JUNE EXAMINATION

GRADE 12

2024

ACCOUNTING

(PAPER 2)

TIME: 2 hours

MARKS: 150

11 pages + 1 formula sheet and an answer book of 10 pages

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INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

1. Answer ALL the questions.

2. A special ANSWER BOOK is provided to answer ALL the questions.

3. Show ALL workings to earn part-marks.

4. You may use a non-programmable calculator.

5. You may use a dark pencil or blue/black ink to answer the questions.

6. Where applicable, show ALL calculations to ONE decimal point.

7. A Financial Indicator Formula Sheet is attached at the end of this question paper. The
use of this formula sheet is NOT compulsory.

8. Write neatly and legibly.

9. Use the information in the table below as a guide when answering the question paper.
Try NOT to deviate from it.

QUESTION TOPIC MARKS MINUTES

1 Cost Accounting 60 48
2 Inventories 65 52
3 Fixed Assets 25 20
TOTAL 150 120

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QUESTION 1: COST ACCOUNTING (60 marks; 48 minutes)

1.1 CONCEPTS

Choose a cost category from COLUMN B that matches a description in COLUMN A.

Write only the letter (A – E) next to the question numbers (1.1.1 to 1.1.3) in the
ANSWER BOOK, e.g. 1.1.4 F.

COLUMN A COLUMN B
1.1.1 Import duties paid for raw A Factory overhead cost
materials purchased
B Direct labour cost
1.1.2 Depreciation on office
equipment C Selling and distribution cost

1.1.3 Wages for factory workers D Administration cost

E Direct material cost (3)

1.2 PERFECT EATS

Perfect Eats manufactures stainless steel cutlery. The

business manufactures a 24-piece cutlery set which consists of
6 x knives, 6 x forks, 6 x dessert spoons and 6 x teaspoons.

The business produced and sold 46 300 cutlery sets during the financial year.
The financial year ends on 31 March 2024.

REQUIRED:

1.2.1 Refer to Information B.

Calculate the following for the year ended 31 March 2024:

 Raw materials (kg) issued to the factory (2)

 The total cost of raw materials issued to the factory (3)

1.2.2 Complete the Production Cost Statement for the year ended
31 March 2024. (15)

1.2.3 Complete the Abridged Statement of Comprehensive Income for the year
ended 31 March 2024. (13)

1.2.4 The owner is concerned about the amount of raw materials wasted during
the manufacturing process.

 Calculate the total cost of wasted raw materials. (6)

 Give ONE point of advice on how the owner can recover this loss. (2)

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INFORMATION:

A. Stock balances

31 March 2024 31 March 2023

Work-in-progress stock ? 384 000
Finished goods stock 251 000 210 000

B. Raw materials:

Records of stainless steel used in the production process:

Total cost
Total
including
kilograms
transport
Balance on 1 April 2023 6 972 kg R603 078
Purchases during the year 42 000 kg R3 633 000
Total available during the year 48 972 kg R4 236 078
Balance on 31 March 2024 9 702 kg ?
Raw materials issued to the factory ? ?

 Each set takes 0,84 kilograms of stainless steel.

 The raw material cost per set is R72,66.
 Raw materials are issued to the factory at R86,50 per kg.

C. The bookkeeper calculated the following cost for the financial year
ending 31 March 2024:

Factory overhead cost R1 580 900

Administration cost R890 700
Selling and distribution cost R2 145 000

It was discovered that the following adjustments have not been taken into
account:

 Provision for bad debts must increase by R3 780.

 An invoice of R76 800 for the Administration Department was received
on 31 March 2024. This was for repairs, R2 900 and an additional office.
 New stamping presses were purchased during the year. An additional
insurance policy was taken out on 1 November 2023 until
31 October 2024 for R18 000. This was recorded.
 The monthly rent of R19 000 for March 2024 was incorrectly allocated to
the factory. 75% of the rent is used in the factory and the balance is
distributed equally between the Administration and the Sales and
Distribution Department.

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 The factory foreman received a bonus during his birthday month in

March 2024. The bookkeeper correctly showed his annual salary but he
did not indicate his bonus during his birthday month. His bonus details
are as follows:

Gross Deductions Net Contributions

salary PAYE UIF Salary UIF
? 25% 1% R17 020 1%

D. Additional information:

 The total primary cost is R3 946 120.

 The total cost of finished goods produced was R5 604 000.
 The business uses a fixed mark-up of 70% on cost.

1.3 CLEAR WATER PRODUCERS

Clear Water Producers manufactures swimming pool

chemicals. The business is owned by Solly Scott.
The financial year ends on 31 May 2024.
Active Algaecide Treatment is one of their products.

REQUIRED:

1.3.1 Determine the total number of extra units that need to be manufactured
to reach the goal of increasing profits by R75 000 in the next financial
year. (4)

1.3.2 In 2024, the owner Solly intentionally made strategic decisions regarding
variable costs to improve the business. Identify TWO costs that were
effectively controlled, resulting in a positive impact on the business. (6)

1.3.3 The selling price increased by 12,5% from 2023 to 2024. Explain how
this impacted on the performance of the business. Quote figures or
calculations. (4)

1.3.4 Explain to Solly why the fixed cost per unit decreased by R1,11 while the
total fixed cost increased by R313 680. (2)

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INFORMATION:

Active Algaecide 2024 2023

Treatment TOTAL UNIT COST TOTAL UNIT COST
Direct material cost R6 435 200 R80,44 R4 464 000 R62,00
Direct labour cost R2 240 000 R28,00 R2 448 000 R34,00
Selling and
R1 569 600 R19,62 R1 296 000 R18,00
distribution cost
VARIABLE COST R10 244 800 R128,06 R8 208 000 R114,00
FIXED COST R3 935 280 R49,19 R3 621 600 R50,30

Selling price per

R180,00 R160,00
unit
Break-even point 75 766 units 78 730 units
Number of units
80 000 units 72 000 units
produced and sold

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QUESTION 2: INVENTORIES (65 marks; 52 minutes)

2.1 CONCEPTS

Provide the correct term for each of the following descriptions by choosing from
the list provided. Write only the correct term next to the question numbers
(2.1.1 to 2.1.5) in your ANSWER BOOK.

Periodic inventory system; First-in-First out; Specific identification;

Perpetual inventory system; Weighted-average method

2.1.1 Each item sold is specifically identified as it appears on the purchase

invoice.

2.1.2 This system requires computers and bar codes.

2.1.3 This method is preferably used to value goods with a limited shelf life.

2.1.4 This method is used when large volumes of similar stock items are
purchased.

2.1.5 The Trading Stock Deficit Account is not completed. The business will
forfeit the reduction of taxable income. (5)

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2.2 LILY STATIONERS

Lily is the owner of a business which sells stationery and office equipment. The
financial year ended on 29 February 2024. The business makes use of the
periodic inventory system.

REQUIRED:

Refer to Information (A) and answer the following questions regarding calculators.

2.2.1 Calculate the value of the closing stock using the first-in-first-out (FIFO)
method of stock valuation on 29 February 2024. (7)

2.2.2 Calculate the cost of sales for the year ended 29 February 2024. (10)

2.2.3 Calculate the percentage mark-up achieved in 2024. (5)

2.2.4 Lily considers changing the stock valuation method to the weighted-
average method. She feels that this method would be more beneficial to
the business as this will result in a higher cost of sales. The bookkeeper
advised Lily that he does not agree, because this does not comply with the
requirements of GAAP.

 Calculate the cost of sales using the weighted-average method to

support her opinion. (5)
 Give ONE reason why Lily thinks it would be beneficial to the
business. (2)
 Give TWO reasons why the bookkeeper feels that this does not
comply with the requirements of GAAP. (4)

2.2.5 Lily decided to donate 250 calculators from the stock in the next financial
year to the local high school for children that could not afford to buy their
own calculators.

Provide TWO reasons why it is beneficial to support the local school by

sponsoring calculators to them. (4)

Refer to Information (B) and answer the following questions regarding

shredders.

2.2.6 The specific identification method is used to maintain the stock record of
shredders.

 Calculate the value of the closing stock of shredders. (5)

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2.2.7 Even though security cameras are installed, the owner remains worried
about potential theft within the LX Shredder (5 sheet, 6,8 mm) product line.

 Provide a calculation to prove the owner’s concern. (5)

 Give TWO points of advice that Lily can implement to prevent this from
occurring. (4)

INFORMATION:

A. Stock records of calculators:

Number of Unit price Total
units (R) (R)
Balance on 1 March 2023 1 200 120 840
Total purchases during the year: 17 000 2 006 700
July 2023 4 500 102,00 459 000
September 2023 4 800 114,00 547 200
November 2023 5 800 125,00 725 000
January 2024 1 900 145,00 275 500
Returns to suppliers:
September 2023 (65) ?
January 2024 (350) ?
Subtotal 17 785 ?
Sales ? 200 ?
Balance on 29 February 2024 1 654 ? ?

 The cost of transporting calculators is 6% of the unit price. These costs

were not included in the unit price above.
 The business does not get a refund on carriage costs for returns of
goods to the suppliers.

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B. Stock record of shredders:

LX Shredder TP Shredder
(5 sheets, 6,8 mm) (12 sheets, 40 mm)
Unit Unit
Total Total
Units price Units price
(R) (R)
(R) (R)
Balance on
24 21 600 12 18 000
1 March 2023
Purchases: 173 155 700 75 112 500
August 2023 72 900 64 800 25 1 500 37 500
November 2023 55 900 49 500 18 1 500 27 000
January 2024 46 900 41 400 32 1 500 48 000
Balance on
21 ? ? ?
29 February 2024
Sales 169 78

 No shredders were returned to the suppliers.

 The total cost includes the carriage on purchases.

2.3 PROBLEM-SOLVING

Clean Smart Traders is owned by Alex Glue. They sell different types of vacuum
cleaners.

All vacuum cleaners are imported from the USA and takes a minimum of 15 working
days for goods to be delivered once the order has been placed.

You are presented with the information related to each vacuum cleaner for the year
ended 31 May 2024.

REQUIRED:

Identify a unique problem for each product, accompanied by relevant figures. Give
Alex a recommendation for addressing the identified problem for each product. (9)

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INFORMATION:

Automatic Handheld Wet and dry

cordless vacuum handheld vacuum
vacuum cleaner cleaner
cleaner
Units available for sale 4 400 5 480 4 470
Closing stock 930 290 470
Units sold 3 470 5 190 4 000
Returns by customers 30 110 49
Stock holding period 98,7 days 20,8 days 43,4 days
(closing stock)
Average stock turnover 3,6 times 9,9 times 6,1 times
rate
% Gross profit on cost of 80% 70% 80%
sales
Selling price per unit R1 836 R935 R1 275
Total net sales R6 315 840 R4 749 800 R5 037 525
Credit sales R4 681 800 R2 524 500 R2 805 000
Deposits from cash sales R1 634 040 R2 225 300 R2 218 500

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QUESTION 3: MANAGEMENT OF FIXED ASSETS (25 marks; 20 minutes)

Patrick van Wyk is the owner of Van Wyk’s Transportation Services. The business
specialises in the transportation of bulk goods. The accounting period ends on
29 February 2024.

REQUIRED:

3.1 Refer to the information to calculate the missing figures/parts indicated on the
Fixed Asset Register.

(i) The purchase price of the Kia Truck (2)

(ii) The rate of depreciation (3)
(iii) Determine/Calculate the date of purchase. (5)
(iv) Depreciation for the year ended 29 February 2024 (2)
(v) Accumulated depreciation on 29 February 2024 (2)
(vi) Book/Carrying value on 29 February 2024 (2)

3.2 Patrick van Wyk wants to know why it is important to have an asset register for
the business. Give ONE reason. (1)

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3.3 Comment on the use and condition of the Kia Truck and how the business
should manage this vehicle and why. (2)

3.4 Patrick is concerned about the use of vehicles in the business. A number of
vehicles have excess mileage and are in poor condition. The fuel expense is
very high in Patrick’s opinion. Explain THREE internal control measures to
manage the vehicles of the business more efficiently. (6)

INFORMATION:

Fixed Asset Register

Van Wyk’s Transportation Services No. 8

General Ledger Account: Vehicles Date of purchase: (iii)
Item: Kia Truck Registration: DGP 548 GP
Supplier: Reddy Motors Purchase price: (i)
Depreciation method and rate: (ii)
Details of depreciation:
Book value/
Accumulated
Date Depreciation Carrying
depreciation
value
(iii) ? ? ?
28 Feb 2022 96 000 144 000 176 000
28 Feb 2023 96 000 240 000 80 000
29 Feb 2024 (iv) (v) (vi)

Additional information:
 The fixed asset register is for the Kia truck (DGP 548 GP).
 The business purchased the truck a few years ago from Reddy Motors.
 The current mileage on the truck is 232 372 km.
 The truck is depreciated on the fixed instalment method.

25

TOTAL: 150

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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
Average shareholders' equity 1 Number of issued shares 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.