ACCOUNTING

PAPER: 1

TERM: 1
AUTUMN CAMP MATERIAL
(QUESTION PAPER)

MARCH- APRIL 2024

COLLECTABLE MATERIAL

CO
GRADE 12

PAPER: 1
11
ACADEMIC YEAR 2024

This camp material consists of 28 pages only, and answer book.

MARCH 2015

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Accounting 2 NW/March 2024
Grade: 12 (Question paper)
TABLE OF CONTENT

NO CONTENT QUESTIONS: PAGE

1. INCORRECT NET PROFIT 1-2 3-4
2. Notes to the financial
statement: 1-4 5-8
• Ordinary share capital
• Retained income
• Trade and other receivables 5-6 9-10
• Trade and other payables
3. Statement of financial position 1 11-13
4. Cash flow statements 1-3 14-18
5. Analysis and interpretation of 1-11 19-28
financial statements

NOTES TO CONTENT:
 When calculating the correct net profit due to errors that occurred, the
information must be carefully read. You need to check if the transaction is
included in the calculation of the net profit or not.
 If the transaction was included, you need to establish how the error
affected the expense or income account.

 If the expense was overstated, the net profit must increase

 If the expense was understated, the net profit must decrease.
 If the income was overstated, the net profit must decrease.
 If the income was understated, the net profit must increase
 If the entry was omitted, it must be brought into account.

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Accounting 3 NW/March 2024
Grade: 12 (Question paper)

INCORRECT NET PROFIT

QUESTION 1 FINANCIAL STATEMENTS AND NOTES (14 marks; 10 minutes)
The information relates to AEPA Limited for the financial year ended 30 June 2023.
REQUIRED:
1.1. Calculate the correct NET PROFIT AFTER TAX for the financial year
ended 30 June 2023. (14)
INFORMATION:
A. The following items appeared in the Pre-Adjustment Trial Balance on
30 June 2023:
R
Consumable Stores on hand (packing material) 12 000
Trading stock 98 000
Creditors' control 23 700
Loan: BDO Bank 72 400
Rent income 58 250

B. The net profit before tax was incorrectly calculated as R324 000.
C. The following information was not taken into account by the bookkeeper:
(i) The directors fees of R22 000 and audit fees of R6 350 for June 2023
were not paid yet.
(ii) Stock to the value of R5 600 was destroyed in a fire. The insurance
company agreed to pay R4 800.
(iii) 80% of the packing material was used during the financial year.
(iv) Rent income:
• Rent received from a tenant for the period 1 July 2022 to 31 May 2023. This
has been recorded. This amount takes into account a reduction of R750 per
month from 1 March 2023. The year-end adjustment has not yet been made.

(v) According to the loan agreement an instalment of R20 000 and interest, will
be paid annually to BDO Bank. Interest on the loan should be capitalised.
The bookkeeper correctly recorded the amount paid to BDO Bank on 30 June
2022 as follows:
Debit: Loan: BDO Bank R37 600
Credit: Bank R37 600
(vi) Provide for income tax at 28% of the net profit.
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Accounting 4 NW/March 2024
Grade: 12 (Question paper)
QUESTION 2 COMPANY FINANCIAL STATEMENT (13 marks; 15 minutes)

LEEDS LIMITED

The following information relates to Leeds Limited. The financial year ended on 30
June 2023. The business uses the perpetual inventory system.

REQUIRED:

2.1. Refer to Information B.

Calculate the correct net profit after tax for the year ended 30 June 2023.
Indicate a + for increase and a – for decrease. (14)

INFORMATION:

A. List of balances/totals on 30 June 2023:

BALANCE SHEET ACCOUNTS SECTION 2023 2022

Fixed deposit 480 000
Trading stock 206 100
Debtors’ control 396 000
Provision for bad debts (1 July 2022) 13 400
SARS: Income Tax - Provisional payment 712 000
Accrued income 13 200
Creditors’ control 132 000
NOMINAL ACCOUNTS SECTION
Rent income 122 400
Insurance 48 500

B. Net profit before tax of R2 530 200 was determined BEFORE taking into
account the following information:
(i) Trading stock on 30 June 2023 was valued at R186 300.
(iii) Rent for July 2023 had been received in advance. Rent increased on
1 February 2023 with 10%.
(ii) Provision for bad debts must be adjusted to R10 700.
(iv) An annual insurance premium of R9 600 was paid for the period
1 March 2023 to 28 February 2024.
(v) The auditor discovered that the loss on disposal of a vehicle, R7 300, was
incorrectly shown as a profit.
(vi) Income tax amounts to R748 500 for the year.
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Accounting 5 NW/March 2024
Grade: 12 (Question paper)

NOTES TO THE FINANCIAL STATEMENT

QUESTION: 1 (16 marks; 10 minutes)
1.1 BOOTS & ALL LTD
You are provided with information relating to Boots & All Ltd for the
financial year ended 30 June 2022.
REQUIRED:
1.1.1. Prepare the following notes to the financial statements
• Ordinary share capital (8)
• Retained income (8)
INFORMATION:

A. Extract from Income Statement for the financial year ended

30 June 2022:
R
Net profit before income tax 1 330 000
Net profit after income tax 931 000

B. Extract from Balance Sheet on 30 June 2022:

2022 2021
R R
Fixed assets (carrying value) 4 326 000 1 489 000
Ordinary shareholders' equity 7 500 000 6 450 000
Ordinary share capital 5 950 000 5 200 000
Retained income 1 550 000 1 250 000
Shareholders for dividends 105 000 71 500
Inventory 670 000 580 000

C. Additional information:

(i) Ordinary share capital:

• 1 500 000 shares have been authorised.
• 650 000 shares were issued at the end of the previous
financial year, 30 June 2021.
• 100 000 ordinary shares were issued on 1 May 2022.
• 50 000 ordinary shares were repurchased from dissatisfied
shareholders. They were repurchased at R11,75 per
share; the average price was R8,50 per share.
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Accounting 6 NW/March 2024
Grade: 12 (Question paper)
QUESTION: 2 NOTES TO FINANCIAL STATEMENT (17 marks; 10 minutes)
2.1 USANDA LIMITED
You are provided with information relating to Usanda Ltd for the
financial year ended 29 February 2024.
REQUIRED:
2.1.1. Prepare the following notes to the financial statements
• Ordinary share capital (8)
• Retained income (9)

INFORMATION:
A. Extract: Statement of Comprehensive Income for the year
ended: 29 February 2024:

Net profit before tax 1 777 000

Income tax (30%) ?

B. Extract: Statement of Financial Position:

29 February 2021 28 February 2020
Shareholders' equity 9 891 400 11 985 000
Ordinary share capital 9 555 000 11 220 000
Retained income 336 400 765 000
Shareholders for dividends 340 000 247 0

C. Share capital:
NUMBER OF DETAILS OF
DATES
SHARES SHARES
1 March 2023 1 650 000 In issue
30 October 2023 50 000 Additional shares issued
28 February 2024 335 000 Shares repurchased at R9,50
each
29 February 2024 1 365 000 In issue

D. Dividends and earnings:

a. An interim dividend was paid on 31 August 2023.
b. A final dividend of 20 cents per share was declared on 29 February 2024.
c. Total dividends for the year amounted to R835 000.
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Accounting 7 NW/March 2024
Grade: 12 (Question paper)
QUESTION 3 (18 marks; 10 minutes)

NOTES TO THE FINANCIAL STATEMENTS

You are provided with information related to Ladysmith Limited, a public company,
for the financial year ended 30 June 2023.

REQUIRED:

3.1 Prepare Ordinary share capital on 30 June 2023 (9)

3.1 Prepare the Retained income Note on 30 June 2023: (9)
INFORMATION:

A. Shares and dividends:

• 1 July 2022: 800 000 shares were in issue

• 30 September 2022: 30 000 ordinary shares were repurchased from
a retired shareholder at R9,80.
• 31 December 2022: Interim dividend of 40 cents per share was paid.
• 1 January 2023: 100 000 new shares were issued at R13,12.
• 30 June 2023: Final dividends were declared to all shareholders
in the shares register.

B. Extract from the Statement of Comprehensive Income for the year

ended 30 June 2023:

R
Net profit before tax 1 400 000
Net profit after tax 980 000

C. Extract from the Statement of Financial Position on 30 June:

2023 2022
Ordinary shareholders’ equity ?
Ordinary share capital 7 395 000 6 320 000
Retained Income ? 811 800
Shareholders for dividends 321 900 250 000

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Accounting 8 NW/March 2024
Grade: 12 (Question paper)
QUESTION 4: NOTES TO THE FINANCIAL STATEMENT (06 marks; 5 minutes)

4.1 TUMBA LTD

The information relates to the financial year ended 30 April 2023.
REQUIRED:
4.1.1 Complete the Ordinary Share Capital note. (6)

INFORMATION:

A. Extract from the Statement of Comprehensive Income on 30 April

2023
Income tax 273 270
Net profit after tax ?
Note: The income tax rate is 30%.

B. Extract from the Statement of Financial Position on 30 April:

2023 2022
Shareholders’ equity 6 062 000 5 124 800
Ordinary share capital 5 852 000 4 704 000
Retained income 210 000 420 800
Shareholders for dividends ? 265 000

C. Share capital and dividends:

• The authorised share capital consisted of 2 100 000 shares.

• On 1 May 2022, 70% of the authorised shares were in issue.
• On 30 June 2022, 300 000 additional shares were issued.
• On 30 September 2022 an interim dividend was paid, R318 600.
• 230 000 shares were repurchased on 31 January 2023.

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Accounting 9 NW/March 2024
Grade: 12 (Question paper)
QUESTION 5: CALCULATION OF NET PROFIT AND STATEMENT OF FINANCIAL
POSITION (12 marks; 10 minutes)

5.1 LUX LTD

The information relates to the financial year ended on 30 June 2023.

REQUIRED:

5.1.1 Complete the following notes to the financial statement

• Trade and other receivables (6)
• Trade and other payables (6)
INFORMATION:
A. Extract from Pre-adjustment Trial Balance on 30 June:

2023 2022
(R) (R)
Debtors control 942 460
Creditors control 1 962 260
Provision for bad debts ? 25 300
SARS: Income tax (provisional payments) 914 600
Directors' fees 3 330 000
Insurance 128 400
Rent income 168 000

(i) Provision for bad debts should be adjusted to R28 500.

(ii) Insurance includes an amount of R40 800 paid for the period
1 January 2023 to 31 December 2023.
(iii) Rent is received for the period 1 July 2022 up to 30 September 2023.
This takes into account an increase of R800 per month from 1 April
2023.
(iv) A creditor with a debit balance of R11 000 must be transferred to the
debtors ledger.
(v) The company has four directors earning the same fee. One director
resigned on 30 September 2022 and received his fees up to this
date. Another director is still owed fees for July and August 2023.
B. After taking the above omissions into account, it was determined that
R65 500 was due to SARS.

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Accounting 10 NW/March 2024
Grade: 12 (Question paper)

QUESTION 6: NOTES TO THE FINANCIAL STATEMENT (13 marks; 10 minutes)

JIMO LIMITED

The information relates to the financial year ended 30 June 2021. The business
sells formal clothing for men and women.

REQUIRED:

6.1 Complete the following notes to the financial statements

• Trade and other receivables (6)
• Trade and other payables (7)

INFORMATION:
A. List of balances, before taking into account all adjustments below:

30 June 2021 30 June 2020

(R) (R)
SARS: Income tax (provisional tax) 1 200 000
Net trade debtors 3 668 810
Creditors' control 1 253 000
Directors' fees 2 015 000
Accrued income/Income receivable 8 000
Shareholders for dividends 1 170 000 821 700

B. Directors' fees:
• The company has two directors who were appointed in 2019. A third
director was appointed on 1 February 2023.
• The directors all earn the same monthly fee.
• Directors' fees paid during the financial year have been recorded, but one
director has already been paid for July and August 2023.
C. Audit fees include R123 600 which was paid in advance for the next financial
year.
D. Rent income:
Rent of R74 000 was received from a tenant for the period 1 July 2020 to
31 August 2021. This has been recorded. This amount takes into account a
reduction of R750 per month from 1 May 2021. The year-end adjustment has
not yet been made.
E. Debtors with credit balances totaling R12 000 must be transferred to the
Creditors' Ledger.
F. After taking into account the corrections above, it was determined that an
additional R85 250 is still owed to SARS in respect of income tax for the
year.
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Accounting 11 NW/March 2024
Grade: 12 (Question paper)

STATEMENT OF FINANCIAL POSITION

QUESTION 1: CONCEPTS AND COMPANY FINANCIAL STATEMENTS
(50 marks; 40 minutes)

1.1 CONCEPTS

Choose an explanation from COLUMN B that matches a concept in COLUMN

A. Write only the letter (A–D) next to the question numbers (1.1.1–1.1.4) in
the ANSWER BOOK.

COLUMN A COLUMN B
1.1.1 Shareholders A Ensures that the company comply with
the tax requirements
1.1.2 Limited liability B Make strategic and operational
decisions for the company
1.1.3 Directors C Shareholders private assets cannot be
claimed for paying company’s debts
1.1.4 Auditor D Entitled to a share in the profits of the
company
E Opinion expressed on the fair
presentation of the figures in the
financial statements
(4 x 1) (4)

1.2 TWENTY-FOUR LTD

The information relates to Twenty-Four Ltd. for the financial year ended on
29 February 2024.

REQUIRED:

Complete the following for the year ended 29 February 2024:

1.2.1 Notes to the Statement of Financial Position:

• Ordinary Share capital (7)
• Retained Income (8)
(11)
• Trade and other receivables

1.2.2 Statement of Financial Position (Balance Sheet).

(Show workings in brackets) (20)

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Accounting 12 NW/March 2024
Grade: 12 (Question paper)
INFORMATION:
A List of balances, before considering all adjustments below on
29 February:
2024 2023
Balance Sheet account section
Ordinary share capital 8 377 500 8 400 000
Retained Income 975 000
Mortgage loan: Shona bank 1 400 000
Fixed Assets (carrying value) ? 8 203 725
Fixed deposit: AME Bank ?
Trading stock ?
Debtors control 288 500
Provision for bad debts 24 900
Creditors control 151 800
Bank (favourable) 820 800
Petty Cash 10 850
Cash float 3 250
SARS (provisional tax) 289 750

Nominal account section

Rent income 229 500
Interest on fixed deposit 33 300

B Adjustments and additional information

(a) A debtor, K Kirk who owed R22 000 was retrenched from his job. 25%
of his debt must be written off as irrecoverable. The amount received
was recorded.
(b) Provision for bad debts must increase by R500.
(c) An invoice of R28 500 was not recorded in the Creditors control
account.
(d) Audit fees is still outstanding, R19 500.
(e) One of the tenants has attended a workshop in London and will be back
in March 2024. The rent for March has been received. Take note that
the rent increased with 10% on 1 November 2023.
(f) Interest on fixed deposit is not capitalised and was received for nine
months only. Provide for the outstanding interest.
(g) Fixed/Tangible Assets:
• Assets bought during the year amounted to R1 215 000.
• Old equipment was sold at carrying value of R572 000.
• Depreciation for the year amounted to R196 725.

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Accounting 13 NW/March 2024
Grade: 12 (Question paper)
(h) Share capital and dividends:
Authorised share capital: 1 800 000 ordinary shares
1 March 2023 2/ (two thirds) of the shares were in issue.
3
1 June 2023 180 000 shares were repurchased at R1,40
above the average share price.
31 August 2023 Interim dividends of R153 000 were paid.
1 November 2023 Additional shares were issued.
29 February 2024 Final dividends of 55 cents per share was
payable to all shareholders on the share
register.

(i) Loan: Shona bank

• Part of the loan balance will be paid in the next financial year. R?

(j) Net profit after tax amounted to R858 000.

• Income tax amounted to 25% of the net profit before tax.

(k) Current ratio for 2024 is 1,5:1.

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Accounting 14 NW/March 2024
Grade: 12 (Question paper)

CASH FLOW STATEMENTS

QUESTION 1: CASH FLOW STATEMENT (18 marks; 15 minutes)

The information relates to Brewer Ltd for the financial year ended 28 February
2021.

REQUIRED:

1.1 Complete the Cash Flow Statement for the year ended 28 February 2021.
Certain figures are provided in the ANSWER BOOK. (18)
INFORMATION:

A. Shares and dividends:

DATE DETAILS OF SHARES
1 March 2020 800 000 in issue
30 June 2020 100 000 new shares issued
1 January 2021 30 000 shares repurchased at R1,20 more than the
average share price
28 February 2021 ? shares in issue

• Interim dividend of R162 000 was paid on 30 September 2020.

• A final dividend of 22 cents per share was declared on 28 February 2021.
B. Extract from the Statement of Comprehensive Income
(Income Statement) for the year ended 28 February 2021:
Sales R7 293 000
Cost of sales 4 862 000
Operating expenses 1 458 600
Net profit before tax 1 350 000
Net profit after tax 985 500

C. Extract from the Statement of Financial Position (Balance Sheet) on:

28 Feb. 2021 29 Feb. 2020
R R
Petty cash and cash float ? 20 000
Ordinary shareholders' equity 8 038 100 6 450 000
Ordinary share capital 7 395 000 6 400 000
Retained income 643 100 50 000
Loan: Sharks Bank 1 650 000 2 200 000
SARS: Income tax 29 100 Dr 35 900 Cr
Shareholders for dividends 191 400 115 300
Bank overdraft 0 95 200

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Accounting 15 NW/March 2024
Grade: 12 (Question paper)
QUESTION 2: CASH FLOW STATEMENT AND FINANCIAL INDICATORS
(19 marks; 15 minutes)
2.1 TUMBA LTD
The information relates to the financial year ended 30 April 2023.
REQUIRED:
2.1.1 Calculate the following amounts for the Cash Flow Statement:
• Income tax paid (5)
• Dividends paid (3)
2.1.2 Complete the following sections of the Cash Flow Statement.
• Cash effects from investing activities (7)
• Net change in cash and cash equivalents (4)
INFORMATION:
A. Extract from the Statement of Comprehensive Income on 30 April
2023
Sales 3 188 150
Depreciation 413 000
Interest expense 78 000
Net profit after tax 637 630
Note: The income tax rate is 30%.

B. Extract from the Statement of Financial Position on 30 April:

2023 2022
Fixed assets (carrying value) 4 094 900 3 830 000
Financial assets 190 000
Inventories 720 800 520 000
Trade and other receivables 240 000 356 000
Cash and cash equivalents 56 600 6 500
Shareholders’ equity 6 062 000 5 124 800
Ordinary share capital 5 852 000 4 704 000
Retained income 210 000 420 800
Trade and other payables 90 440
SARS: Income tax Dr21 270 Cr 36 600
Shareholders for dividends ? 265 000
Bank overdraft 0 38 400
Current liabilities 360 700 430 440

C. Fixed assets:
• Extensions to land and buildings were completed during the year at a
cost of R830 400.
• Equipment was sold during the year at carrying value.

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Accounting 16 NW/March 2024
Grade: 12 (Question paper)

D. Share capital and dividends:

• The authorised share capital consisted of 2 100 000 shares.
• On 1 May 2022, 70% of the authorised shares were in issue.
• On 30 June 2022, 300 000 additional shares were issued.
• On 30 September 2022 an interim dividend was paid, R318 600.
• 230 000 shares were repurchased on 31 January 2023.

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Accounting 17 NW/March 2024
Grade: 12 (Question paper)
QUESTION 3: CASH FLOW STATEMENTS (37 marks; 25 minutes)

The following information relates to Frankfurt Ltd that distributes perfumes to

retailers. The financial year ended on 31 August 2023.

REQUIRED:

3.1 Calculate the following concerning the cash flow statement:

3.1.1 The cash generated from operations. (15)
3.1.2 The cash flow from investing activities. (10)
3.1.3 The cash flow from financing activities. (7)
3.1.4 The net change in cash and cash equivalents. (5)

INFORMATION:

A. Extract from the Income Statement on 31 August 2023.

Depreciation R950 000

Interest expense 144 150
Net profit before tax 1 230 000
Income tax ?
Net profit after tax 861 000

B. Extract from the Balance Sheet on 31 August:

Note 2023 2022

Fixed assests at carrying value R3 616 400 R2 300 000
Financial assets 300 000 712 500
Current assets 1 231 050 1 116 650
Inventories 903 900 1 044 700
Trade and other receivables See (iv) 257 150 70 950
Cash and cash equivalents 70 000 1 000
Ordinary share capital 1 932 000 2 000 000
Retained income 1 413 800 1 156 000
Loan 1 622 000 300 000
Bank overdraft 62 000
Trade and other payables See (v) 1 138 000 ?

C. Additional information:

(i) Ordinary share capital:

1 000 000 Shares in issue at beginning of year R2 000 000
200 000 Additional shares issued on 30/11/2022 520 000
280 000 Shares repurchased on 31 May 2023 (588 000)
920 000 Issued shares on 31 August 2023 1 932 000

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Accounting 18 NW/March 2024
Grade: 12 (Question paper)
(ii) Extract from Retained income:
Repurchase of shares (R266 000)

(iii) Fixed assets

• Fixed assets were bought during the year for R?

• Fixed assets were sold during the year at book value, R225 000.

(iv) Trade and other receivables:

2023 2022
Net Trade debtors R208 150 R70 000
Prepaid expenses 0 950
SARS (Income tax) 49 000

(v) Trade and other payables:

2023 2022
Trade creditors R944 800 R860 700
Income received in advance 0 28 300
SARS (Income tax) 163 700
Shareholders for dividends 193 200 120 000

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Accounting 19 NW/March 2024
Grade: 12 (Question paper)

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT

QUESTION: 1
RATIOS:
Required:
1.1 Name six (6) Liquidity ratios and give formula for each ratio (12)
1.2 Name five (5) profitability ratios and write formula for each ratio (10)
1.3 Name risk and gearing ratios and its formulas (5)

QUESTION: 2
2.1. Define the following concepts:

2.1.1. Liquidity ratios (2)

2.1.2. Solvency ratios (2)
2.1.3. Profitability ratios (2)

QUESTION 3
3.1 Choose a term from the list below that answers the specific following
questions. Write only the term next to the question numbers (3.1.1 to 3.1.3) in
the ANSWER BOOK.

Return on capital employed; return on equity; solvency; liquidity; profitability

3.1.1 Is the business able to pay off all its debts?

3.1.2 Can the business pay off short-term debts in the next financial year?
3.1.3 Will shareholders be satisfied with the benefit that they receive for
investing in the company?
(3 x 1) (3)
QUESTION 4: FINANCIAL INFORMATION CONCEPTS
4.1 Complete the following sentences using the word (s) in the list below. Write
only the word next to the question number (4.1.1 – 4.1.5) in the ANSWER
BOOK.

liquid; profitable; solvent; return; risk/gearing

4.1.1 A company with total assets exceeding total liabilities is …

4.1.2 A company that relies heavily on loans will have high …
4.1.3 A company that controls its income and expenses properly will be …
4.1.4 The percentage net income on equity indicates the … earned by
shareholders
4.1.5 A company that is able to settle its immediate debts is …
(1 x 5) (5)

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Accounting 20 NW/March 2024
Grade: 12 (Question paper)
QUESTION 5: FINANCIAL INDICATORS (11 marks; 5 minutes)

The information relates to Brewer Ltd for the financial year ended 28 February
2021.

REQUIRED:

5.1 Calculate the following financial indicators on 28 February 2021:

• % operating expenses on sales (3)

• % operating profit on sales (3)

• % Return on average shareholders' equity (5)

B. Extract from the Statement of Comprehensive Income

(Income Statement) for the year ended 28 February 2021:
Sales R7 293 000
Cost of sales 4 862 000
Operating expenses 1 458 600
Operating profit 984 555
Net profit before tax 1 350 000
Net profit after tax 985 500

C. Extract from the Statement of Financial Position (Balance Sheet) on:

28 Feb. 2021 29 Feb. 2020
R R
Petty cash and cash float ? 20 000
Ordinary shareholders' equity 8 038 100 6 450 000
Ordinary share capital 7 395 000 6 400 000
Retained income 643 100 50 000
Loan: Sharks Bank 1 650 000 2 200 000
SARS: Income tax 29 100 Dr 35 900 Cr
Shareholders for dividends 191 400 115 300
Bank overdraft 0 95 200

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Accounting 21 NW/March 2024
Grade: 12 (Question paper)
QUESTION 6: FINANCIAL INDICATORS (19 marks; 15 minutes)
USANDA LIMITED
The financial year ended on 29 February 2024.
REQUIRED:
6.1 Calculate the following for the financial year ending 29 February 2024.
(i) % operating profit on sales (3)
(ii) Current ratios. (3)
(iii) The acid-test ratio. (4)
(iv) The debt-equity ratio. (3)
(v) The return on average shareholders' equity. (6)

INFORMATION:
A. Extract: Statement of Comprehensive Income for the year
ended 29 February 2024:
Sales R17 800 000
Operating profit 2 262 100
Interest on loan (capitalised) 270 000
Net profit before tax 1 777 000
Net profit after tax 1 243 900

B. Extract: Statement of Financial Position:

29 February 2024 28 February 2023
Current assets 659 500 1 067 500
Inventories 276 500 373 200
Trade and other receivables 262 300 539 600
Cash and cash equivalents 120 700 154 700
Shareholders' equity 9 891 400 11 985 000
Ordinary share capital 9 555 000 11 220 000
Retained income 336 400 765 000
Loan: VBC Bank (see E) ? 2 080 000
Current liabilities 611 900 592 500
Trade and other payables 252 100 185 700
Bank overdraft 0 90 000
SARS: Income tax 19 800 69 300
Shareholders for dividends 340 000 247 500
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Accounting 22 NW/March 2024
Grade: 12 (Question paper)
QUESTION 7: FINANCIAL INDICATORS (16 marks; 10 minutes)
7.1 PHILA LTD
You are provided with information relating to Phila Ltd for the financial
year ended 31 March 2023. The company is registered with an
authorised share capital of 2 000 000 ordinary shares.

REQUIRED:

7.1.1
Calculate the following financial indicators on 31 March 2023.
• % Gross profit on sales (3)
• % Markup achieved (3)
• Debt-equity ratio (3)
• Net asset value per share (3)
• % Return on average shareholders' equity (4)
INFORMATION:

A Information from the Income Statement for the financial year ended
31 March:

2023 2022
Sales 8 300 000 6 650 000
Cost of sales 5 187 500 3 800 000
Gross Profit 3 112 500 2 850 000

Net profit before taxation 1 240 000 931 000

Net profit after taxation 892 800 651 700
Interest on loan 211 000

B Extract from the Balance Sheet on 31 March:

2023 2022
Shareholders' equity 9 209 000 6 458 200
Current assets (including stock) 794 500 681 300
Trading stock 430 000 198 000
Current liabilities 688 200 538 500
Cash & cash equivalents 0 45 300
Bank overdraft 34 200 2 000
Loan from Zipho Bank 1 300 000 2 000 000
Shareholders for dividends 378 000 300 000

Shares:
• 1 280 000 ordinary shares were in issue on March 2023
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Accounting 23 NW/March 2024
Grade: 12 (Question paper)
QUESTION 8: FINANCIAL INDICATORS (20 marks; 15 minutes)

The following information relates to Frankfurt Ltd that distributes perfumes to

retailers. The financial year ended on 31 August 2023.

REQUIRED:

8.1 Calculate the following financial indicators for 2023:

• Acid test ratio (4)

• Debt-equity ratio (4)

• Net asset value per share (4)

• Percentage return on total capital employed. (8)

INFORMATION:

A. Extract from the Income Statement on 31 August 2023.

Interest expense 144 150

Net profit before tax 1 230 000
Income tax ?
Net profit after tax 861 000

B. Extract from the Balance Sheet on 31 August:

Note 2023 2022

Fixed assests at carrying value R3 616 400 R2 300 000
Financial assets 300 000 712 500
Current assets 1 231 050 1 116 650
Inventories 903 900 1 044 700
Trade and other receivables 257 150 70 950
Cash and cash equivalents 70 000 1 000
Ordinary share capital 1 932 000 2 000 000
Retained income 1 413 800 1 156 000
Loan 1 622 000 300 000
Bank overdraft 62 000
Trade and other payables 1 138 000 ?

Additional information:
Shares:
• 920 000 Ordinary shares were in issue on August 2023.
20

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Accounting 24 NW/March 2024
Grade: 12 (Question paper)
QUESTION 9: FINANCIAL INDICATORS (16 marks; 10 minutes)
NORTH-WEST SUPPLIERS LIMITED
You are provided with information relating to North-west Suppliers Ltd for
the financial year ending 28 February 2023.
REQUIRED:
9.1 Calculate the following for the financial year ending 28 February 2023.
(i) Current ratios. (3)
(ii) The acid-test ratio. (4)
(iii) The debt-equity ratio. (3)
(iv) The return on average shareholders' equity. (6)
INFORMATION:
A. Extract from Statement of Comprehensive Income for the year ended 28
February 2023:
R
Interest on loan 175 000
Net profit before income tax 2 400 000
Income tax 672 000

B. Extract from Statement of Financial Position on 28 February:

2023 2022
Fixed assets (carrying value) 4 178 300 3 532 000
Inventory 1 350 000 1 281 500
Trade and other receivables 1 580 000 1 530 000
Cash and cash equivalents 168 000 28 000
Shareholders' equity 4 478 300 3 409 000
Ordinary share capital 3 600 000 2 500 000
Retained income 878 300 909 000
Mortgage loan: Puma Bank 1 420 000 1 300 000
Trade and other payables 1 598 000 1 786 000
Bank Overdraft 0 56 000

16

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Accounting 25 NW/March 2024
Grade: 12 (Question paper)
QUESTION 10 INTERPRETATION OF FINANCIAL STATEMENTS
(10 marks; 5 minutes)

INTERPRETATION OF FINANCIAL STATEMENTS

10.1 CHATSWORTH LTD

You are provided with information relating to Chatsworth Ltd, a public

company, for the financial year ended 31 August 2023.

REQUIRED:

NOTE: Provide figures, trends, financial indicators or calculations in EACH

case to support your comments and explanations.

10.1.1 Profitability:

Quote and explain TWO financial indicators to show that the company
is managing its expenses more efficiently. (4)

10.1.2 Liquidity:

The directors are satisfied with the liquidity of the company. Quote
THREE financial indicators to support this statement. (6)

INFORMATION:

A. Financial Indicators calculated on 31 August:

2023 2022
% operating expenses on sales 13.8% 19.5%
% Operating profit on sales 24.5% 22.8%
% Net profit on sales 20.9% 21.8%
Current ratio 2.4 : 1 1.9 : 1
Acid-test ratio 1:1 0.8 : 1
Stock turnover rate 6 times 3 times
Total assets to total liabilities 3.0 : 1 5.0 : 1
10

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Accounting 26 NW/March 2024
Grade: 12 (Question paper)
QUESTION 11 INTERPRETATION OF FINANCIAL STATEMENTS
(10 marks; 5 minutes)

INTERPRETATION OF FINANCIAL STATEMENTS

11.1 PAKISO LTD

You are provided with information relating to Pakiso Ltd, a public company, for the
financial year ended 29 February 2024.

REQUIRED:

NOTE: Provide figures, trends, financial indicators, or calculations in EACH

case to support your comments and explanations.

11.1.1 Profitability:

Quote and explain TWO financial indicators to show that the company
is managing its expenses more efficiently or not. (4)

11.1.2 Liquidity:

The directors are not satisfied with the liquidity position of the company.
Quote THREE financial indicators to support this statement. (6)

INFORMATION:

A. Financial Indicators calculated on 29 February:

2024 2023
% operating expenses on sales 22% 18%
% Operating profit on sales 15% 20%
% Net profit on sales 16.8% 19,7%
Current ratio 1,7: 1 2,5: 1
Acid-test ratio 0,6: 1 1,2: 1
Stock turnover rate 2 times 5 times
Total assets to total liabilities 4.0: 1 3.0: 1
10

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Accounting 27 NW/March 2024
Grade: 12 (Question paper)
QUESTION 12: INTERPRETATION OF FINANCIAL INFORMATION
(45 marks; 35 minutes)
You are provided with information relating to Qumbu Ltd for the year ended 28
February 2023.
REQUIRED:
NOTE: Provide financial indicators with figures and trends to support your comments
or explanations (where applicable).
12.1 Profitability:
The opinion is that Qumbu Ltd is not managing their expenses more efficiently
and therefore, more profitable. Quote TWO financial indicators (with figures)
to either support or dispute this opinion. (5)
12.2 Liquidity
Explain whether or not the company is managing their working capital efficiently.
Quote TWO financial indicators. (5)
12.3 % shareholding
Denise Taylor, the CEO, owned 540 000 shares in the company on 1 March
2022. She continued to buy additional shares on the JSE at various times
during the year. On 28 February 2023, Denise became the majority shareholder
as she then owned 51% of the shares in issue.
• Calculate the total number of additional shares that Denise purchased. (4)
• Give ONE possible reason why Denise was determined to become the
majority shareholder. (2)
12.4. Decisions by directors, risk, and gearing
12.4.1. The Cash Flow Statement revealed decisions taken by the directors.
• Identify TWO major decisions taken by the directors in 2023 that
were different to those from the previous year.
• Give ONE reason for these decisions. (6)
12.4.2. Explain the impact of these decisions on the degree of financial risk
over the two years. Quote ONE financial indicator. (3)
12.4.3. Explain how these decisions affected the gearing of the company.
Quote ONE financial indicator. (4)
12.5. Dividends and earnings
12.5.1. Certain shareholders expressed concern about the change in the
dividend payout policy. Explain TWO points to support their opinion. (4)
12.5.2. Explain whether shareholders would be satisfied with the trend in the
% return and earnings of the company, as well as the dividends they
earned. Quote TWO financial indicators. (6)

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Accounting 28 NW/March 2024
Grade: 12 (Question paper)
12.6. Comments at the annual general meeting
Some shareholders are angry about the trends of the following two issues
relating to the performance of the company:
• Cash and cash equivalents at the end of the year
• The market price of the shares on the JSE
In EACH case, provide evidence for the shareholders' concerns over these
trends, and explain why they would be concerned about the future prospects
for the company. (6)
INFORMATION:
A. Financial indicators and additional information on 28 February:
2023 2022
% operating expenses on sales 14,1% 12,0%
% operating profit on sales 14,5% 16,5%
% net profit on sales 10,4% 10,9%
Debt-equity ratio 0,1 : 1 0,4 : 1
Current ratio 0,9 : 1 1,3 : 1
Acid-test ratio 0,3 : 1 0,6 : 1
Average debtors' collection period 42,4 days 30,8 days
Earnings per share 60 cents 74 cents
Dividends per share 64 cents 50 cents
Dividend payout rate 106,7% 67,6%
% return on average equity 5,7% 7,2%
% return on average capital employed 9,0% 11,4%
Net asset value per share 1 007 cents 980 cents

Market price of shares on JSE 850 cents 1 020 cents

Interest rate on loans 13% 13%
Interest rate on fixed deposits 7% 7%

B. Share capital and % shareholding:

• On 1 March 2022, the company issued an additional 300 000 shares.
• On 28 February 2023, there were 1 500 000 shares in issue.
C. Extract from the Cash Flow Statement on 28 February:
2023 2022
R R
Cash flow from operating activities (1 890 000) (652 000)
Cash flow from investing activities
Cash flow from financing activities 1 950 000 3 250 000
Shares 3 750 000 (250 000)
Loans (1 800 000) 3 500 000

Net change in cash and cash equivalents (836 000) 2 200 000
Cash and cash equivalents at beginning 1 914 000 (286 000)
Cash and cash equivalents at end 1 078 000 1 914 000
45

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 Accounting 29 NW/March 2024
Grade: 12 (Question paper)

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

Average debtors x 365 Average creditors x 365

Credit sales 1 Cost of sales 1

Net income after tax x 100

Net income after tax x 100 Number of issued shares 1
Average shareholders' equity 1
(*See note 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:
* In this case, 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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