliers, Jim Frow, has offered to sell these goods to Nomvula for R15 000, provided that they do not have to issue an invoice.
Comment on the offer made by Jim. State TWO points.
4
TOTAL MARKS
15
Gr 12 Accounting Revision Workbook
65
ACTIVITY 6: VAT (MCED, June 2018) (30 marks; 25 minutes)
6.1 Choose the correct one between brackets:
6.2 Explain the THREE different types of VAT and give an example of each?
6.3 Explain the difference between VAT INPUT and VAT OUTPUT.
VAT INPUT VAT OUTPUT
6.1.1
6.1.2
6.1.3
3
6
4
Gr 12 Accounting Revision Workbook
66
6.4 Use these entries to calculate the correct amount owing to SARS/ or owed by SARS. Show your workings.
TOTAL MARKS
30
(Q2.1, Nov 2018)
ACTIVITY 7: VAT (14 marks; 10 minutes)
7.1 WORKINGS ANSWER
(a)
(b)
(c)
10
(d)
17
Gr 12 Accounting Revision Workbook
67
7.2 Explain what you would say to Samson. Provide TWO points.
Point 1
Point 2
4
TOTAL MARKS
14
(Q1.1, May/Jun 2019)
ACTIVITY 8: VAT (13 marks; 10 minutes)
8.1 8.1.1
8.1.2
2
8.2 Calculate the amount receivable from or payable to SARS for VAT on 30 April 2019.
Workings Answer
11
Receivable/Payable:
TOTAL MARKS
13
Gr 12 Accounting Revision Workbook
68
FIXED ASSETS
(Q5.3, Nov 2018)
ACTIVITY 1: FIXED ASSETS (21 marks; 15 minutes)
MINDEW LIMITED
1.1 WORKINGS ANSWER
(i)
(ii)
17
(iii)
(iv)
(v)
1.2 Explain how the internal auditor should check that movable fixed assets were not stolen.
2
1.3 As an independent auditor, what advice would you give? Provide ONE point.
2
TOTAL MARKS
21
Gr 12 Accounting Revision Workbook
69
COMPANIES / FIN STATEMENTS / ANALYSIS
ACTIVITY 1: Statement of Financial Position (Balance Sheet) ; Audit Report (June 2016) (65 marks; 50 minutes)
1.1 CONCEPTS
1.1.1
1.1.2
1.1.3
1.1.4
4
1.2 PARADISE LIMITED 1.2.1 Ordinary share capital
6
Retained income
Balance at beginning of year 1 634 000
10
Ordinary share dividends
Balance at end of year
Gr 12 Accounting Revision Workbook
70
1.2.2 STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
ON 29 FEBRUARY 2016
ASSETS
35
NON-CURRENT ASSETS
Fixed deposit: Sandton Bank
CURRENT ASSETS 3 538 600
TOTAL ASSETS
EQUITY AND LIABILITIES
ORDINARY SHAREHOLDERS' EQUITY
Ordinary share capital
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL EQUITY AND LIABILITIES
Gr 12 Accounting Revision Workbook
71
1.3 AUDIT REPORT
1.3.1 What type of audit report did Topstar Ltd receive? Choose from the following: unqualified, qualified, disclaimer.
Reason:
3
1.3.2 To whom is an audit report addressed?
Reason:
3
1.3.3 Explain why the auditor mentioned IFRS in the audit report.
2
Explain why the auditor mentioned the Companies Act (Act 61 of 1973) in the audit report.
2
TOTAL MARKS
65
Gr 12 Accounting Revision Workbook
72
ACTIVITY 2: Audit Report; Statement of Comprehensive Income (Income Statement) (Nov 2016) (70 marks; 55 minutes)
2.1 2.1.1
2.1.2
2.1.3
2.1.4
4
2.2 AUDIT REPORT
2.2.1 To whom is the audit report addressed?
1
2.2.2 Who has to ensure that the financial statements are prepared and presented at the annual general meeting?
1
2.2.3 Fralezi Ltd received a/an (qualified/unqualified/disclaimer of opinion) audit report. Explain your choice.
2
2.2.4 Explain why the independent auditors referred to pages 11–29 in the
report.
2
Gr 12 Accounting Revision Workbook
73
2.3 FRALEZI LTD STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT)
FOR THE YEAR ENDED 30 JUNE 2016
Sales
Cost of sales
Gross profit
Other income
Operating expenses
Directors' fees
Salaries and wages
Sundry expenses
Operating profit
Interest income
Profit before interest expense
Interest expense
Net profit before tax
Income tax for the year
Net profit after tax 504 000
TOTAL MARKS
70
60
Gr 12 Accounting Revision Workbook
74
ACTIVITY 3: Company Financial Statements and Interpretation (March 2017)
(75 marks; 60 minutes) 3.1 GANDHI LTD
STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT) FOR THE YEAR ENDED 28 FEBRUARY 2017
Sales
Cost of sales
Gross profit 3 150 000
Other income
Commission income 12 000
Gross income
Operating expenses
Salaries and wages 824 000
Depreciation 216 500
Sundry expenses
Operating profit
33
Interest income
Net profit before interest expense
Interest expense
Net profit before tax
Income tax (396 800)
Net profit after tax
Gr 12 Accounting Revision Workbook
75
3.2.1 ORDINARY SHARE CAPITAL
AUTHORISED SHARE CAPITAL
1 200 000 ordinary shares
ISSUED SHARE CAPITAL
Ordinary shares on 1 March 2016 3 084 000
10
3.2.2 RETAINED INCOME
Balance on 1 March 2016 674 500
10
Ordinary share dividends
Balance on 28 February 2017
3.3 EQUITY AND LIABILITIES SECTION OF THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
SHAREHOLDERS' EQUITY
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
16
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
Gr 12 Accounting Revision Workbook
76
3.4.1 Calculate B Sly's percentage shareholding in the company before and after the share buy-back.
Before the buy-back: After the buy-back:
4
3.4.2 Explain why the other shareholders will be concerned about this transaction.
2
TOTAL MARKS
75
Gr 12 Accounting Revision Workbook
77
ACTIVITY 4: Statement of Comprehensive Income (Income Statement) and Fixed Assets (June 2017) (70 marks; 55 minutes)
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4
4.2 MTOMBENI LTD
4.2.1 Calculate: Carrying value of the vehicle sold on 30 November 2016
5
Calculate: Total depreciation on equipment on 28 February 2017
7
Gr 12 Accounting Revision Workbook
78
4.2.2 MTOMBENI LTD
Statement of Comprehensive Income (Income Statement) for the year ended 28 February 2017:
Sales (5 500 000
Cost of sales (3 150 000
Operating expenses
Directors' fees 380 000
Audit fees 54 000
Operating profit
Interest income
Net profit after interest income
Net profit before tax
Income tax
Net profit after tax 864 000
54
TOTAL MARKS
70
Gr 12 Accounting Revision Workbook
79
ACTIVITY 5: Fixed Asset, Statement of Financial Position (Balance Sheet); Audit report (Nov 2017) (65 marks; 50 minutes) 5.1
(a) Calculate the carrying value of Land and Buildings on 1 March 2016.
2
(b) Calculate the total depreciation on Vehicles on 28 February 2017.
6
(c) Calculate the carrying value of Vehicles on 28 February 2017.
4
(d) Calculate the carrying value of Equipment sold on 31 December 2016.
6
(e) Calculate the total carrying value of Fixed Assets on 28 February 2017.
4
Gr 12 Accounting Revision Workbook
80
5.2 ODETTE LTD
STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 28 FEBRUARY 2017
ASSETS
NON-CURRENT ASSETS
CURRENT ASSETS
Inventory 408 880
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Ordinary share capital
Retained income 520 000
NON-CURRENT LIABILITIES
37
CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
Gr 12 Accounting Revision Workbook
81
5.3 AUDIT REPORT
As a shareholder, what concerns would you have regarding this audit report? Explain THREE points.
Point 1: Point 2: Point 3:
6
TOTAL MARKS
65
Gr 12 Accounting Revision Workbook
82
ACTIVITY 6: Statement of Financial Position (Balance Sheet); Audit Report (March 2018) (65 marks; 50 minutes)
6.1
6.1.1
6.1.2
6.1.3
6.1.4
6.1.5
5
6.2 ORBIT LTD 6.2.1 (a) ORDINARY SHARE CAPITAL
Authorised
6 000 000 shares
Issued
8
(b) RETAINED INCOME
Balance on 1 July 2016 874 000
11
Ordinary share dividends
Balance on 30 June 2017
Gr 12 Accounting Revision Workbook
83
6.2.2 ORBIT LTD
STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 30 JUNE 2017
ASSETS
NON-CURRENT ASSETS
Fixed/Tangible Assets
Fixed deposit 380 000
CURRENT ASSETS
Inventory 478 000
TOTAL ASSETS
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Ordinary share capital
Retained income
NON-CURRENT LIABILITIES
28
Loan: Helping Bank
CURRENT LIABILITIES
Trade and other payables
TOTAL EQUITY AND LIABILITIES
Gr 12 Accounting Revision Workbook
84
6.2.3 As a shareholder, explain your concern regarding the proposed buy-back of shares. Provide calculations to support your concern.
6
6.3 AUDIT REPORT: DF ENTERPRISES LTD
6.3.1 (a)
(b)
2
6.3.2 (a) The audit report below indicates a/an (qualified/unqualified) opinion.
1
(b) Explain why the shareholders should be concerned about this audit report. State TWO points.
4
TOTAL MARKS
65
Gr 12 Accounting Revision Workbook
85
ACTIVITY 7: Cash Flow and Interpretation (Nov 2017) (85 marks, 65 minutes)
7.1 7.1.1
7.1.2
7.1.3
7.1.4
4
7.2 SO-FINE LTD 7.2.1 ORDINARY SHARE CAPITAL AUTHORISED SHARE CAPITAL
1 200 000 ordinary shares
ISSUED SHARE CAPITAL
900 000 Ordinary shares on 1 September 2016
7
Ordinary shares on 31 August 2017 5 292 000
RETAINED INCOME
Balance on 1 September 2016 147 370
Net profit after income tax 438 130
9
Ordinary share dividends
`
Balance on 31 August 2017
Gr 12 Accounting Revision Workbook
86
7.2.2 SO-FINE LTD
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations
Interest paid
Dividends paid
Income tax paid ?
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets ?
? ?
Change in investments
CASH FLOWS FROM FINANCING ACTIVITIES
? ?
? ?
Change in non-current liabilities
19
Net change in cash and cash equivalents ?
Cash and cash equivalents – opening balance ?
Cash and cash equivalents – closing balance ?
7.2.3 Calculate the percentage operating profit on sales.
3
Calculate the debt-equity ratio.
4
7.2.4 Calculate the dividends per share (DPS) of a shareholder who owned the same number of shares for the entire financial period.
4
Gr 12 Accounting Revision Workbook
87
7.3 CASTRO LTD
7.3.1 Comment on the price of R9,10 charged by Castro Ltd for the new shares issued.
3
7.3.2 Explain how the issue of new shares has affected the financial gearing and risk of Castro Ltd. Quote TWO financial indicators.
6
7.3.3 If Henry wanted to retain his 60% shareholding in the company, how many shares would he have had to buy?
3
How much would he have had to pay?
2
Henry decided NOT to buy these shares. Apart from the % shareholding, explain TWO reasons why he has made a mistake by not taking up this option.
Reason 1: Reason 2:
6
Gr 12 Accounting Revision Workbook
88
RONKI LTD
7.3.4 Comment on the liquidity of Ronki Ltd. Quote TWO financial indicators.
6
7.3.5 Comment on the price paid by Ronki Ltd for the repurchase (buy-back) of shares.
3
7.3.6 Explain THREE ways in which Henry has benefited from the repurchase of the shares by Ronki Ltd. Point 1: Point 2: Point 3:
6
TOTAL MARKS
85
Gr 12 Accounting Revision Workbook
89
ACTIVITY 8: Fixed Assets, Cash Flow and Interpretation (Mar 2018) (70 marks; 55 minutes)
8.1 NO. WORKINGS AMOUNT
(a) Additions to buildings
15
(b) Total depreciation on equipment
(c) Disposal of equipment at carrying value
8.2.1 WORKINGS ANSWER
Calculate the income tax paid.
5
8.2.2 Calculate the dividends paid.
3
8.2.3 Calculate the net change in cash and cash equivalents.
4
8.3 CASH EFFECTS OF FINANCING ACTIVITIES
10
Gr 12 Accounting Revision Workbook
90
8.4.1 Calculate the debt-equity ratio.
3
8.4.2 Calculate the earnings per share (in cents).
3
8.4.3 Calculate the return on average shareholders' equity (ROSHE).
5
8.5 Explain why the directors felt that the 630 cents offered on the shares repurchased was a fair price. Quote TWO financial indicators with figures.
4
8.6.1 The directors revised the dividend pay-out policy for the current financial year. Calculate the percentage of earnings distributed as dividends for each year to show this change.
4
Gr 12 Accounting Revision Workbook
91
8.6.2 Give ONE reason why the directors took this decision.
2
8.6.3 Explain why the shareholders may not be satisfied with the return they earn. Quote a financial indicator or figure(s).
3
8.7 Apart from the dividends, identify THREE good decisions. Explain the effect of each decision on the company. Quote figures.
GOOD DECISIONS (with figures)
EFFECT ON COMPANY
Decision 1:
Decision 2:
Decision 3:
9
TOTAL MARKS
70
Gr 12 Accounting Revision Workbook
92
(Q3, Nov 2018)
ACTIVITY 9: Fin. Statements & Audit Reports (75 marks; 60 minutes)
9.1 9.1.1
9.1.2
9.1.3
9.1.4
4
9.2.1 TEMBISO LTD STATEMENT OF COMPREHENSIVE INCOME (INCOME STATEMENT) FOR THE YEAR ENDED 28 FEBRUARY 2018
Sales
Cost of sales (4 856 000)
Gross profit
Other operating income 879 440
Gross income
Operating expenses
Salaries and wages 501 200
Operating profit
Interest income
Net profit before interest expense
28
Interest expense
Net profit before tax
Income tax
Net profit after tax 959 400
Gr 12 Accounting Revision Workbook
93
9.2.2 ORDINARY SHARE CAPITAL
AUTHORISED SHARE CAPITAL
1 600 000 ordinary shares
ISSUED SHARE CAPITAL
7
1 480 000 Ordinary shares on 28 February 2018 8 816 000
RETAINED INCOME
Balance on 1 March 2017 376 600
7
Ordinary share dividends
Balance on 28 February 2018
9.2.3 EQUITY AND LIABILITIES SECTION OF THE STATEMENT OF FIN. POSITION
SHAREHOLDERS' EQUITY
Ordinary share capital 8 816 000
Retained income
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
16
Trade and other payables
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
Gr 12 Accounting Revision Workbook
94
9.3 AUDIT REPORT
9.3.1
Point 1 Opinion
1
Point 2 IFRS and Companies Act
2
Point 3 Independent
2
9.3.2
Point 4 TWO examples of ethical responsibilities:
Example 1: Example 2:
4
Point 5 TWO examples of audit evidence:
Example 1: Example 2:
4
TOTAL MARKS
75
Gr 12 Accounting Revision Workbook
95
(Q4, Nov 2018)
ACTIVITY 10: Cash Flow and Interpretation (70 marks; 55 minutes)
10.1 CALCULATION OF FINANCIAL INDICATORS FOR 2018
10.1.1 Calculate: % operating expenses on sales
Workings Answer
2
10.1.2 Calculate: Acid-test ratio
Workings Answer
4
10.1.3 Calculate: % return on shareholders' equity
Workings Answer
4
10.2 FIGURES FOR 2018 CASH FLOW STATEMENT
10.2.1 Calculate: Change in investments
Workings Answer
2
10.2.2 Calculate: Income tax paid
Workings Answer
4
10.2.3 Calculate: Fixed assets sold (at carrying value)
Workings Answer
5
Gr 12 Accounting Revision Workbook
96
10.3 EXPLANATIONS ON CASH FLOW STATEMENT
10.3.1 Explain why the directors are satisfied with the improvement in cash and cash equivalents since 1 July 2016. Quote figures.
3
10.3.2 Identify THREE decisions that the directors made to pay for land and buildings.
Decision 1 (with figures)
Decision 2 (with figures)
Decision 3 (with figures)
6
Explain how these decisions affected the capital employed in the 2018 financial year. Quote figures.
Explain how these decisions affected the financial gearing in the 2018 financial year. Quote TWO indicators and their figures.
6
10.3.3 From the Cash Flow Statement identify ONE decision made by the directors in 2017 that they did NOT make in 2018, besides the points mentioned above. Give a possible reason for the decision in 2017.
Decision (with figures) Possible reason
3
Gr 12 Accounting Revision Workbook
97
10.4 DIVIDENDS, RETURNS AND SHAREHOLDING
10.4.1 Calculate: Total interim dividends paid for the 2018 financial year
Workings Answer
Calculate: Interim dividends per share for the 2018 financial year
Workings Answer
6
10.4.2 Calculate total dividends earned by Dudu Mkhize for the 2018 financial year.
Workings Answer
5
10.4.3 Calculate the minimum number of additional shares that Dudu should have bought.
Workings Answer
3
Gr 12 Accounting Revision Workbook
98
10.5.1
Explain why it was necessary to purchase properties in other provinces instead of in KZN.
2
Explain whether the decision to purchase these properties had the desired effect on sales. Quote figures.
3
Explain another strategy they used to solve the problem of low sales. Quote figures.
3
10.5.2 Give advice on what Ben Palo should say about the following topics:
Advice on what to say on earnings per share:
3
Advice on what to say on % return earned:
3
Advice on what to say on share price on the JSE:
3
TOTAL MARKS
70
Gr 12 Accounting Revision Workbook
99
(Q4, May/Jun 2019)
ACTIVITY 11: Audit Report; Company Financial Statements (80 marks; 60 minutes)
11.1 11.1.1
11.1.2
11.1.3
11.1.4
4
11.2 AUDIT REPORT
11.2.1 Choose the correct word from those given in brackets.
Give ONE reason.
3
11.2.2 Give ONE reason why the Companies Act requires public companies to be audited by an independent auditor.
2
11.2.3 Newspaper reports have indicated that Kego and Murray Associates have been found guilty of misconduct in terms of audit work done at several large firms. Explain how this may influence shareholders of Everest Ltd. State TWO points.
4
Gr 12 Accounting Revision Workbook
100
11.3 MVVS LTD
11.3.1 Statement of Comprehensive Income (Income Statement) for the year ended 31 March 2019
Sales
Cost of sales
Gross profit
Operating income
Rent income 99 500
Gross operating income
Operating expenses
Directors' fees 1 262 100
Water and electricity 218 000
Telephone 75 600
Audit fees 104 000
Sundry expenses 61 001
Operating profit
Interest income
Profit before interest expense
Interest expense
Net profit before tax 691 000
Income tax
Net profit after tax
53
Gr 12 Accounting Revision Workbook
101
11.3.2 NOTES TO THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
Fixed/Tangible Assets
Land and buildings
Vehicles Equipment
Carrying value at beginning of financial year
12 500 000 275 000 280 500
Cost 12 500 000 750 000 398 000
Accumulated depreciation - (475 000) (117 500)
Movements
Additions at cost - -
Disposals at carrying value - -
Depreciation - (94 250)
Carrying value at end of financial year
12 500 000
Cost 12 500 000 1 377 000
Accumulated depreciation -
8
Ordinary share capital
Authorised:
8 000 000 shares
Issued:
1 200 000 shares in issue at beginning
6
TOTAL MARKS
80
Gr 12 Accounting Revision Workbook
102
(Q5, May/Jun 2019)
ACTIVITY 12: Cash Flow (75 marks; 60 minutes)
12.1 12.1.1
12.1.2
12.1.3
12.1.4
4
12.2 KULFI LTD
12.2.1 RETAINED INCOME NOTE:
Balance on 1 March 2018
Net profit after tax
Ordinary share dividends
12
Balance on 28 February 2019
12.2.2 Calculate: Income tax paid
Workings Answer
4
Calculate: Dividends paid
Workings Answer
4
Gr 12 Accounting Revision Workbook
103
12.2.3 Cash effects of investing activities
9
Net change in cash and cash equivalents
4
12.2.4 Calculate: Acid-test ratio
4
Workings Answer
Calculate: Debt-equity ratio
4
Workings Answer
Calculate: % return on average shareholders' equity (ROSHE)
Workings Answer
5
12.2.5 The shareholders are satisfied with the improvement in the liquidity position. Quote THREE financial indicators (with figures) to support this statement.
6
Gr 12 Accounting Revision Workbook
104
12.2.6 The company increased the share capital by R840 000, and the loan by R550 000.
Explain how this affected the gearing and risk of the company. Quote TWO financial indicators.
12
Explain what the directors have done with this cash inflow. State TWO points.
4
12.2.7 Provide calculations to show the change in the pay-out rate.
4
Give ONE reason why many shareholders were satisfied with the change in policy. Quote figures.
2
12.2.8 Explain how the repurchase of the shares benefited Martha's shareholding. Quote figures.
4
TOTAL MARKS
75
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