NATIONAL

SENIOR CERTIFICATE

GRADE 11

NOVEMBER 2022

ACCOUNTING P2

MARKS: 150

TIME: 2 hours

This question paper consists of 10 pages, including a

formula sheet and an 8-page answer book.
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2 ACCOUNTING P2 (EC/NOVEMBER 2022)

INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

1. Answer ALL questions.

2. A special ANSWER BOOK is provided in which to answer ALL questions.

3. Show ALL workings to earn part-marks.

4. You may use a non-programmable calculator.

5. You may use a dark pencil or blue/black ink to answer questions.

6. Where applicable, show ALL calculations to ONE decimal point.

7. If you choose to do so, you may use the Financial Indicator Formula Sheet attached
at the end of this question paper. The use of this formula sheet is NOT compulsory.

8. Write neatly and legibly.

9. Use the information in the table below as a guide when answering the question
paper. Try NOT to deviate from it.

QUESTION TOPIC MARKS MINUTES

Cash transactions and Creditors
1 40 30
Reconciliations

2 Cost Accounting 40 30

3 Budgeting 45 40

4 Fixed Assets 25 20

TOTAL 150 120

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(EC/NOVEMBER 2022) ACCOUNTING P2 3

QUESTION 1: CASH TRANSACTIONS AND CREDITORS RECONCILIATION

(40 marks; 30 minutes)

The information relates to Beauty Stores, a business that sells cosmetic products.

1.1 RECORDING CASH TRANSACTIONS

Beauty has adapted her accounting system to make cash payments using
Electronic Funds Transfers (EFTs). She uses the formal monthly bank statement,
available on the 26th of each month, to update her cash journals.

REQUIRED:

1.1.1 State THREE advantages of using electronic funds transfers (EFTs). (3)

1.1.2 Explain TWO aspects of the business environment that Beauty had to
change or adapt, to implement this system and to ensure that it functions
effectively. (4)

1.1.3 Update the Cash Journals by completing the table provided in the Answer
Book. (20)

INFORMATION:
A. On 31 October 2021, the provisional totals in the cash journals were:

Cash Receipts Journal Cash Payments Journal

R113 800 R98 400

B. Extract of the Bank Statement on 26 October 2021:

DETAILS AMOUNT
Debit order: Frere Municipality R 2 180
Cash handling fees 195
Deposit: L. Loren 8 200
EFT charges 155
EFT: Zema Traders 12 300
Deposit L. Slomo 3 320
Interest on debit balance 210
Hazard Insurers 1 970

• The debit order to Frere Municipality was for rates and taxes.
• The deposit from L. Loren is for the monthly rent income.
• The EFT to Zema Traders was for trading stock purchased.
The bookkeeper forgot to record this entry in the correct journal.
• The deposit from debtor L. Slomo, is in settlement of his account of
R3 600.
• R1 340 of the debit order to Hazard Insurers is for the business’s
insurance. The balance is for the owner’s personal vehicle.

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4 ACCOUNTING P2 (EC/NOVEMBER 2022)

1.2 CREDITORS RECONCILIATION

Beauty Stores buys cosmetic products from Vuyi Suppliers on credit, and
received a statement of account October 2021.

REQUIRED:

Complete the table provided in the ANSWER BOOK to show the effect of each
error or omission. Indicate an increase (+) or decrease (-) next to each amount. (13)

INFORMATION:

Balance as per the statement received from Vuyi Suppliers: R26 070
Balance of the Creditor’s Ledger account of Vuyi Suppliers
R41 680
in the books of Beauty Stores.

ERRORS AND OMISSIONS:

A. An invoice for R7 250 was incorrectly reflected as R2 750 on the statement

received from Vuyi Suppliers.

B. An allowance of R840 for damaged goods was recorded as an invoice in

the creditor’s ledger account of Vuyi Suppliers in the books of Beauty
Stores.

C. Beauty Stores recorded a 7,5% discount when an EFT payment of R8 000

was made. This did not appear on the statement. Vuyi Suppliers stated that
the discount should have been 5%, and will include this on the next
statement.

D. Beauty Stores reflected a credit invoice of R7 600 in the Creditor’s Ledger

account of Vuyi Suppliers. This was for goods purchased from Vuyisile
Dealers.

E. Vuyi Suppliers did not deduct the 10% trade discount on a credit invoice for
goods purchased. The correct net amount of R8 550 was recorded in the
books of Beauty Stores.

F. An invoice for goods purchased for R3 380 30 October 2021 was not on the
statement from Vuyi Suppliers. The statement was dated 28 October 2021.

40

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(EC/NOVEMBER 2022) ACCOUNTING P2 5

QUESTION 2: COST ACCOUNTING (40 marks; 30 minutes)

2.1 MAHLAPE MANUFACTURERS

The business manufactures winter jackets. The financial year ended on
28 February 2021.
REQUIRED:
2.1.1 Refer to Information A, B and C
Calculate the following for the financial year:
• Direct material cost (6)
• Direct labour cost (7)
2.1.2 Refer to Information D
The bookkeeper calculated the total factory overhead cost, but neglected
to take certain factors into consideration. Calculate the correct factory
overhead cost by taking into account the errors and omissions. Indicate
an increase (+) or decrease (-) to the total given. Show all workings. (9)
2.1.3 Prepare the Work In Progress Stock account in the General Ledger. (8)
INFORMATION:
A. Stock balances:

28 FEBRUARY 2021 1 MARCH 2020

R R
Raw material 33 200 27 500
Work-in-progress 27 420 23 444

B. Transactions for the year:

(i) Raw material purchased for cash and on credit was R263 400.

(ii) Damaged raw material worth R9 200 was sent back to creditors.

(iii) Delivery cost on cash purchases of raw material, R7 500.

C. Details of workers in production:

Number of workers 5
Normal hours worked (basic) 1 520 hours per worker
Normal time rate R30 per hour
Total overtime hours for all workers 420 hours
Overtime rate 1,6 time more than normal time

The business contributes 1% to the UIF and 9% to a pension fund on behalf

of all employees, based on their total earnings.

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6 ACCOUNTING P2 (EC/NOVEMBER 2022)

D. The bookkeeper calculated the factory overhead costs as R106 760.

The following errors and omissions were noted:
(i) The closing stock of factory indirect material of R3 800 was not taken
into account.
(ii) R22 200 of the water and electricity expense was allocated to the
factory. This was 50% of the total expense, but 60% should have been
allocated to the factory.
(iii) The total rent expense of R75 600 was entered in the factory overhead
cost account. It should have been shared in the ratio 4 : 2 : 1 (4 parts
to the factory).

2.2 MELINDA’S TOY SHOP

Melinda Botha, the owner wants to assess the progress of the business and has
provided the following data regarding the production and sales of toy cars.
The toy cars are sold at a profit mark-up of 50% on cost. The financial year ended
on 30 June 2021.
REQUIRED:
2.2.1 Calculate the break-even point for the year ended 30 June 2021. (4)
2.2.2 Explain whether Melinda should be satisfied with the level of production
achieved for this financial year. Quote figures. (3)
2.2.3 Melinda is concerned about the control over direct labour cost per unit.

• Explain why she may be concerned. Quote figures. (2)

• Provide ONE suggestion on how she can improve the control over this
cost. (1)
INFORMATION:
30 June 2021 30 June 2020
TOTAL UNIT PRICE UNIT PRICE
R R R
Direct Material Cost 76 000 38,00 32,00
Direct Labour Cost 64 000 32,00 22,00
Selling and Distribution Cost 30 000 15,00 12,00
TOTAL VARIABLE COST 170 000 85,00 66,00
Factory Overhead Cost 44 000 22,00 20,00
Administration Cost 16 000 8,00 8,00
TOTAL FIXED COST 60 000 30,00 28,00

SALES 250 000 125,00 110,00

Units produced and sold 2 000 units 1 500 units
Break-even point ? 955 units

40

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(EC/NOVEMBER 2022) ACCOUNTING P2 7

QUESTION 3: BUDGETING (45 marks; 40 minutes)

PIONEER STORES

Information from the records is for the budget period ended 31 December 2021.

REQUIRED:

3.1 Complete the Debtors Collection Schedule. Refer to the spaces with an *. (9)

3.2 Complete the extract of the Cash Budget for November and December 2021,
that is presented in the ANSWER BOOK. (22)

3.3 Calculate the following:

3.3.1 The amount of the loan to be received on 1 December 2021. Note that
interest at 11% p.a. is paid at the end of each month (4)

3.3.2 The % increase in salaries and wages (4)

3.4 Provide Shirley with TWO suggestions on how she can ensure that only reliable
people are granted credit, and TWO ways to improve collections from debtors. (6)

INFORMATION:

A. Total sales figures for the period ended December 2021:

Goods are sold at a profit mark-up of 50% on cost.

ACTUAL BUDGETED
MONTH
CASH CREDIT CASH CREDIT
October R216 000 R504 000
November R207 000 R483 000
December R222 000 R518 000

B. Credit sales are collected according to the following trend:

• 40% in the month of sale (these debtors receive a 5% discount).
• 40% in the month following the month of sale.
• 18% two months after the sales month.
• 2% is written off as bad debts.

C. Purchases and payment to creditors:

• Stock sold is replaced in the month of sale (a base stock is
maintained).
• All purchases of trading stock are made on credit.
• Creditors are paid in the month following the month of purchase.

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8 ACCOUNTING P2 (EC/NOVEMBER 2022)

D. Additional information:
• Rent income is expected to increase by 8% p.a. from 1 December
2021.
• Insurance will increase by 5% p.a. from 1 December 2021.
• Interest on fixed deposit for the year is R9 600. and is received in three
equal instalments on 30 September 2021, 31 December 2021 and
31 March 2022 respectively.
• Other operating expenses will decrease by R2 500 per month due to
Covid-related closures.
• The owner will also decrease his drawings from 1 December 2021, to
R5 000 per month. 30% of this will be in the form of stock.

45

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(EC/NOVEMBER 2022) ACCOUNTING P2 9

QUESTION 4: FIXED ASSETS (25 marks; 20 minutes)

The information relates to Malusi’s Delivery Services, that provides a delivery service
for local hardware suppliers. The financial year ended on 28 February 2021.
REQUIRED:
4.1 Calculate the total depreciation on vehicles and on equipment. (13)

4.2 Malusi wants to sell two of the delivery vehicles, and replace them with a later
model, bigger truck. His wife feels that this is not a good idea.

4.2.1 Provide TWO possible reasons that Malusi can use to convince his wife
that this is a good decision. (4)

4.2.2 Provide ONE reason in support of his wife’s feelings. (2)

4.3 Malusi is concerned about the use of the vehicles in relation to the progress of
the business.
Identify TWO problems from the information provided. Quote figures. In each
case, provide a solution to the problem identified. (6)
INFORMATION:
A. On 1 March 2020, the business owned five delivery vehicles.
On 1 June 2020, an additional delivery vehicle was purchased on credit.

B On 1 January 2021, old equipment, cost R115 000, was donated to an old age
home. The accumulated depreciation on the equipment donated was R84 200
on 1 March 2020.

C. Depreciation policy:
• Vehicles are depreciated at 20% p.a. on cost.
• Equipment is depreciated at 15% p.a. on carrying value.

D. Additional information from the records:

28 February 1 March 2020

2021 R
R
Delivery vehicles (cost) 1 600 000 1 260 000
Accumulated depreciation on vehicles ? 756 000
Equipment (cost) 517 000 632 000
Accumulated depreciation on equipment ? 365 000

Repairs and maintenance on vehicles 76 800 76 800

Petrol and oil 187 680 192 000
Salary to drivers 80 850 77 000
Sales 816 000 960 000

25

TOTAL: 150

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10 ACCOUNTING P2 (EC/NOVEMBER 2022)

GRADE 11 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET

Gross profit 100 Gross profit 100 Net profit 100

x x x
Sales 1 Cost of sales 1 Sales 1

Operating expenses 100 Operating profit 100

x x
Sales 1 Sales 1
Total earnings by partner 100 Net profit 100
'
x x
Partner s Average equity 1 Average owners equity 1
(Current assets – Inventories) : Current
Current assets : Current liabilities
liabilities

(Trade and other receivables + Cash and cash equivalents) : Current liabilities

Average debtors 365 Average creditors 365

x x
Credit sales 1 Credit purchases 1

Average inventories 365 or 12 Cost of sales

x
Cost of sales 1 Average inventories

Non-current liabilities : Owners’ equity Total assets : Total liabilities

Total fixed costs .

Selling price per unit – Variable costs per unit

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