Confidential

SENIOR CERTIFICATE EXAMINATIONS/

NATIONAL SENIOR CERTIFICATE EXAMINATIONS

ACCOUNTING P2

MAY/JUNE 2024

MARKS: 150

TIME: 2 hours

This question paper consists of 13 pages,

a formula sheet and a 12-page answer book.

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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. A Financial Indicator Formula Sheet is attached at the end of this question

paper.

4. Show ALL workings to earn part-marks.

5. You may use a non-programmable calculator.

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

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

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

1 Reconciliations 30 25

2 VAT and Stock Valuation 40 30

3 Cost Accounting 40 30

4 Budgeting 40 35

TOTAL 150 120

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QUESTION 1: RECONCILIATIONS (30 marks; 25 minutes)

1.1 BANK RECONCILIATION

The information relates to Scot Traders, owned by Scot Salaza. The business
receives the official Bank Statement on the 25th of each month.

REQUIRED:

1.1.1 Calculate the correct Bank Account balance on 31 May 2024. (8)

1.1.2 Prepare the Bank Reconciliation Statement on 31 May 2024. (6)

1.1.3 Scot has been convinced by his bank manager that he should use
online banking for his business, particularly as this makes payments
easier through the use of electronic funds transfer (EFT). Scot is
planning to employ Kiki to be responsible for all matters related to
online banking.

Explain TWO important instructions that Scot should give to Kiki to

ensure that corruption does not occur with regard to the processing of
EFTs. (4)

INFORMATION:

A. The bookkeeper calculated the provisional bank balance as a positive

R9 050 on 31 May 2024 using the opening Bank Account balance and
totals from the Cash Receipts Journal (CRJ) and the Cash Payments
Journal (CPJ), before receiving the May 2024 Bank Statement.

B. Figures from the Reconciliation Statement on 30 April 2024:

Unfavourable balance as per Bank Statement R1 550
Outstanding deposits: 16 April 2024 4 000
26 April 2024 15 000
Outstanding EFTs: No. 632 7 800
No. 633 5 480
Favourable Bank Account balance as per General Ledger 4 170

NOTE:
 The deposit on 16 April 2024 for R4 000 and EFT 632 for R7 800 were
reflected on the May Bank Statement.
 The deposit on 26 April 2024 appeared as R10 000 on the Bank
Statement. The cashier at the time was dismissed for theft, and this
amount has to be written off.
 EFT 633 appeared on the May Bank Statement with the correct amount
of R4 580. 2024

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C. A comparison of the May 2024 Bank Statement with the Cash Journals
revealed the following:
(i) Bank charges, on the Bank Statement only, amounted to R310.
(ii) A debit order for advertising, R1 780, was not recorded in the CPJ
and was duplicated on the Bank Statement. The bank will correct the
error next month.
(iii) The Bank Statement reflected a direct deposit into the business bank
account for R25 000. This is an error by the payer. The bank will
reverse the entry next month.
(iv) Interest on fixed deposit, R1 060, appeared on the statement but not
in the journals.
(v) A deposit of R17 500 appeared in the CRJ, dated 27 May 2024.
(vi) EFT 819 for R11 880 was recorded in the CPJ on 28 May 2024.
D. The May 2024 Bank Statement reflected a balance of R?

1.2 DEBTORS' RECONCILIATION

Sidney Stores is a general dealer selling groceries for cash and on credit.
REQUIRED:
Calculate the correct balance for EACH debtor on the list provided. Negative
balances must be shown in brackets or with a '–' sign. (12)
INFORMATION:
A. Extract from the debtors' list (before errors and omissions):
A. Judy DL1 R27 750
B. Benior DL2 (400)
C. Oliver DL3 19 300
D. Fiery DL4 2 900

B. Errors and omissions

(i) A receipt, R9 000, from Judy was posted in error to the Debtors'
Ledger Account of Benior.
(ii) Goods returned by Fiery, R7 100, appeared correctly in the DAJ.
This, however, was posted as R710 to his account in the Debtors'
Ledger.
(iii) An invoice for R3 000 to Oliver was correctly recorded in the DJ.
This, however, was erroneously posted as a receipt to his account in
the Debtor's Ledger.
(iv) During a sales promotion at Sidney Stores, Oliver bought goods on
credit for R2 400 after being granted a 25% trade discount. However,
the bookkeeper entered the gross amount in error to the DJ and
posted this accordingly to the Debtor's Ledger.
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QUESTION 2: VAT AND STOCK VALUATION (40 marks; 30 minutes)

2.1 VAT

The information relates to Mphati Enterprises owned by partners John, Jacob

and Jeramiah. The business is registered for VAT. They buy and sell standard
and zero-rated products for cash and on credit. The standard VAT rate is 15%.

REQUIRED:

2.1.1 Calculate the VAT amount on the goods sold by the business. (4)

2.1.2 Calculate the amount payable to or receivable from SARS on

30 April 2024. (7)

INFORMATION:

A. Balance: Amount due by SARS on 1 April 2024: R5 340.

B. Transactions affecting VAT calculations for April 2024:

VAT VAT VAT
EXCLUSIVE AMOUNT INCLUSIVE
R R R
Purchases of stock: 730 000
 Standard-rate products 548 000 82 200 630 200
 Zero-rated products* see note below 182 000

Total sales* see note below 839 800

Debtors' accounts written off 31 510
Discounts received from creditors 4 800

*NOTE: All the zero-rated goods purchased were sold at 10% below cost
during a sales promotion event. This amount is included in the
total sales figure. There were no other zero-rated goods sold
during April 2024.

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INVENTORY VALUATION

The information relates to Cell Scene Ltd. Nadine is the chief executive officer (CEO).
The financial year ended on 29 February 2024.

 Cell Scene Ltd buys and sells two models of cellphones. CLEO is more expensive,
while BRUMA is a basic and cheaper phone.
 All stock is valued using the specific identification valuation method.
 All goods are sold for cash or on credit card.
 There were no units missing during the year due to effective internal control measures.

REQUIRED:

2.2 In addition to the two models of cellphones currently being sold, the directors are
investigating whether a 3rd model, the LITCHI, should be imported from the USA.
The first batch to be ordered would consist of 300 LITCHI phones. See
Information A. Calculate the expected cost price of one LITCHI phone in rands
per unit. (5)

2.3 Calculate the total value of the closing stock of the CLEO and BRUMA phones on
29 February 2024, using the specific identification method. (6)

2.4 Calculate the average stock turnover rate for the CLEO phone for 2024. (6)

2.5 The directors took decisions to adjust the mark-up % on CLEO and BRUMA
phones for the 2024 financial year. Explain how these decisions impacted on the
gross profit and cash flow of the company as well as on the stock turnover rate of
each model over the past two years. Quote figures and trends. (8)

2.6 If the directors go ahead with the LITCHI phones and order a lot more in the
future and sell it at a mark-up of 40% on cost, how could this impact on the sales
of the CLEO and BRUMA phones? Explain, quoting figures to support your
opinion. (4)

INFORMATION:

A. SUGGESTED IMPORTING OF THE LITCHI PHONES

Unit price in US dollars $280

Number of LITCHI phones in first batch ordered 300 units
Exchange rate $1,00 = R17,50
Customs duty/taxes to be paid on delivery 12%
Total shipping costs from the USA to South Africa R303 600

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B. EXTRACT FROM THE STOCK & SALES RECORDS

CLEO BRUMA
2024 2023 2024 2023
Units on hand at
270 400 200 300
beginning of year
Units purchased 2 265 1 345 2 450 2 440

Units sold during the year 2 180 1 475 1 730 2 540

Units on hand at end of
? 270 920 200
year
Value of closing stock at
? R2 160 000 ? R400 000
year-end

Cost price per unit R8 000 R8 000 R2 500 R2 000

Selling price per unit R11 200 R12 000 R4 250 R3 000

% mark-up 40% 50% 70% 50%

Total sales R24 416 000 R17 700 000 R7 352 500 R7 620 000
Gross profit R6 976 000 R5 900 000 R3 027 500 R2 540 000

Stock turnover rate ? 4,4 times 3,1 times 10,2 times

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QUESTION 3: COST ACCOUNTING (40 marks; 30 minutes)

3.1 Choose a cost category from COLUMN B that matches the example in
COLUMN A. Write only the letter (A–D) next to the question numbers
(3.1.1 to 3.1.3) in the ANSWER BOOK.

COLUMN A COLUMN B
3.1.1 Delivery expenses A factory overhead

3.1.2 Office stationery B selling and distribution

3.1.3 Salary of the factory supervisor C direct material

D administration (3)

NARDO MANUFACTURERS

The business manufactures uniforms for construction workers. The financial year ended
on 29 February 2024.

REQUIRED:

3.2 Calculate the correct factory overhead cost by taking into account the errors and
omissions. (7)

3.3 Complete the Production Cost Statement for the financial year. (10)

INFORMATION:

A. Factory overhead costs:

The bookkeeper calculated the factory overhead cost as R258 200.

The following errors and omissions were identified and must be taken into account:

(i) Water and electricity expense was omitted from the factory overhead cost.
75% of this expense must be allocated to the factory and the remaining 25%
to administration. R9 600 was correctly allocated to administration.

(ii) The total rent expense, R142 800, was recorded in the Factory Overhead
Cost Account. This should have been shared according to floor area as
follows:

Factory Sales Department Administration

220 m2 120 m2 80 m2

(iii) Insurance expense, R48 000, was allocated to factory overheads in error
using the ratio 4 : 2 : 1. However, the correct ratio is 5 : 2 : 1.

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B. Raw material stock:

Stock of raw material (fabric) transferred to the factory is valued using the FIFO
method. Stock records revealed the following:

Quantity Cost per

Total cost
(metres) metre
Stock on 1 March 2023 8 000 m R10,50 R84 000
Purchases of fabric 62 000 m R739 600
June 2023 42 000 m R11,80 R495 600
October 2023 20 000 m R12,20 R244 000
Total fabric available 70 000 m R823 600
Issued to factory 59 500 m ? ?

C. Work-in-progress stock:

29 Feb. 2024 28 Feb. 2023

Balance ? R30 700

D. Production:

20 200 uniforms were produced during the financial year at a cost of R79,00 per
uniform.

This question is continued on the next page.

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KYLA'S HIKING GEAR STORE

The business, owned by Kyla Coetzee, makes hiking bags and hiking jackets.

NOTE: Where comments or explanations are required, you must:

 Quote calculations, figures and/or trends
 Give a reason or an explanation in each case

REQUIRED:
HIKING BAGS
3.4 Comment on the control over direct material cost of hiking bags. Quote figures.
Give TWO reasons that may have contributed to the change in the unit cost. (4)
3.5 Explain whether the decision to increase the selling and distribution cost of hiking
bags was beneficial to the business or not. Quote figures. (3)
3.6 Kyla plans to increase the production of hiking bags by an additional 2 500 units
over the next financial year. Assuming no change to the current cost structure,
calculate the additional net profit that she could expect to earn in 2025. (5)
HIKING JACKETS
3.7 Comment on the fixed cost per unit of hiking jackets and explain the major cause
for the change in this unit cost. (4)
3.8 Identify the production cost of hiking jackets that should be of serious concern to
Kyla. Provide TWO valid solutions to this problem. (4)
INFORMATION:

HIKING BAGS HIKING JACKETS

2024 2023 2024 2023
Variable cost per unit R615,00 R442,00 R336,00 R285,00
Direct material cost per unit R320,00 R230,00 R116,00 R115,00
Direct labour cost per unit R135,00 R132,00 R175,00 R110,00
Selling & distribution cost
R160,00 R80,00 R45,00 R60,00
per unit

Fixed cost per unit R170,00 R175,00 R196,50 R130,00

Total fixed costs R714 000 R700 000 R786 000 R780 000
Factory overhead cost R510 000 R500 000 R532 000 R530 000
Administration cost R204 000 R200 000 R254 000 R250 000

Selling price per unit R780,00 R750,00 R600,00 R600,00

Units produced and sold 4 200 units 4 000 units 4 000 units 6 000 units
Break-even number of units 4 328 units 2 273 units 2 978 units 2 477 units
Net profit/loss (R21 120) R531 916 R269 808 R1 109 745
 The inflation rate is currently 6%.
 Wages and salaries increased by 4% in 2024.

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QUESTION 4: BUDGETING (40 marks; 35 minutes)

Zephyr Traders opened on 1 January 2024 and sells portable power systems (PPS) that
are used by the public to cope with load-shedding. The business is owned by Dan Grey.

Background information:
 Salespersons are paid a commission only. Office workers earn monthly salaries.
 At the time of preparing the budget, Dan was unaware that a competitor had opened
a business during April 2024 in close proximity to Zephyr Traders. He therefore had to
take important decisions to deal with this problem during May 2024.
REQUIRED:
4.1 Complete the Debtors' Collection Schedule for June 2024. (8)
4.2 Calculate the amounts indicated by (i) to (iii) in the extract from the Cash Budget. (10)
4.3 Calculate the % increase in salaries of office workers from 1 June 2024. (4)
Refer to Information E.
A new competitor moved into the area during April 2024. Dan did not take any actions
during April as he was not aware of the competitor.
4.4 Explain how the competitor affected the sales and cash flow of the business in
April 2024. Provide TWO different points, with figures. (4)
4.5 Explain whether Dan would be satisfied with the number of units sold in
May 2024 as a result of his decision to adjust the selling price of the product.
Provide TWO points, with figures. (4)
4.6 Dan is aware that not all salespersons would be satisfied with the decisions he
has taken regarding their earnings. Salesperson John was satisfied, whereas
Sally was not. Give ONE reason to support John's opinion and ONE reason to
support Sally's opinion. Quote figures. (4)
Refer to Information C.
4.7 Calculate the total loan amount, including interest. (2)
4.8 The owner is unsure about purchasing or renting the property. Explain ONE point
in favour of purchasing the property and ONE point against this proposal. (4)
INFORMATION:
A. Cash and credit sales:
 Cash sales comprise 55% of total sales. Mark-up is 60% on cost.
Refer to the credit sales figures in the ANSWER BOOK.
 Debtors pay according to the following trend:
o 25% in the month of sales and they receive 5% discount
o 45% in the month following the month of sales
o 24% two months after the month of sales
o 6% to be written off in the third month after the month of sales

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B. Purchases of stock and payment to creditors:

 Stock sold is replaced in the month of sales.
 70% of purchases are on credit.
 Creditors are paid in the month following the month of purchases.

C. Business property/Rent expense:

Dan made enquiries about taking out a 10-year mortgage loan to purchase the
property. The following terms would apply, after calculations were discussed with a
bank consultant:
 A deposit of 20% of the loan amount will have to be paid on 1 June 2024.
 A fixed monthly instalment of R13 800 (including interest) will then be payable
on the last day of each month, commencing on 30 June 2024, for the duration
of the loan.
D. Extract from the Cash Budget:
MAY 2024 JUNE 2024
RECEIPTS R R
Cash sales 1 064 800 (i)
Cash from debtors 734 382
PAYMENTS
Payments to creditors 770 000 (ii)
Salaries: Office workers 62 000 64 480
Salary: Manager 40 500 40 500
Deposit on purchase of property 220 000
Instalment on loan (including interest) 13 800
Hire of delivery vehicle (iii) 34 810
*NOTE: The vehicle hire expense will increase by 18% p.a. from 1 June 2024.

E. Budgeted and actual figures for April and May 2024:

APRIL 2024 MAY 2024
BUDGETED ACTUAL BUDGETED ACTUAL
Number of salespersons 12 12 12 8
Units to sell/sold 200 148 220 245
Cost price per unit R5 500 R5 500 R5 500 R5 500
Mark-up % 60% 60% 60% 35%
Selling price per unit R8 800 R8 800 R8 800 R7 425
Total sales R1 760 000 R1 302 400 R1 936 000 R1 819 125
Cash sales 968 000 390 720 1 064 800 509 355
Credit sales 792 000 911 680 871 200 1 309 770
Collection from debtors 660 924 495 690 734 380 734 380
Salary: Manager 32 400 32 400 40 500 34 020
Commission on sales 264 000 195 360 290 400 363 825
Advertising 52 800 40 000 58 080 54 575

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TOTAL: 150

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GRADE 12 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET

Gross profit x 100 Gross profit x 100

Sales 1 Cost of sales 1

Net profit before tax x 100 Net profit after tax x 100
Sales 1 Sales 1

Operating expenses x 100 Operating profit x 100

Sales 1 Sales 1

Total assets : Total liabilities Current assets : Current liabilities

(Current assets – Inventories) : Current liabilities Non-current liabilities : Shareholders' equity

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

Average trading stock x 365 Cost of sales .

Cost of sales 1 Average trading stock

(See Note 1 below)

Average debtors x 365 Average creditors x 365

Credit sales 1 Cost of sales 1
(See Note 2 below)
Net income after tax x 100
Net income after tax x 100 Number of issued shares 1
Average shareholders' equity 1
(See Note 3 below)
Net income before tax + Interest on loans x 100
Average shareholders' equity + Average non-current liabilities 1

Shareholders' equity x 100 Dividends for the year x 100

Number of issued shares 1 Number of issued shares 1

Interim dividends x 100 Final dividends x 100

Number of issued shares 1 Number of issued shares 1

Dividends per share x 100 Dividends for the year x 100

Earnings per share 1 Net income after tax 1

Total fixed costs .

Selling price per unit – Variable costs per unit

NOTE: 1. Trading stock at the end of a financial year may be used if required in a question.
2. Credit purchases may be used instead of cost of sales (figures will be the same if stock is constant).
3. If there is a change in the number of issued shares during a financial year, the weighted-average
number of shares is used in practice.

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