Accounting 7 DoE/Feb. March 2009 NSC QUESTION 2

Transcription

1 Accounting 7 DoE/Feb. March 2009 INVENTORY VALUATION QUESTION 2 (35 marks; 20 minutes) You are provided with information in respect of Magic Soccer Balls Shop for the year ended 28 February The business is owned by Peter Pule. The business uses the perpetual inventory system and the FIFO method of valuing stock. 2.1 Explain the meaning of the term FIFO. (2) 2.2 The selling price of soccer balls was kept constant throughout the year. Calculate the selling price per soccer ball. (3) 2.3 The owner, Peter Pule, is aware that some soccer balls were stolen from the storeroom in April No entry has been made. Calculate the number of balls that are missing. What double entry would you make in the books to record this? Also provide the amount. (5) (3) 2.4 Value the stock on hand at the year-end according to the FIFO method. (7) 2.5 Calculate following: Cost of sales Gross profit for the year 2.6 Peter is not sure when to place his next order of soccer balls. How long can he expect the closing stock to last? Provide figures or a calculation to support your answer. What advice will you offer Peter in respect of the final stock? Provide TWO points. (5) (3) (3) (4) Accounting records relating to the soccer balls: Details Date Number of Unit price Total balls Opening stock 1 March R110 R R Purchases 20 May R150 R October R120 R December R160 R Closing stock 28 February ?? Sales 1 March 2008 to 28 February ? R

2 Accounting 6 DoE/November 2009(1) QUESTION 2 INVENTORY VALUATION AND CONTROL (40 marks; 24 minutes) You are provided with information relating to Banyana Traders, owned by David Hambeck, for the financial year ended 28 February The business is situated in Johannesburg. David buys and sells soccer balls and jerseys. The business uses the periodic inventory system. The soccer balls are bought from South African suppliers, and the soccer jerseys of different clubs and countries are imported from overseas. David employs salespersons to control each item of stock: James controls and sells the soccer balls Cyril controls and sells the soccer jerseys David has decided on the following accounting policies for valuing inventory: Soccer balls Weighted-average method Soccer jerseys First-in-first-out method (FIFO) Although this business has done well, David is considering closing it down and investing his capital in fixed property. State TWO points that he should consider before making a final decision. David suspects that a number of soccer balls have been shoplifted. Calculate the number of soccer balls stolen. Use the relevant information to calculate the closing stock value of: Soccer balls (using the weighted-average method) Soccer jerseys (using the FIFO method) Show your workings to earn part-marks. Calculate the following for soccer jerseys (you may prepare a Trading Account to calculate these figures): Cost of sales Mark-up % on cost Stock turnover rate If David decides to continue with this business, what advice would you offer him? State TWO points and quote financial indicators or specific information from the question to support your answer. (4) (5) (6) (5) (4) (5) (5) (6)

3 Accounting 7 DoE/November 2009(1) 1. Inventories: The stocks were valued as follows at the beginning and end of the financial year: Date No. of units Soccer balls Per unit Total value No. of units Soccer jerseys Per unit Total value 01/03/ R120 R R320 R /02/09 900?? 250?? 2. Purchases: During the financial year ended 28 February 2009, the following stock items were purchased: Date of purchases No. of units Soccer balls Per unit Total value No. of units Soccer jerseys Per unit Total value 31/03/ R120 R R200 R /06/ R150 R R225 R /09/ R175 R R255 R /01/ R180 R R300 R Totals R R Carriage on purchases: During the year, the business paid a total of R to transport soccer balls to the shop. The price of the soccer jerseys includes carriage. 4. Sales: Items Details Total Soccer balls units at R320 each R Soccer jerseys units at R400 each R Financial indicators: Items Mark-up % on cost Stock turnover rate Soccer balls 48,5% 3,9 times p.a. Soccer jerseys?? times p.a. [40]

4 Accounting 16 DoE/November 2009 QUESTION 5 INVENTORY VALUATION, CONTROL AND VAT (40 marks; 25 minutes) 5.1 INVENTORY VALUATION Laser Stores sells television sets to the public. The financial year ends on 28 February They are unsure which method to use in valuing their stock. The cost price of the product has changed significantly during the current year. The owner, Larry Laser, has decided to keep selling the same model of TV set (Mabona TV sets, Model XC456), despite the fact that other shops are selling newer models Calculate the value of closing stock using the FIFO (first-in-first-out) method. (6) Calculate the value of closing stock using the weighted average method. (7) Which method of stock valuation would you advise the owner to use? Explain a reason for your answer. (3) Calculate the gross profit on TV sets for the year based on the stock valuation method you advised in QUESTION (4) The following information appeared in the records of Laser Stores for the year ended 28 February The business used a fixed selling price of R per TV set. Information on stock of Mabona TV sets Model XC456 Number of TV sets Value per unit Total value TV sets on hand on 1 March R R TV sets bought during the year 750 R May R R September R R February R8 000 R Subtotal 800 R TV sets sold during the year 440 R R TV sets on hand on 28 February ??

5 Accounting 17 DoE/November CONTROL OF INVENTORY Apart from TV sets, Laser Stores also sells other products. You are provided with information taken from their stock records on 28 February The owner, Larry Laser, is uncertain if he should be satisfied with the control of all of these items. Comment on the stock control of each item, quoting figures to support your comment. In each case, offer Larry practical advice for the future. (9) Item Mabona TV sets Khuluma Cellphones Lalela Radios Number of units sold during the year Number of units on hand per stock records at year-end Number of units per physical count at yearend Selling price per unit Period of stock on hand R16 000? R days R days 5.3 VALUE-ADDED TAX The following information was taken from the books of Laser Stores for February All goods bought and sold by Laser Stores are subject to 14% VAT. Calculate the amount of VAT payable to/by SARS on 28 February 2009 and indicate whether the amount is payable to or receivable from SARS. Show ALL workings. Ledger accounts for VAT are not required, but you may use this to arrive at your answer. (11) Excluding VAT Including VAT Stock purchased by cheque R ? Equipment purchased by cheque R R Sales of goods for cash and on credit? R Goods returned by customers R R Discount allowed to debtors on settlement of their accounts R4 000? Drawings of stock by the owner R R Bad debts? R

6 Accounting 8 DoE/Feb. March 2010 QUESTION 2 INVENTORY VALUATION (45 marks; 25 minutes) You are provided with information relating to Golf Universe, a business which sells golf clubs and golf balls. Paul Fitt owns the business. The periodic inventory system is used. 2.1 Refer to Information 1. Briefly explain why it is appropriate for Paul to use the FIFO method for golf clubs, and the weighted average method for golf balls. (4) 2.2 Calculate the value of the closing stock for the two stock items. Show ALL workings using both the number of units and the value of the units. Golf clubs (use FIFO method) Golf balls (use weighted average method) (15) 2.3 For golf clubs, calculate the following: Cost of sales Gross profit VAT charged to customers on golf clubs sold Mark-up % NOTE: You may draft a Trading account for golf clubs to assist in identifying these figures. (5) (3) (3) (3) 2.4 Paul suspects that he is not controlling his stock well. He suspects that the golf clubs he is selling, are not very popular with his customers. He suspects that golf balls are being stolen. Quote information from the question which will confirm his suspicions. Provide an appropriate calculation in each case to support your answer. (6) 2.5 Paul has asked you to become a partner in this business. Explain THREE strategies that you would want to implement in this business were you to become a partner (your strategies must be based on specific information from the question). (6)

7 Accounting 9 DoE/Feb. March Inventory is valued according to the following methods: Golf clubs: First-in-first-out method (FIFO) Golf balls: Weighted average method 2. Inventory valuations at the beginning and end of the accounting period: Golf clubs Per unit Golf balls Per unit No. of units Total value No. of units Total value 01/03/ R800 R R9,60 R /02/ ?? 550?? 3. Carriage, exchange rates and import duties: 3.1 Golf clubs: These clubs are made in South Africa. Transport costs are R50 per golf club. A total of R was paid for transporting the 300 golf clubs purchased. Transport cost is included in the opening stock figure of R Golf balls: These are imported from the USA. Prices are quoted in US dollars ($). The exchange rate was R7,50 = $1,00 throughout the year. Import duties are levied at 20% of the rand value of the purchases. Transport costs are paid by the manufacturer. Import duties cost is included in the opening stock figure of R9, Purchases during the year: Golf clubs Golf balls No. of units Purchase price per unit Total value in rands No. of units Purchase price per unit in US dollars Total value in US dollars (Excluding transport) (Excluding import duties) 25/04/ R750 R $1,00 $ /07/ R800 R $1,20 $ /10/ R900 R $1,20 $ /01/ R900 R $1,60 $4 800 Total 300 R $ Sales during the year: (exclusive of VAT) Golf clubs: 185 units at R1 200 each = R Golf balls: units at R19 each = R

8 Accounting 4 DBE/November 2010 QUESTION 1: ANALYSIS OF TRANSACTIONS, INVENTORY VALUATION AND VAT (40 marks; 20 minutes) This question consists of THREE independent questions. 1.1 ANALYSIS OF TRANSACTIONS You are provided with information relating to Bhato Traders. Show the effect of the following transactions on the accounting equation. The bank balance is favourable at all times. The first transaction has been completed as an example. Where there is no effect on A, O or L you must reflect an '0'. TRANSACTIONS: An amount owing to SARS for income tax at the end of the previous year was paid. An interim dividend was paid. A premium was charged and received on new shares issued. A final dividend was declared. Income tax for the year was brought into account (the amount exceeds the provisional tax paid). (16)

9 Accounting 5 DBE/November INVENTORY (STOCK) VALUATION The following information was extracted from the accounting records of Bags 4U. Bags 4U buys and sells one type of ladies' handbag. The business uses the periodic method of inventory and the weighted average method of valuing inventory. Study the information below and provide the missing figures as indicated by (A) to (D). Show workings to earn part-marks. Transactions for the month: INFORMATION Handbags on hand on 1 February 2010 NUMBER OF HANDBAGS ON HAND VALUE PER UNIT CARRIAGE ON PURCHASES TOTAL VALUE 250 R125 (A) Handbags bought during the 1 010? month 7 February R120 Nil R February R120 Nil R February R105 R4 000 (B) Handbags returned to 10 R1 050 suppliers during the month 26 February R105 R1 050 Handbags sold during the month Handbags on hand on 28 February 2010 (C) R225? 275 (D)? (15)

10 Accounting 6 DBE/November VAT Mango Supermarket is a registered VAT vendor. VAT is calculated at 14%. All goods are sold at 50% on cost Calculate the VAT payable to SARS or receivable from SARS. State whether the amount is payable or receivable. Calculate the VAT on net purchases of trading stock for February Calculate the amount of VAT that would be reflected on the invoices that were issued to the debtors during February (3) (3) (3) The following Ledger Accounts were extracted from the General Ledger of Mango Supermarket. GENERAL LEDGER OF MANGO SUPERMARKET BALANCE SHEET ACCOUNTS SECTION VAT CONTROL 2010 Feb. 28 Input VAT GJ Feb. 28 Output VAT GJ TRADING STOCK 2010 Feb. 1 Balance b/d Feb. 28 Creditors' control CAJ Creditors' control CJ Cost of sales DJ Cost of sales DAJ Cost of sales CRJ DEBTORS' CONTROL 2010 Feb. 1 Balance b/d Feb. 28 Journal Credits (Bad debts) GJ Sundry accounts DJ

11 Accounting 18 DBE/Feb. Mar QUESTION 6: INVENTORY VALUATION AND INTERNAL CONTROL (40 marks; 25 minutes) You are provided with information relating to Energy World for the year ended 28 February The business is owned by Frik Fitt. They sell energy drinks, energy bars and caps to retailers. Frik employs Dirk to manage the energy drinks, Barry to manage the energy bars and Cathy to manage the caps. 6.1 Energy Drinks Refer to the information relating to the energy drinks and calculate the following: Value of the closing stock using the weighted-average method Cost of sales and gross profit. You may draft a Trading Account to calculate these figures. Mark-up percentage Average stock turnover rate (6) (8) (3) (5) Manager: Dirk Product: Energy drinks Units Rand Amount Sales R21,20 R Opening stock 320 R9,00 R2 880 Purchases R April R10,50 R October R12,42 R January R13,30 R Units written off 20 R10,50 R210 Closing stock 2 400??

12 Accounting 19 DBE/Feb. Mar Problem-solving You are provided with the information below relating to all three products for the year ended 28 February Frik is concerned that his business could have been operating a lot more efficiently. He approaches you for advice. Identify a problem in respect of the manner in which Dirk, Barry and Cathy have been managing their products. Quote figures or financial indicators to support your answer. Give Frik ONE suggestion in respect of each product in order to address the problem identified in order to improve the overall financial results. Manager Dirk Barry Cathy Product Energy drinks Energy bars Caps Working days per year 240 days 240 days 240 days Days worked by manager 240 days 330 days 180 days Orders received units units units Units Amount Units Amount Units Amount Sales R R R Opening stock 320 R R R4 500 Purchases R R R Closing stock 2 400? 200 R R 0 Units written off 20 R210?? 0 R 0 Gross profit? R R Mark-up %? 25,7% 40,0% Turnover rate of stock? 97 times 23 times Period of stock on hand 177 days 4 days 16 days (18) 40 TOTAL: 300

13 Accounting 18 DBE/November 2011 QUESTION 6: INVENTORY VALUATION (30 marks; 20 minutes) 6.1 INVENTORY VALUATION Speedy Traders sells one type of bicycle to major retail stores around South Africa. They make use of the FIFO method for stock valuation and use the periodic inventory system. The business is owned by Steve Martin What do the letters FIFO stand for? Calculate the value per bicycle on hand on 1 July Calculate the value of the closing stock on 30 June 2011 according to the FIFO method. Calculate the gross profit on 30 June (2) (2) (4) (6) The owner and the accountant disagree on the method of stock valuation. Steve, the owner, wants to continue using the FIFO method, because he says it is easier to calculate. Bongi, the accountant, wants to use the weighted-average method, because she says the profit will be lower, and therefore the income tax will be lower. As internal auditor, what would you say to Steve and Bongi? State TWO points. (4) The information below appeared in the records of Speedy Traders for the year ended 30 June The business used a fixed selling price of R6 750 per bicycle. INFORMATION ON STOCK NUMBER OF BICYCLES VALUE PER BICYCLE TOTAL VALUE Bicycles on hand on 1 July ? R Bicycles bought during the year 630 R September R3 800 R January R4 500 R May R4 200 R Bicycles returned from January 5 R4 500 R purchases Bicycles sold during the year 450 R6 750 R Bicycles on hand on 30 June ??

14 Accounting 19 DBE/November PROBLEM-SOLVING Quick Bikes sells one brand of scooters. The owner, Doctor Zulu, has three branches operating in Riverside, Valley View and Mountain Rise. The three branches are managed by Robby, Vusi and Melanie, respectively. Doctor Zulu has obtained the annual figures from the three branches for the financial period ending 28 February Identify ONE problem in relation to each branch, quoting figures to support the problem. In each case, offer Doctor Zulu advice on how to solve the problem. (12) RIVERSIDE (ROBBY) VALLEY VIEW (VUSI) MOUNTAIN RISE (MELANIE) Number of scooters available for sale Number of scooters sold during the year Physical count on 28 February Nil Cost price per scooter R7 500 R7 500 R7 500 Selling price per scooter R R R Advertising per year R R R Salary of manager R per month R per month R per month 30 TOTAL: 300

15 Accounting 4 DBE/Feb. Mar QUESTION 1: VAT AND INVENTORY VALUATION (40 marks; 25 minutes) 1.1 VAT Complete the following statements by writing down the missing words or figures. (For QUESTIONS and choose from the words given in brackets.) The letters 'VAT' stand for In South Africa, VAT is levied at %. VAT collected by a business on the sale of goods and services is regarded as (VAT input/vat output). In the ledger, a (debit/credit) balance on the (VAT Input/ VAT Output/VAT Control) Account reflects the final amount that must be paid to SARS. An item of stock is purchased for R26 200, excluding VAT. The amount of VAT on this item is R An item of stock is sold for R39 900, including VAT. The amount of VAT on this item is R (2) (2) (2) (4) (2) (2) 1.2 INVENTORY VALUATION You are provided with information relating to Mzansi Traders owned by Thami Mzansi. This business sells one type of cellular phone and their financial year ends on 31 December. The business uses the FIFO method to value their stock and they use the periodic inventory system Calculate the value of the closing inventory according to the FIFO method on 31 December Calculate the following for the year ended 31 December 2011: Cost of sales Gross profit You may prepare a Trading Account to assist you in these calculations. Use the figures calculated above to calculate the mark-up % on cost achieved. Refer to the mark-up % calculated above. Comment on whether this mark-up % has been beneficial to Mzansi Traders in Note that in the previous financial year the gross profit was R and the mark-up % was 75%. (6) (9) (5) (6)

16 Accounting 5 DBE/Feb. Mar Inventories of cellular phones: The stocks were as follows at the beginning and end of the financial year: Date No. of units Per unit Total value 1 January R530 R December ?? 2. Purchases of cellular phones: During the financial year ended 31 December 2011, the following stock items were purchased: Date 2011 No. of units Cost price per unit Total purchases Carriage per unit Total carriage 30 April 600 R550 R R30 R June 900 R600 R R30 R Sept. 500 R530 R R30 R Nov. 200 R620 R R30 R6 000 Totals R R Returns of cellular phones: Mzansi Traders were not happy with the price of the purchases on 30 June Therefore they returned 100 cellular phones to the supplier. The supplier credited them with the cost price of each item, excluding the carriage. 4. Sales of cellular phones: units at R900 each = R

17 Accounting 4 DBE/November 2012 QUESTION 1: CONCEPTS, INVENTORY AND VAT (35 marks; 20 minutes) 1.1 CONCEPTS Indicate whether the following statements are TRUE or FALSE: The FIFO method of stock valuation is based on the assumption that stock acquired last is the first merchandise to be sold. Under the perpetual stock system carriage on goods bought is debited to the Trading Stock Account. Under the periodic stock system, when goods are sold, the cost of sales is recorded at the same time. All businesses in South Africa must charge value-added tax on all goods that they sell and all services that they provide. When the owner of a clothing business takes clothing for personal use at cost price, VAT is levied on these goods. (10) 1.2 INVENTORY VALUATION You are provided with information relating to Quality Building Suppliers for April They buy boxes of floor tiles and sell them to retailers around Hazyview. They use the weighted-average method for stock valuation and the periodic inventory system. Refer to the table below Calculate the total value of the opening stock (A). (3) Calculate the value of the tiles received on 25 April 2012 (B). (4) Calculate the value of the closing stock using the weightedaverage method. (6) INFORMATION BOXES OF TILES ON HAND VALUE PER UNIT CARRIAGE ON PURCHASES TOTAL VALUE Opening stock (1 April 2012) 600 R85,00 (A) Boxes of tiles purchased during the month 3 160? 10 April R90,00 R4 500 R April R95,00 R5 700 R April R120,00 R5 760 (B) Boxes of damaged tiles returned to supplier (these tiles were originally delivered on 25 April) 100?? Sales for the month R160,00 R Closing stock (30 April 2012) 1 150??

18 Accounting 5 DBE/November VALUE-ADDED TAX You are provided with information relating to Amy's Clothing Store. All goods are subject to 14% VAT. The business is owned by Amy Andrews Calculate the amount owed to SARS for VAT. (9) Amy has not yet submitted the VAT return. John Smith is the internal auditor. He has a CA qualification. He has noticed that an invoice for purchases from KZN Wholesalers amounting to R has been signed by Amy and recorded by the bookkeeper. On investigation he discovers that KZN Wholesalers does not exist. What should John Smith do about this? Explain. (3) VAT EXCLUSIVE VAT VAT INCLUSIVE 1. Invoices received from R R R suppliers 2. Invoices issued to customers R ? R Credit notes issued to R60 000?? customers 4. Credit notes received from R R5 600 R suppliers 5. Goods taken by Amy for?? R personal use 6. Bad debts written off R R2 100 R

19 Accounting 14 DBE/Feb. Mar QUESTION 5: INVENTORY VALUATION, INTERNAL CONTROL AND ETHICS (35 marks; 20 minutes) You are provided with information relating to Highveld Traders for the financial year ended 28 February The business is owned by Anele and managed by Chris, who is responsible for running the shop. The business buys and sells cricket bats and cricket balls. 5.1 Calculate the value of the closing stock for the following stock items. Show all workings, using both the number of units and the value of the units Cricket bats (use the FIFO method) Cricket balls (use the weighted-average method) (5) (7) 5.2 For cricket bats, calculate the following: Cost of sales Gross profit (6) (3) 5.3 Anele is concerned that a number of cricket bats have gone missing Calculate the number of cricket bats that appear to be missing. (3) Explain TWO control measures she could put in place to avoid this from happening in future. (4) 5.4 Anele is concerned about the way in which Chris has managed the cricket balls. Anele has found that Chris had changed the supplier of cricket balls in November without informing her. Provide evidence from the information provided to support Anele's concern. State TWO points and quote figures to support your answer. (4) 5.5 Anele has since discovered that the new supplier of cricket balls is a family member of Chris. What advice would you offer to Anele in this regard? (3)

20 Accounting 15 DBE/Feb. Mar Inventories: The physical stock counts revealed the following stock on hand at the beginning and at the end of the financial year: Date Cricket bats Cricket balls No. of units Total value No. of units Per unit (including carriage) Per unit (no carriage) Total value 01/03/ R450 R R60 R /02/ ?? 220?? 2. Purchases: During the financial year ended 28 February 2013 the following stock items were purchased. Refer below to returns and carriage: Date Cricket bats Cricket balls No. of units Per unit Total value No. of units Per unit Total value 30/05/ R500 R R60 R /08/ R550 R R65 R /11/ R600 R R85 R /01/ R625 R R95 R TOTALS 535 R R Returns during the year: Returns of faulty cricket balls No. of units Per unit Total value From November purchases 40 R85 R3 400 From January purchases 20 R95 R R Carriage on purchases: The total amount of carriage on purchases paid: Cricket bats R30 per bat on all purchases (not included in the purchase price in table above) Cricket balls no carriage payable 5. Sales during the year: Item Units Per unit Total value Cricket bats 455 R875 R Cricket balls 880?? 35

21 Accounting 21 DBE/November 2013 QUESTION 6: FIXED ASSETS, INVENTORY VALUATION AND INTERNAL CONTROL (55 marks; 35 minutes) 6.1 FIXED ASSETS You are provided with details of the fixed assets of Ulwazi Ltd. The financial year ends on 31 March Calculate the missing figures indicated by A, B and C in the Fixed Assets Note below. (9) Prepare the Asset Disposal Account for the computer sold on 31 January (11) You are the internal auditor. State TWO concerns that you would voice in respect of the fixed assets with the board of directors. Explain in EACH case why you are concerned. (4) 1. Fixed Assets Note: Land and buildings Equipment Vehicles Carrying value (1 April 2012) Cost Accumulated depreciation ( - ) ( ) Movements: Additions (cost) Disposals (carrying value) A Depreciation B Carrying value (31 March 2013) Cost Accumulated depreciation ( - ) C 2. Unused land was sold for cash at cost to solve cash-flow problems. This property was bought by Pedoma (Pty) Ltd. The majority shareholder in this company is Betty Benson, the CEO's wife. Information 3 on next page.

22 Accounting 22 DBE/November A computer (equipment) was sold for R800 cash to the CEO, Ben Benson, on 31 January FIXED ASSET REGISTER Item: IT3 Laptop Cost: R Date purchased: 1 October 2010 Rate of depreciation: 25% p.a. on cost E22189 DEPRECIATION ACCUMULATED CARRYING DEPRECIATION VALUE 31 March 2011 R2 250 R2 250 R March 2012 R4 500 R6 750 R January 2013??? 4. A new vehicle costing R was purchased on 30 June Depreciation is written off on Vehicles at 20% p.a. on the diminishing-balance method. 6.2 INVENTORY VALUATION AND INTERNAL CONTROL You are provided with information relating to Fast Save Traders owned by Mohammed Khan. The business sells school shirts. Their financial year ends on 31 July The business uses the FIFO (first in first out) method to value stock. The periodic inventory system is used Calculate the value of closing stock according to the FIFO method on 31 July (7) Calculate: Mark-up percentage (%) achieved on cost Stock holding period (use average stock in your calculation) (4) (4) The business aims at a mark-up of 30% on cost. As the internal auditor, what would you investigate? Explain. State TWO points. (4) The stock holding period for 2012 was 30 days. Should Mohammed be satisfied with the stock holding period for 2013? Explain. (3)

23 Accounting 23 DBE/November Sales and cost of sales for the year: TOTAL Sales (3 600 shirts at R140 each) R Cost of sales R Inventories of shirts: NUMBER OF UNITS PRICE PER UNIT TOTAL 1 August R80 R July ?? 3. Purchases and returns: NUMBER OF UNITS PRICE PER UNIT TOTAL Purchases: 12 October R110 R December R130 R March R100 R June R120 R R Returns: 7 March 2013 (60) R100 (R6 000) 24 June 2013 (150) R120 (R18 000) NET TOTAL R See next page.

24 Accounting 24 DBE/November INTERNAL CONTROL Sizwe Sibiya owns three printing shops, each managed by a different person. Each shop has one high-capacity printer which is designed to print copies per month. They charge R1,20 per copy. Identify ONE problem in relation to each shop, quoting figures in identifying each problem. In EACH case, advise Sizwe on how to solve the problem. INFORMATION FOR OCTOBER 2013: SHOP 1 SHOP 2 SHOP 3 Year printer purchased Name of manager Thandeka Dludlu Sipho Cost price of printer R R R Accumulated depreciation R R R Number of copies printed and sold Number of spoilt copies Cash from customers deposited R R R Ink and other consumables used R R R4 400 Repairs and maintenance R4 000 R1 400 R200 Other monthly operating expenses R R R (9) 55 TOTAL: 300

25 Accounting 18 DBE/2014 Grade 12 Exemplar QUESTION 6: INCOME STATEMENT, FIXED ASSETS AND STOCK (60 marks; 35 minutes) 6.1 KLOOF COMPUTERS (PTY) LTD You are provided with information relating to Kloof Computers (Pty) Ltd for the year ended 30 June Refer to Adjustments and Additional Information 5. Calculate the profit/loss on the disposal of the office computers sold on 31 March (6) Refer to Adjustments and Additional Information 6. Calculate the value of stock on hand of the: Hypa laptops, according to the specific identification method ABX printers, according to the FIFO method Silvo printing paper, according to the weighted-average method (3) (5) (5) Prepare the Income Statement for the year ended 30 June (32) (a) Items extracted from the Pre-adjustment Trial Balance on 30 June 2013: Balance Sheet accounts section Debit Credit Land and buildings Equipment Accumulated depreciation on equipment Trading stock Loan from Highway Lenders (13% p.a.) SARS (provisional tax) Debtors' control Provision for bad debts Nominal accounts section Sales Cost of sales Staff costs (salaries, wages and commission) Directors' fees Commission income Interest on loan Sundry expenses (including packing materials) Asset disposal 7 000

26 Accounting 19 DBE/2014 Grade 12 Exemplar (b) Adjustments and additional information: 1. Commission income of R2 350 is owed to the business. 2. Packing materials of R1 700 are on hand at the end of the year. Packing materials are included in Sundry expenses. 3. One of the two directors has been paid his fees for 6 months. The fees were increased by 10% half-way through the financial year. Provide for fees owing. Both directors earn the same annual fees. 4. Interest at 13% p.a. is owed on the loan. This interest is not capitalised. The loan was taken out several years ago. A payment of R was made on 31 December This has been properly recorded. 5. Equipment comprises: Cost on 30 June 2013 Accumulated depreciation on 1 July 2012 General equipment Depreciation rate 20% on diminishingbalance method Office computers ⅓% on cost R R NOTE: One of the office computers was sold on 31 March The selling price was credited to the Asset Disposal account but no other entry has been made. The cost price of this computer was R and the accumulated depreciation at the beginning of the year was R Depreciation is to be written off at the rates reflected above. 6. The business uses the perpetual inventory system. Stock records show: Item Hypa laptops ABX printers Silvo printing paper Valuation method Specific identification: R each Stock on hand on 30 June 2013 Value on 30 June computers? FIFO 46 printers? Weighted average 600 reams?

27 Accounting 20 DBE/2014 Grade 12 Exemplar NOTE: Two of the Hypa laptops included in the stock figures above were donated to Bonlo Primary School and Bonlo High School. No entry has been made for these donations. The following information relates to trading stock of printers and paper: ABX printers Printing paper Quantity Price Total Quantity Price Total Opening stock 20 R700 R R33 R PURCHASES 204 R R Aug R730 R R40 R Jan R750 R R30 R May R810 R R46 R SUBTOTAL 224 R R Sales 178 R1 500 R R65 R Closing stock 46? 600? 7. The income tax assessment for the year reflected that the business owed SARS an amount of R on 30 June PROBLEM-SOLVING To try and increase the sales of laptops, the directors of Kloof Computers (Pty) Ltd decided to employ three newly qualified salespersons on a trial period for one month. These salespersons would not be restricted to working at the shop premises. They were employed to visit potential customers who might be interested in laptops and printers. The salespersons would each be paid the following: A fixed basic monthly salary of R % commission on sales made by them A travel allowance of R2,00 per kilometre travelled in their private cars The business normally makes a gross profit of R6 000 per laptop (cost price R10 500, selling price R16 500). The salespersons are allowed to offer a maximum trade discount of R500 per laptop to help them secure a sale if necessary. At the end of the one-month trial period, you are provided with the figures on the next page.

28 Accounting 21 DBE/2014 Grade 12 Exemplar Explain ONE problem relating to each salesperson. Provide figures to support your explanations. What advice would you offer the directors in respect of the plan to employ these salespersons? (6) (3) Name of salesperson: GUGU MANNY JIM Number of laptops drawn from stock at the beginning of the month Number of laptops sold for cash Number of laptops returned to stock at the end of the month Discounts allowed to customers R0 R8 000 R5 000 Cash from sales deposited by each salesperson into the bank account R R R Gross profit earned before discounts and other expenses R R R Basic salary R7 000 R7 000 R7 000 Commission paid to each salesperson R R R Travel allowance claimed (R2,00 per km) R3 000 R1 000 R GRAND TOTAL: 300