GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023

QUESTION AND ANSWER BOOKLET

ST BENEDICT’S COLLEGE

GRADE 12 ACCOUNTING
PRELIMINARY EXAMINATION PAPER 1
Examiner Mrs T Clifton Date: 17TH July 2023

Moderators Mrs Y Vorster (external) Time: 2 hours

QUESTION PAPER AND
Marks 200
ANSWER BOOKLET
Name

PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY:

1. The paper consists of a Question Paper and Answer Booklet of 15 pages, an Information Booklet
consisting of 9 pages and a ratio sheet of 1 page. Please check that your handouts are complete.
2. Read the questions carefully.
3. Answer the questions in the space provided.
4. It is in your own interest to write legibly and present your work neatly.
5. You may not use red or green ink. You may use a pencil, but please use a soft, dark pencil.
6. All calculations should be rounded off to two decimal places.
7. It is essential that all working details be shown to earn part marks.
8. The allocation of marks and suggested time to be taken for each question are as follows:
Total Time Marks
QUESTION
(marks) (minutes) Achieved
Question 1- Company financial statements 70 40

Question 2- Asset management 40 25

Question 3- Cash flow statements 40 25

Question 4- Manufacturing 50 30

TOTAL 200 120

FINAL MODERATED MARK

Teacher’s signature and comment: ________________________________________________________

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

QUESTION 1 COMPANY FINANCIAL STATEMENTS (70 marks, 40 minutes)

Refer to the information relating to Perky-Pet Limited.
1.1. Use the information supplied regarding Perky-Pet Limited to complete Statement of
Comprehensive Income as at 30 June 2023. (35)

Sales (7 164 000

Cost of sales (2 865 600

Gross profit DO NOT CALCULATE

Other operating income DO NOT CALCULATE

Rent income (132 600

Discount Received (15 600

Gross operating income DO NOT CALCULATE

Operating expenses DO NOT CALCULATE

Advertising (9 800
Depreciation 65 000
Directors Fees 250 000
Packaging material (12 795
Salaries and wages (145 700
Sundry Expenses (45 055
Telephone (18 105
UIF Contribution (1 457

Operating profit DO NOT CALCULATE

Interest income (3 000

Profit before interest expense DO NOT CALCULATE

Interest expense (5 600

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

Net profit before tax

Income tax

Net profit after tax 990 990

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

CALCULATION PAGE
Should you wish to use this space for calculations – please clearly label the details of the amount you
Are working out. All final amounts must be transferred correctly to the Statement of Comprehensive
Income and/or Note to the Financial Statements.
Rent income (adjustment 3) (4) Interest expense (adjustment 4) (3)

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

1.2. Complete the following notes as it would appear in the notes to the Financial Statements on
30 June 2023.
1.2.1. INVENTORIES

Trading Stock (225 300

DO NOT CALCULATE
(6)
1.2.2. TRADE AND OTHER RECEIVABLES
Net trade debtors

Trade debtors (96 900

Provision for bad debts (4 350

Debtors for Salaries (8 500

DO NOT CALCULATE
(13)
1.2.3. TRADE AND OTHER PAYABLES
Trade creditors (78 940
SARS: PAYE (6 480
UIF (2 914

DO NOT CALCULATE
(9)

70

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

QUESTION 2 ASSET MANAGEMENT (40 marks, 25 minutes)

Refer to the information relating to Boards Unlimited.

REMEMBER: WHITEBOARDS: WEIGHTED AVERAGE CHALKBOARDS: FIFO
ROUND OFF TO THE NEAREST RAND.

2.1. Calculate the value of Chalk Boards on hand on 30 June 2023. (3)

2.2 Calculate the value of the White Boards on hand on 30 June 2023. (8)

2.3 Calculate the gross profit achieved on the sale of the Chalk Boards for the year ended
30 June 2023. (5)

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

2.4 Calculate the profit mark-up achieved by Boards Unlimited on the sale of Chalk Boards for
the year ended 30 June 2023. (3)

2.5 On average the business adds a profit mark-up of 140% to the cost price of Chalk Boards. Supply
two reasons why the mark-up percentage calculated in 2.4 is different from the average mark-
up added. (2 x 1)

• ___________________________________________________________________
• ___________________________________________________________________

2.6 Bryson Mansoor, the owner of Boards Unlimited is concerned that a number of White Boards
have gone missing.
2.6.1 Are his concerns warranted? Show a calculation to prove/disprove that White Boards have gone
missing. (5)

2.6.2 Explain one control measure that Bryson could implement to ensure that stock is not stolen.
Note: You may not use security cameras as a control measure and your control measure must
be applicable to the nature of the business. (1)

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

2.7 Refer to information point 4.1 of the information booklet. Why do you think that the price of
both Chalk Boards and White Boards decreased on 1 December 2023? (1)

________________________________________________________________________
________________________________________________________________________

2.8 Determine the method of depreciation that is being applied to delivery vehicles. Show a
calculation to support your answer. (4)
Calculation:

Method of depreciation: _________________________________________________

2.9 Supply ONE suitable reason why you think that Delivery Van 1 was being traded in on Delivery
Van 3. (1)

______________________________________________________________________________
______________________________________________________________________________

2.10 Calculate the price at which Vehicle 1 was traded in on Vehicle 3.

Hint: Prepare the asset disposal account. (6)

40

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

QUESTION 3 CASH FLOW STATEMENTS 450 marks, 25 minutes)

Refer to the information relating to the accounting records of Magnificent Limited.

NOTE:
• Some figures have been filled in for you, these are correct.
• Any workings must be shown in the brackets provided.

REQUIRED:
3.1 Complete the section Changes in working capital as it would appear in the note
reconciliation of profit before taxation and cash generated from operations for the year
ended 28 February 2023. (Remember to underline either increase or decrease where
applicable.) (6)

Changes in working capital

266 250

Increase / decrease in inventories

Increase / decrease in trade and other receivables (debtors)

Increase / decrease in trade and other payables (creditors)

CALCULATION BLOCK:
Inventories Trade and other Receivables

Trade and other Payables

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

3.2 Prepare the Ordinary share capital account for the financial period 1 April 2022 to 31 March
2023. Only balance the account on 31 March 2023. (7)

ORDINARY SHARE CAPITAL

2022 2022
Sept 30 Apr
2023
Mar 31

2023
Apr

3.3 Fill in the missing details indicated by the letters A – E. Complete the Statement of cash flow
for the year ended 31 March 2023. (25)

STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 MARCH 2023

Cash flows from operating activities 625 000

Cash generated from operations 2 009 250

Taxation paid

Dividends paid (760 000)

Purchase of non-current assets

Proceeds from the sale of non-current assets 582 000

Proceeds from the sale of shares

Proceeds from long term borrowings

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year 2 141 500

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

CALCULATION BLOCKS:

3.4 The directors issued more shares and sold fixed assets in order to improve the cash flow.
A shareholder has criticised them for these decisions. Provide in each case a reason to
support the shareholder’s opinion and a reason (other than improving the cash flow) to
support the directors’ decision. (4/2=2)

Decision by directors Reason to support shareholder Reason to support the directors

Issued more shares

Sold fixed assets

40

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 GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

QUESTION 4 MANUFACTURING CONCERNS (50 marks, 30 minutes)

Refer to the information relating to Joy Manufacturers for the year ended 30 June 2023.

4.1 Complete the following Notes to the Production Cost Statement for the year ended 30 June
2023.

4.1.1 RAW MATERIAL COSTS (11)

Opening stock
Net Purchases

Carriage on purchases

Closing stock

472 950

4.1.2 DIRECT AND INDIRECT LABOUR COST (11)

DIRECT LABOUR COST INDIRECT LABOUR COST

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

4.1.3 FACTORY OVERHEAD COSTS (30/2=15)

Indirect materials

Indirect labour

Factory foreman salary

Depreciation

Repairs

Water and electricity

Rent

Insurance

708 039

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

4.1.4 Complete the Production Cost Statement for the year ended 30 June 2023.
Joy Manufacturers: Production Cost Statement for the year ended 30 June 2023 (4)

Direct costs / Prime costs

Direct materials cost 472 950

Direct labour cost

Factory overheads 708 039

Total manufacturing costs

Work-in-progress – opening balance 43 300

Work-in-progress – closing balance

Cost of production of finished goods 1 538 329

4.2 Calculate the unit cost of production of the toy cars manufactured for the current financial
year. (2)
(Round off to the nearest rand if necessary)

4.3 Determine the value of finished goods on hand on 30 June 2023. (4)

HINT: Opening stock of finished goods + cost of production of finished goods – closing stock of
finished goods = Cost of sales

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GRADE 12 ACCOUNTING PAPER 1 PRELIMINARY EXAMINATIONS 2023
QUESTION AND ANSWER BOOKLET

4.4 Staff productivity levels have dropped during 2023. Suggest TWO ways in which the business
can improve output levels (2)

4.5.1 Calculate the production break-even point and provide a short comment. (3)
(Round off to the nearest rand in your calculations)

4.5.2 Comment on whether the owner of Joy Manufaturers will be satisfied with the business
performance for the 2023 year, considering the calculated break-even point. (2)

50

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