Accounting Memo 1 (English)

Feb-March 2017 — Grade 12 / Matric — Accounting

Memo 2017 Grade 12 English Accounting Hub →

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1.1CONCEPTS

1.2VALUE ADDED TAX (VAT\

1.2.1Calculate the amount of VAT either receivable from or payable to SARS on 31 July 2016. 16 800 189 000 + 115 500 1 120 + 840 56 980 One part correct

1.2.2The owner wants to change the VAT amount on bad debts from R840 to 200. Give ONE reason why you would disagree with him. ny valid reason Possible responses for two marks: It is unethical to forward incorrect information to SARS in order to reduce

1.3BANK RECONCILIATION

1.3.1Calculate the correct balance o the Bank Account in the General Ledger on 31 July 2016. Provisional Bank balance R16 785 Accept alternative presentations such as

1.3.2Bank Reconciliation Statement as at 31 Jul Alternati DEBIT REDIT Balance as per bank

1.3.1(24 830\ 24 830 1 Foreign items, max 2 if marked is earned in bank calculation above 53 960 53 960

1.3.3Explain ONE internal control measure that the business should implement to ensure that this does not happen in the future. Any valid internal control measure two or zero marks (no part marks\ Possible

2.1CONCEPTS

2.1.1Spe cific identifi

2.1.2irst In irst Out/FIFO

2.1.3Weighted Average Accept abbreviations if understandable

2.2.1Calculate the unit price of cricket bats 1 Jul 420 000 / 350 = R1 200

2.2.2Calculate the value of the stock on hand on 30 June 2016 using the weighted average method Net purchases = R 4 272 000 three marks Purchases with carriage = R4 412 900 two marks Net purchases with carriage = R4 382 400 four marks

2.2.3Calculate the gross profit on 30 June 2016. See

2.2.24 802 400 641 700 4 160 700 part correct three marks 5 400 000 4 160 700 R1 239 300

2.2.4Calculate how long (in days\ it is expected to sell the closing stock of 465 cricket bats. Use the closing stock in your calculation. See

2.2.2One part correct 641 700 56,3 days 4 160 700 See

2.2.3IF UNITS ARE USED mark mark mark method mark 3 000 x 365 = 56,6 days 3 480

2.2.5Provide a calculation to support Andr s concern about the control of cricket bats. 3 480 One part correct (350 + 3 150 20\

2.3Identify ONE problem relating to each branch. Quote figures to support your answer. In each case, offer Bennie advice. BRANCH Problem Figures Advice Parys Stock piling 75%

3.1GANDHI COME S TAT EMENT FOR THE YEAR ENDED 28 FEBRUAR Sales COS 400 000 Cost of sales

3.2.1ORDINARY SHARE C APITAL AUTHORISED SHARE C APITAL 1 200 000 ordinary shares ISSUED SHARE C APITAL

3.2.2TAINED OME Balance on 1 March 2016 4,15

3.20(ASP\ Funds used for share buyback (250 000 x 0,95 (237 500\ One part correct Net profit after tax

3.3QUIT AND LIABILITIES SECTION OF THE BALAN CE HEET SHAREHOLDERS EQUITY Operation 600 200

3.2.2SARS: income (396 800 360 000\ Can be part of T&OP One part correct 36 800

3.4.1Calculate B Sly's percentage shareholding in the company before and after the share buyback. Before the buyback: 000/1 200 000 x 100% = 40% After the buyback: 000/950 000 x 100% = 50,5% Accept 51%

3.4.2Explain why the other shareholders will be concerned about this transaction. Any valid explanation Possible responses for two marks: After the share buyback she is now the majority shareholder. She can have her say in influential

4.1CONCEPTS

4.1.1Outflow of cash

4.1.2Working c apital Accept net working capital

4.1.3Depreciation

4.1.4flow of cash

4.2BRAZILIA LTD

4.2.1State ONE purpose of a Cash Flow Statement. One valid explanation Award part marks for partial/incomplete answers It provides users of financial statements with information regarding the inflow and outflow of the cash resources of the company.

4.2.2CASH FLOW STATEMENT FOR THE YEAR ENDED TOBER 2016 CASH FLOW FROM OPERATING ACTIVITIES Operation Cash generated from operations 2 844 200 Interest paid (336 000\ Taxation paid

4.2.3Calculate the acid test ratio One mark one mark (1 186 000 735 000 1 236 000 0,6 One

4.3GRAYSON LTD AND JONI LTD

4.3.1Which company is NOT handling its working capital effectively? Joni Ltd Explain what the main problem is in respect of their working capital, by quoting TWO financial indicators. Explanation No part marks

4.3.2The companies have made different decisions regarding the use of loans. Comment on the degree of risk and financial gearing. Give ONE financial indicator in EACH case for EACH company. DEGREE OF RISK Financial indicator with figures

4.3.3The dividend policy used by each company has been maintained for the past four years. Explain the policy used by EACH company. Provide figures to support your explanation in EACH case. EXPLANATION with figures

4.3.4Should EACH company be satisfied with its share price on the JSE? Explain. Provide figures. EXPLANATION with figures Grayson Ltd No Explanation Figure

5.1MOSES MANUFACTURERS

5.1PRODU CTION COST STATEMENT 30 APRIL 2016 Direct labour cost Direct material cost 600 + 555 000 560 Operation

5.1Complete the bridged (shortened\ Income Statement to calculate the net profit for the year ended 30 April 2016. Gross profit 1 250 000 Selling and distribution cost 609 850 + 4 840 * if adds to figure above

5.1+ 7 260 * if adds to figure above (36 300 x 12/60\ (437 560\ One part correct Ignore brackets, mark figure only Net profit

5.2UNIT COSTS AND BREAK EVEN ANALYSIS

5.2.1Explain the difference between fixed cost and variable cost Any valid explanation Two or zero marks. No part marks Fixed costs remain the same irrespective of the number of items manufactured. Variable costs vary in direct proportion to the number of items manufactured.

5.2Calculate the break even point for 2017. 000 one mark x 5,4 one mark 432 000

5.2.3Comment on the break even point and the level of production for 2016 and 2017. Explain why the owner should be satisfied or not. 2016 the break even point was 6 000 units and they produced units. The business

5.2.4Identify the variable cost that should be of great concern to the owner. Explain and provide a calculation to support your answer. Direct labour cost Figures Explanation No part marks Direct labour cost increased from R3,50 to R4,05

5.2.5Despite 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.

6.1Calculate the expected monthly percentage of goods sold on credit. 70 000 + 17 500 1 = 80% one part correct 87 500 two marks 64 000/ 64 000 + 16 000

6.3.2Suggest ONE solution for this problem. Expected responses Part marks can be awarded for partial answers Offer discounts to encourage early/prompt payments Charge interest on overdue accounts Proper screening of debtors to ensure debtors is

6.4.1(a\ Payment to creditors (70 000 + 17 500\ 87 500 x 100/125 = 70 000 x 95% OR 87 500

6.4.2Calculate the percentage increase in rent on 1 March 2017. 12 544 Two marks / zero x 100 = 12% one part correct 11 200

6.4.3

6.5Identify 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

Topics Identified

VATDepreciationInventoriesManufacturingBudgetingFinancial StatementsCompaniesDebtors ControlCreditors Control

Mark Allocation

Total75 marks

Paper information

SubjectAccounting

Year2017

SessionFeb-March

TypeMemo

PaperPaper 1

LanguageEnglish

Pages16

Downloads3

Examination context

Decade2010s

Years ago9y

Season—

Start day—

Exam period—

Days since exam—

About Accounting examination preparation

Grade 12 Accounting tests bookkeeping, financial statements, and interpretation of corporate data. Paper 1 covers VAT and manufacturing accounts, while Paper 2 tests partnerships and corporations.

Every available Grade 12 Accounting past paper and memorandum is collected in the Accounting hub at accounting.freemode.co.za — browse all years, sessions and languages in one place.

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accurate accounting calculations

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