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Support Pack | Grade 11

CAPS

Accounting
Exemplar examination:
November (Paper 1)

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Grade 11 NOVEMBER Time: 2 hours
PAPER 1 EXAMINATION Marks: 150

QUESTION TOPIC MARKS MINUTES

1 Financial statements of a partnership – 68 54 minutes

Statement of Comprehensive Income (Income
Statement)

2 Analysis of statements 28 22 minutes

3 Fixed assets 17 14 minutes

4 Statement of Financial Position (Balance Sheet) 37 30 minutes

150

QUESTION 1 [68 marks; 54 minutes]

PARTNERSHIP: FINANCIAL STATEMENTS
1.1 CONCEPTS
Give ONE word/term for each of the following descriptions by choosing a word/
term from the list below. Write only the word/term next to the question number
(1.1.1-1.1.4) in the ANSWER BOOK. (4)

current asset; non-current asset; current liability; non-current liability; materiality concept;
matching concept; income; expense

1.1.1 Profit on the sale of an asset is a/an ………………

1.1.2 The portion of the loan that will have to be repaid within a year is a/an
…………..
1.1.3 Consumable stores on hand is a/an……………………..
1.1.4 The GAAP principle applied when showing interest on bank overdraft as a
separate item than bank charges in the Statement of Comprehensive Income
(Income Statement) is called the ………………………..

1.2 FINANCIAL STATEMENTS

You are provided with information relating to Rawsonville Hardware. This business
has two partners, Tharine du Toit and Mercia Smith. The financial year ends on 28
February and they use the perpetual inventory system.

REQUIRED
1.2.1 The account for Trading Stock in the General Ledger of Rawsonville
Hardware.(9)
1.2.2 Prepare the Statement of Comprehensive Income (Income Statement)
for the year ended 28 February 2023. (40)
1.2.3 Prepare the following notes to the Statement of Financial Position
(Balance Sheet) on 28 February 2023:
1.2.3.1 Trade and other receivables (7)
1.2.3.2 Trade and other payables (8)

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INFORMATION
RAWSONVILLE HARDWARE
PRE-ADJUSTMENT TRIAL BALANCE AS AT 28 FEBRUARY 2023
Debit Credit
Balance Sheet account section
Capital: Du Toit 280 000
Capital: Smith 250 000
Current account: Du Toit 8 610
Current account: Smith 1080
Drawings: Du Toit 141 000
Drawings: Smith 138 000
Fixed deposit: XY Bank ?
Vehicles 200 000
Equipment 56 000
Accumulated depreciation on vehicles 75 000
Accumulated depreciation on equipment 23 100
Trading stock 352 800
Debtors control 35 600
Provision for bad debts 1 086
Bank 21 996
Cash float 1 200
Creditors control 45 170
Nominal accounts section
Sales 1 797 600
Cost of sales 1 027 200
Debtors allowances 9 860
Insurance 10 560
Discount allowed 1 990
Rent expense 59 700
Advertisements 10 800
Stationery 3 490
Interest on fixed deposit ?
Salaries and wages 324 000
UIF contribution 3 240
Bad debts 5 670
Bad debts recovered 1 340
Water and electricity 17 724
Telephone 12 336
Discount received 2 340
2 475 496 2 475 496

ADJUSTMENTS AND ADDITIONAL INFORMATION

A Rent expense is paid one month in advance. The rent increased with R400 on 1
January 2023.
B On 1 January 2023, an amount of R720 was paid for the placement of an
advertisement for the first term of the year (3 months).
C One of the partners, T du Toit, took trading stock with a cost price of R1 300 for
personal use. No entry was made of this.
D On 27 February 2023 a debtor, N Pretorius, returned goods with a selling price
of R1 575. The business uses a mark-up of 75% on the cost price of goods. No
entry was made of this.

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E No entries have been made with regard to stock stolen on 3 February 2023.
The insurance company has informed Rawsonville Hardware that they have
transferred R9 600 into the business’s bank account in respect of the insurance
claim. Rawsonville Hardware bears 20% of the stock loss.
F On 28 February 2023 a physical stocktaking was done. It showed the following
on hand:
Trading stock R339 840
Stationery R480
G The following statement was received from XY bank with regard to the fixed
deposit:
Balance at the beginning of the financial year R50 000
Interest capitalised ??
Balance at the end of the year R53 250

H An employee has not been paid his salary for February 2023. The salary details
are as follows:
Gross salary R6 000
PAYE R1 080
UIF R60
Medical Aid R760
The business contributes 1% of the gross salary towards the UIF.
I Several debtors had long overdue accounts. The partners decided to write off
accounts totalling R3 425.
J The provision for bad debts must be adjusted to 3% of outstanding debts.
K The following accounts were still payable on 28 February 2023:
Water and electricity R1098
Telephone R662
L Depreciation should be taken into account as follows:
• On vehicles, R30 000
• On equipment, R2 940

QUESTION 2 [28 marks; 22 minutes]

ANALYSIS AND INTERPRETATION OF FINANCIAL
STATEMENTS
You are provided with information obtained from the financial statements of BG
Traders. The business is owned by partners G Bestbier and H Griessel.

REQUIRED
2.1 Calculate the following financial indicators for 2023:
2.1.1 Current ratio (3)
2.1.2 Debt/Equity ratio (3)
2.1.3 Percentage return earned by Griessel on her average equity. (4)
2.2 Should the partners be satisfied with the control over operating expenses?
Briefly explain your answer by quoting percentages. (3)
2.3 Comment on the liquidity position of the business on 28 February 2023.
Quote ratio’s, percentages or figures to support your answer. (6)
2.4 Bestbier feels that Griessel’s drawings are unreasonable. Quote figures to
support this opinion. How does this affect the business? (4)

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2.5 The business urgently needs a delivery vehicle, which is expected to cost
R300 000. In your opinion, how should the business finance the cost of the
vehicle? Give a reason for your answer. (5)
INFORMATION
Extract from the Statement of Comprehensive Income (Income Statement) for the
year ended 28 February 2023 with comparative figures:
2023 2022
R R
Sales 1 118 250 946 200
Cost of sales 639 000 570 000

Extract from the Appropriation Statement for the year ended 28 February 2023:
• Net profit for the year, R228 000
• Total amount earned by Griessel, R154 500
• Total amount earned by Bestbier, R73 500

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

28 February 2023, with comparative figures:
2023 2022
R R
Fixed assets (carrying value) 572 685 506 280
Investments (9% p.a.) 210 000 45 000
Current assets 170 340 181 575
TOTAL ASSETS 953 025 732 855

Owners’ equity 710 565 489 225

Capital: Griessel 412 500 300 000
Capital: Bestbier 300 000 187 500
Current account: Griessel (dr) 37 035 (cr) 3 525
Current account: Bestbier (cr) 35 100 (cr) 1 800
Non-current liabilities (13% p.a.) 142 260 171 000
Current liabilities 100 200 72 630
TOTAL EQUITY AND LIABILITIES 953 025 732 855

Financial indicators calculated on 28 February 2023, with comparative figures:

2023 2022
Gross profit on cost of sales 75,0% 65,0%
Operating expenses on sales 21,0% 23,2%
Operating profit on sales 22.8% 19,5%
Current ratio ? 2,5 : 1
Acid-test ratio 0,6 : 1 0,8 : 1
Stock-turnover rate 6 times 4,5 times
Debtor collection period 30 days 45 days
Creditors’ payment period 60 days 60 days
Debt/Equity ratio ? 0,35 : 1
Total assets to total liabilities 3,9 : 1 3,0 : 1
% return on average equity 38,0% 33,2%
% return earned by Griessel ? 34,4%
% return earned by Bestbier 28,2% 33,0%

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QUESTION 3 [17 marks; 14 minutes]
FIXED ASSETS
You are provided with details of the fixed assets of Brandt & Co. The financial year
ends 30 September.

REQUIRED
3.1 Prepare the Asset Disposal Account for the computer sold on 31 July 2023. (8)
3.2 Calculate the missing figures indicated by A, B and C in the Fixed Assets
note below. (9)
INFORMATION
1.
NOTE FOR FIXED ASSETS Vehicles Equipment
Carrying value on 1 October 2022 82 800 34 600
Cost price 180 000 56 000
Accumulated depreciation (97 200) (21 400)
Movements
Additions at cost price 240 000 -
Disposals at carrying value - A
Depreciation (39 420) B
Carrying value on 30 September 2023 283 380
Cost price 420 000 47 000
Accumulated depreciation (136 620) C

2. A computer (equipment) was sold for R1 000 cash on 31 July 2023.

FIXED ASSETS REGISTER

Item: ASUS S300 Laptop
Cost: R9 000
Date purchased: 1 April 2021
Depreciation: 20% per annum on cost
Depreciation Accumulated Carrying
depreciation value
30 September 2021 900 900 8 100
30 September 2022 1 800 2 700 6 300
31 July 2023 ? ? ?

QUESTION 4 [37 marks; 30 minutes]

PARTNERSHIP: STATEMENT OF FINANCIAL POSITION
(BALANCE SHEET)
You are provided with information from the records of HarGro Traders. The
financial year-end is 28 February 2018.

REQUIRED
4.1 Prepare the following notes to the Statement of Financial Position (Balance Sheet):
Current accounts (a total column is not required) (14)
4.2 Prepare the Statement of Financial Position (Balance Sheet) on 28 February
2018. Where notes are not required, show ALL workings in brackets. (23)

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INFORMATION
The following amounts were extracted from the records:
28 Feb 2018 28 Feb 2017
Capital: N Hardisty 700 000 620 000
Capital: M Grové 700 000 750 000
Current account: N Hardisty ? 5 415 (dr)
Current account: M Grové ? 8 740 (cr)
Fixed assets (carrying value) 1 309 600
Fixed deposit: AB Bank 90 000
Loan: XY Bank ?
Inventory 156 400
Debtors control 36 900
Provision for bad debts 1 845
Creditors control 72 630
Bank 135 485
Petty cash 500
Income received in advance 2 800
Accrued expenses 6 320
Prepaid expenses 3 700

ADDITIONAL INFORMATION
A N Hardisty increased her capital with R80 000 on 31 August 2017.
M Grové decreased her capital with R50 000 on 31 August 2017.
B The partnership agreement stipulates the following:
• N Hardisty earns a salary of R240 000 per annum and M Grové earns 15%
more than Hardisty.
• The partners earn interest on capital of 12% p.a. Note the change in capital
during the year (see information A).
• Remaining profits are shared between Hardisty and Grové in the ratio 3:2
respectively. The remaining profit earned by Grové after all adjustments and
after the internal audit was calculated to be R32 600.
C N Hardisty withdrew 95% of her earnings for the 2018 financial year.
M Grové managed her withdrawals from the business in such a way, as to still
have a positive balance in her current account of R20 000 on 28 February 2018.
D There are two fixed deposits at AB Bank. One of these fixed deposits of R40 000
matures on 30 June 2018.
E Information from the loan statement from XY Bank for the financial year ended
28 February 2018:

Balance of the loan on 1 March 2017 250 000

Interest capitalised 28 500
Repayments made during the year 62 500
Balance of the loan on 28 February 2018 ?

During the next 12 months, the capital amount of the mortgage loan will
decrease by R30 000.