Accounting Memo 1 (English)

Exemplars 2014 — Grade 12 / Matric — Accounting

Memo 2014 Grade 12 English Accounting Hub →

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Q1— Section header —

1.1.1Indicate the ost accounts that would be affected by the following in a manufacturing business: tails: Cost account affected (a\ Rent paid for factory buildings Factory overhead

1.1.2ACE CALCULATORS Production Cost Statement for the year ended 28 February 2013 Direct material cost 161 000 Direct labour cost 636 000 Prime cost 797 000 Factory overhead cost

1.1.3

1.2.1Calculate the break even point for the year 972 000 = 249 230 or 249 231 6,60 2,70

1.2.2Despite the fact that the factory workers were given a 10% wage increase, the direct material cost per unit has dropped by 50 cents per unit. What could have caused the difference? The workers are operating very efficiently, possibly because Mark has

1.2.3The fixed costs per unit dropped from R1,90 in 2012 to R1,80 in 2013. Should Mark be satisfied with this? NO What comment would you make to Mark about the control of this item? Provide figures to support your answer.

1.2.4Regarding the incident concerning the office manager, Alex Fynn: Will this be a concern to you? Yes Give a reason for your answer: It appears that Alex Fynn might have taken a bribe from Apex Products

Q2— Section header —

2.1Make a list of the changes to Aqua Wholesalers account in the Creditors Ledger which the bookkeeper should process to correct the errors or omissions. Give a brief description in the Details column and

2.2Creditor s Reconciliation Statement of A qua Wholesalers on July Details Amount Balance per statement received from Aqua Wholesalers

2.3The owner of Organic Traders is unhappy with the errors which occurred and resulted in inaccurate records in their books. Briefly explain TWO measures that Organic Traders can implement in order to maintain good control over their creditors and to avoid this from

2.4Organic Traders is experiencing cash problems and is currently in a position where they are not able to pay their creditors on time. Aqua Wholesalers has granted them a credit limit of R40 000. All their current

Q3— Section header —

3.1Explain to the shareholders what the main difference is between a projected income statement and a Cash Budget Explanation of projected income statement The projected income statement projects the profits and

3.2Name TWO items that could be included in other operating expenses Any TWO valid items Possible answers: Packing material Stationery Printing Rates Electricity and water

3.3Debtors Collection Sc hedule for July and August 2013 Credit sales July collections August collections

3.4.1Calculate the % increase in sales in September 2013. 240 000 1 200 000 = 20% Operation one part correct

3.4.2Calculate the rent income amount for September 2013. Note that the company is budgeting for a 12% increase in rent starting September 2013. 8 500 + 12% = R9 520

3.4.3

3.4.4Calculate the amount that will be paid to creditors during September. Operation one part correct 2 000 000 x x 80% = R1 000 000

3.4.5Calculate the amount that will be paid for interim dividends in September 2013. 235 000 x 40 cents = R94 000 Operation one part correct

3.4.6Calculate what the buy back of shares will cost the company in September 2013. 55 000 x R15,50 = R852 500 Operation one part correct

3.4.7

3.5.1What does this amount represent, since the financial year end of this company is annually at the end of February? A provisional tax payment

3.5.2How will this amount be calculated? It will be calculated on the profits projected in the projected income statement

3.6.1Explain why you believe the shareholders feel this way regarding the collection from debtors. Explanation The credit terms of the company is 30 days yet only 75% of all debtors are paying within this time.

3.6.2Suggest TWO measures that can be introduced to improve the situation. TWO measures Charge interest on overdue accounts Offer bigger discount for prompt payment Send regular reminders

3.7Explain what you would say to the directors about each of the following items. Explain ONE point of advice in each case. COMMENT TO DIRECTORS ADVICE Advertising

Q4— Section header —

4.1PROSPECT LIMITED EXTRACT FROM THE BALANCE SHEET ON 31 MARCH 2013 Note s 7 & 8 Shareholders equity 3 616 000 Ordinary share capital

4.2NOTES TO THE FINANCIAL STATEMENTS Note 7. ORDINARY SHARE CAPITAL ISSUED 400 000 ordinary shares in issue at beginning of year 250 000

4.3Net asset value per share on 31 March 2013 after the repurchase of shares See 4.1 See 4.2 Operation, one part correct R3 616

4.4In your opinion, are the complaints by the Gaptu family about the dividends valid or not? Explain Excellent answer = 4 marks; Good = 3; Satisfactory = 2; Poor = 1; Incorrect = 0 No. The company has been paying out just less than 50% of earnings over

4.5Have the Gaptu family been offered a fair value for their shares? Explain. Excellent answer = 3 marks; Good = 2; Satisfactory/Poor = 1; Incorrect = 0 Yes. The price offered of R10 70 is 30 cents more than the price on the JSE

4.6In your opinion, will the repurchase of the shares from the Gaptu family benefit the remaining shareholders or not? Explain. Excellent answer = 5 marks; Good = 4/3 ; Satisfactory = 3/2 ; Poor = 1; Incorrect = 0

Q5— Section header —

5.2BELLCO LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2013 Cash effects of operating activities 293 000 Cash generated from operations 062 000 Interest paid

5.3.1Calculation of cid test ratio Operation, one part correct 745 000 : 1 841 600 0,9 : 1

5.3.2Calculation of % return on average shareholders equity Operation, one part correct 820 000 100 18,6%

5.3.3Calculation of debt equity ratio Operation, one part correct 000 000 : 011 0,3 : 1

5.3.4

5.4The directors are pleased that the operating efficiency of the business has improved. Quote and explain TWO financial indicators to support their opinion. Good answers = 2 marks each; partial = 1 mark; incorrect = 0

5.5According to the Companies Act (Act 61 of 1973\, the directors may repurchase shares only if the liquidity of the business is acceptable. Quote and explain THREE financial indicators that provide evidence that

5.6One of the directors has suggested that they finance the expansion by increasing loans instead of issuing new shares. Quote and explain TWO financial indicators to support his opinion. Good answers = 2 marks each; partial = 1 mark; incorrect = 0.

5.7Explain in your own words why it is necessary for the independent auditors to mention internal controls under the section on Directors Responsibility. Good answers = 2 marks each; partial = 1 mark; incorrect = 0.

Q6— Section header —

6.1.1Calculate the profit/loss on the disposal of the office computers sold on March 2013 600 x 9/12 = R4 650 Accumulated depreciation = R9 400 + R4

6.1.2Calculate the value of stock on hand of the: Hypa laptops , according to the specific identification method: 18 x R10 500 = R189 000

6.1.3KLOOF COMPUTERS (PTY\ LTD Income Statement for the year ended 30 June 2013 Sales 700 000 Cost of sales 000\ Gross profit 600 000 Other income

6.2Explain ONE problem relating to each salesperson. Provide figures to support your explanations. Explanation of problem (with figure GUGU Explanation of problem Figure(s\ She has not sold many laptops (only 9\

Topics Identified

VATDepreciationInventoriesManufacturingBudgetingFinancial StatementsPartnershipsCompaniesDebtors ControlCreditors Control

Mark Allocation

Total300 marks

Paper information

SubjectAccounting

Year2014

SessionExemplars

TypeMemo

PaperPaper 1

LanguageEnglish

Pages18

Downloads5

Examination context

Decade2010s

Years ago12y

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.

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