Grade 12 Accounting 0 Free State

Question Paper
QUESTION 1: ASSET DISPOSAL AND INTERNAL CONTROL

You are provided with the partially completed ledger accounts of Taylor Traders.
REQUIRED:

1.1 Answer the following questions:

1.1.1 In which section of the ledger will “Asset disposal” be found? (2)
1.1.2 Calculate or name the symbols numbered A - D. (6)
1.1.3 Depreciation on vehicles is calculated on the cost. Calculate
the percentage at which depreciation is written off each year. (4)
1.1.4 On which date was the vehicle that was sold, originally (4)
bought?
1.1.5 Refer to the Asset disposal account. How was the asset (2)
sold?
1.1.6 Calculate depreciation on the unsold vehicles on 29 February
2016, the end of the financial year. (Use the percentage as
calculated in 2.1.3) (5)
1.1.7 Calculate the amount for depreciation as it would appear in
the Income statement on 29 February 2016. (5)
1.1.8 Calculate the profit/loss made on the sale of the vehicle. (4)
1.2 On the evening of 29 February 2016, the new vehicle is stolen. The
business is properly insured.
1.2.1 Calculate the book value on the new vehicle that was stolen,
as on 29 February 2016. (4)
1.2.2 Which two measures can the business apply to improve their
internal control? (4)

GENERAL LEDGER OF TAYLOR TRADERS

VEHICLES
2015 2015
1 Balance b/d 250 000 1 Asset disposal [C] 96 000
Mar Sep
2016
Dec 1 [A] CJ 120 000 28 Balance c/d [D]
Feb
[B]
2016
1 Balance b/d
Mar

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 Grade 12 Accounting 1 Free State
Question Paper

ACCUMULATED DEPRECIATION ON VEHICLES

2015 2015
1 Asset disposal GJ 33 600 1 Balance b/d 75 000
Sep Mar
2016
29 Balance c/d Sep 1 Depreciation GJ 4 800
Feb
2016
29 Depreciation GJ ?
Feb

2016
1 Balance b/d
Mar

ASSET DISPOSAL
2015 2015
1 Vehicles GJ ? 1 Bank GJ 58 000
Sep Sep

Accumulated
depreciation on GJ ?
vehicles

QUESTION 2: ASSET DISPOSAL AND NOTE FOR FIXED ASSET

You are provided with information relating to Kgosi Traders on 29
February 2016, the end of their accounting period.
REQUIRED
2.1 Draw the Asset Disposal Account in the General Ledger. Close off the
account on 29 February 2016. (11)
2.2 Prepare the Fixed/Tangible Assets Note. Show calculations. (20)
2.3 The Land and Buildings were revalued on 1 March 2015 and the market
value was R700 000, the financial records are reflecting R400 000.
Which GAAP Principle is applicable? (2)
Balances on 1 March 2015
Cost Accumulated Carrying
depreciation value
Land and buildings 400 000 ( 0) 400 000
Vehicles 300 000 (76 000) 224 000
Equipment 80 000 (20 000) 60 000
INFORMATION
Land and buildings
 Extension to the building at the cost of R120 000.

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Grade 12 Accounting 2 Free State
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 Repairs to the store room amounts to,R25 000

Vehicles
 Traded in an old vehicle on 1 September 2015 for R55 000 on a
new vehicle costing R150 000 bought on credit from Jozi Motors.
The traded-in vehicle was bought on 1 March 2013 for
R100 000.
 Depreciation on vehicles is calculated at 20% p.a. on the
diminishing balance method (carrying value).
Equipment
 Kgosi Traders bought eight laptops at R6 000 each on
1 December 2015.
 Depreciation on equipment is calculated at 10% p.a on the cost
price method.

QUESTION 3: FIXED ASSETS AND ASSETS DISPOSAL

MBENGULA TRADERS

The following note to the Balance Sheet of Mbengula Traders was

extracted on 28 February 2017.
REQUIRED:

3.1 Using the following information below, complete the Fixed Asset
Note to the Balance Sheet on 28 February 2017. (26)

3.2 Prepare the Asset Disposal Account to show the sale of the used
equipment. (10)

3.3 The owner is concerned about the fact that the equipment was
sold at a loss as according to the market valuation, he could have
received R55 000.

Give TWO possible reasons as to why the loss was incurred and
suggest TWO precautionary measures that can be taken in future
to prevent further losses. (8)

3.4 P. Masondo received a report from the accountant that T.

Makhubela, a partner takes the new van home every weekend. It
has also come to his attention that the petrol account reflects that
the van is filled with fuel every Friday afternoon and on Monday
mornings. This is recorded as a business expense.

Provide THREE points of advice to P. Masondo on how to resolve

the problem. (6)

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INFORMATION:

Fixed asset note to the financial statements on 28 February 2017.

LAND &
FIXED ASSETS VEHICLES EQUIPMENT
BUILDINGS
Carrying value at the beginning of the
year 1 200 000 120 000
Cost
880 000 450 000
Accumulated depreciation
(180 000)
Movements
Additions at cost

Disposal at carrying value

(46 080)
Depreciation

Carrying value at the end of the year

Cost
Accumulated depreciation

ADDITIONAL INFORMATION:
A. During the year an invoice was received from MM Builders for
R250 000. This was for the building of an additional storeroom. The
full amount has been debited to Repairs.
B. A new vehicle was bought on credit for R350 000 on
1 November 2016. The owner also paid to have a tracking device
installed, costing R10 000.
C. Vehicles are depreciated at 15% p.a. on cost.
D. On 28 February 2017 old equipment, which originally cost R120 000,
was traded in at a loss of R12 000. New equipment worth R150 000
was purchased on 28 February 2017.
E. Equipment is depreciated by 20% p.a. on the diminishing balance
method.

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Question Paper

QUESTION 4: FIXED ASSET NOTEAND ASSET DISPOSAL

The following information relates to Masimanga Traders. The financial year ended
on 28 February 2018.

REQUIRED:

4.1 Name TWO reasons why fixed assets can be sold. (2)

4.2 Briefly explain a fixed asset register. (2)

4.3. Prepare an asset disposal account on 1 December 2017. (7)

4.4 Calculate the missing amounts denoted by (a) to (f). (19)

INFORMATION:
A. Fixed assets:
LAND AND EQUIP-
VEHICLES
BUILDINGS MENT
Carrying value (1/03/2017) (a) 175 000
Cost 700 000 510 000
Accumulated depreciation (525 000)
Movements:
Additions 500 000 (b) 0
Asset Disposals 0 0 (e)
Depreciation (c) (f)
Carrying value (28/02/2018) 1 500 000 (d)
Cost 900 000 420 000
Accumulated depreciation

 The new vehicle was purchased on 1 September 2017.

Depreciation on vehicles is calculated at 20% p.a. on the
diminishing method.
 Equipment with a cost price of R? were sold on 1 December 2017
for R52 000 cash. Accumulated depreciation on this equipment on
1 March 2017 amounts to R30 000. Depreciation on equipment is
calculated at 10% on the cost price.

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 Grade 12 Accounting 5 Free State
Question Paper

QUESTION 5: FIXED ASSETS

5.1 VOS TRADERS

The information relates to the financial year ended on 28 February 2019.

REQUIRED:

5.1.1 Calculate the missing amounts denoted by (i) to (iv). (15)

INFORMATION:

A. Extract: Fixed Assets Note

LAND AND
EQUIPMENT
BUILDINGS
Carrying value (1/03/2018) 324 000
Cost 3 800 000 810 000
Accumulated depreciation (486 000)
Movements:
Additions (ii)
Disposals (600 000) (iii)
Depreciation (iv)
Carrying value (28/02/2019) (i)
Cost 840 000
Accumulated depreciation

B. New equipment was purchased on 1 September 2018.

C. Old equipment, costing R120 000, was sold on 1 December 2018 for
R35 000 cash. Accumulated depreciation of these equipment on
1 March 2018 was R72 000.

D. Equipment is depreciated at 15% p.a. on cost.

QUESTION 6: FIXED ASSETS

6.1 FIXED ASSET MANAGEMENT

The information relates to Kobus Traders for the financial year ended
28 February 2019.

REQUIRED:

6.1.1 Calculate the amounts denoted by (i) to (iv) on the Fixed Asset note. (11)

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INFORMATION

A. Fixed Asset Note

LAND AND VEHICLES EQUIPMENT
BUILDING
Carrying value on 1 March 1 500 000 250 000
2018
Cost 740 000 520 000
Accumulated depreciation 0 (ii) (210 000)
Movements
Additions (i) 330 000 160 000
Disposal at carrying value 0 0 (77 248)
Depreciation 0 (iii)
Carrying value on 28 1 860 000 (iv)
February 2019
Cost (v)
Accumulated depreciation (617 500)

B. Extension to the warehouse was done during the year.

C. A new vehicle was purchased on 1 November 2018.

D. On 1 December 2018, equipment with a cost of R142 000 was traded-in for new
equipment. This trade-in resulted in a loss on disposal of asset of
R20 948.

QUESTION 7: FIXED ASSETS

The following information relates to Odette Ltd. The financial year ended on
28 February 2017.

REQUIRED:

7.1 Refer to Information B.

Calculate the missing amounts denoted by (a) to (e). (22)

INFORMATION:

A. Amounts extracted from the records on 28 February 2017:

Balance Sheet accounts section R

Fixed assets (carrying value) ?

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Grade 12 Accounting 7 Free State
Question Paper

B. Fixed assets:

LAND AND
VEHICLES EQUIPMENT TOTAL
BUILDINGS
Cost 350 000 460 000
Accumulated depreciation (315 000)
Carrying value (01/03/2016) (a) 35 000
Movements:
Additions 325 000 422 550 0
Disposals 0 0 (d)
Depreciation (b) (13 766)
Carrying value (28/02/2017) 2 550 000 (c) 50 994 (e)
Cost 772 550 340 000
Accumulated depreciation

 Depreciation on vehicles is calculated at 20% p.a. on cost.

 The company has two vehicles on 28 February 2017. One of these vehicles
was purchased on 1 September 2016.

 Extract from the Fixed Assets Register in respect of equipment sold:

Fridge (Model X3)

Date purchased: 1 March 2014
Date sold: 31 December 2016 Sold for: R81 250

Depreciation rate: 10% p.a. (diminishing-balance method)

COST DEPRECIATION BOOK VALUE
28 February 2015 R120 000 R12 000 R108 000
29 February 2016 ? ?
31 December 2016 ? ?

QUESTION 8: FIXED ASSETS

8.1 MINDEW LIMITED

The financial year-end is 31 May 2018.

REQUIRED:

8.1.1 Explain how the internal auditor should check that movable fixed assets
were not stolen. (2)

8.1.2 Land and buildings were bought five years ago for R6 m. Property
prices have increased by 20% since then. The directors want to
increase the value of this asset and reflect a profit of R1 200 000 in the
financial statements.

As an independent auditor, what advice would you give? Provide ONE

point. (2)

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Grade 12 Accounting 8 Free State
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INFORMATION FOR YEAR-END 31 MAY 2018:

A. FIXED ASSETS
LAND AND
COMPUTERS EQUIPMENT VEHICLES
BUILDINGS
Carrying value: Begin 6 000 000 13 000 1 027 500 1 300 000
Cost 6 000 000 108 000 1 250 000 2 100 000
Accumulated
- (95 000) (222 500) (800 000)
depreciation
Movements
Additions (i) 0 172 500 0
Disposals 0 0 0 (iv)
Depreciation 0 (ii) (iii) (256 000)
Carrying value: End
Cost
Accumulated
(v)
depreciation

B. Land and buildings:

Grant Construction was paid R882 000 for building new offices

(R610 000) and repairing windows (R272 000).

C. Computers:

 The three computers were all bought on the same day at R36 000
each.
 Depreciation is 33⅓% on cost.
 These computers are expected to last another two years.

D. Equipment:

 Additional equipment was purchased on 1 February 2018.

 Depreciation is 10% p.a. on cost.

E. Vehicles:

 Depreciation is 20% p.a. on carrying value.

 A vehicle was sold for cash at carrying value on 31 December 2017.
The Fixed Assets Register reflected the following:

Cost R176 000

Accumulated depreciation (1 June 2017) R128 000

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