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GAUTENG DEPARTMENT OF EDUCATION

PROVINCIAL EXAMINATION
NOVEMBER 2019
GRADE 10

ACCOUNTING
PAPER 2

TIME: 2 hours

MARKS: 150

9 pages, 1 formula sheet and a 10 page answer book

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Accounting/P2 2 GP/November 2019
Grade 10

INSTRUCTIONS AND INFORMATION

Read the following instructions carefully and follow them precisely.

1. Answer ALL the questions.

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

3. A FORMULA SHEET for financial indicators is provided at the end of this

question paper. You may use this if necessary.

4. Show ALL workings in order to achieve part-marks.

5. You may use a non-programmable calculator.

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

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

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 1: 10 marks; 10 minutes

Topic: This integrates:
VAT and Ethics VAT concepts
Ethics

QUESTION 2: 45 marks; 35 minutes

Topic: This integrates:
Debtors' Reconciliation
Debtors' Reconciliation
Internal control

QUESTION 3: 20 marks; 15 minutes

Topic: This integrates:
Fixed asset register
Fixed Assets
Internal control

QUESTION 4: 30 marks; 25 minutes

Topic: This integrates:
Inventory Inventory and Internal control

QUESTION 5: 45 marks; 35 minutes

Topic: This integrates:
Manufacturing and Budgeting Concepts and calculations

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Accounting/P2 3 GP/November 2019
Grade 10

QUESTION 1: VAT AND ETHICS (10 marks; 10 minutes)

1.1 VAT

Choose a term from the list below that completes each of the following
statements. Write only the term next to the question number (1.1.1–1.1.6) in the
ANSWER BOOK.

R500 000; direct; output; 0%; indirect; 14%;

SARS; zero-rated; input; exempt; R1 000 000; 15%

1.1.1 VAT is a / an … system of taxation.

1.1.2 In South Africa the standard rate of VAT is currently … .

1.1.3 VAT payable on sales is known as VAT … .

1.1.4 Brown bread is an example of an item that is … .

1.1.5 Items on which VAT is currently not charged are known as …

items.

1.1.6 A business with a turnover or sales of … or more per year

should register as a VAT vendor.

(6)

1.2 Ethics

Mgluwa Traders ordered goods with a market value of R18 000 from Ceta
Suppliers. The sales director of Ceta Suppliers, Peter Slow, offered to sell the
goods to Mgluwa Traders at R8 000 on the condition that they do not issue an
invoice. Comment on this suggestion. Provide TWO points. (4)

10

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Accounting/P2 4 GP/November 2019
Grade 10

QUESTION 2: RECONCILIATION (45 marks; 35 minutes)

The information below relates to Sunshine Traders for September 2019.

REQUIRED:

2.1 Prepare a correct Debtors’ Control Account for September 2019 by taking into
account errors and omissions. Balance the account. (20)

2.2 Prepare a correct list of debtors as at 30 September 2019. (21)

2.3 Discuss TWO strategies that can be implemented to encourage debtors to pay
their accounts on time. (4)

Note: Show all your calculations in brackets.

INFORMATION:

GENERAL LEDGER OF SUNSHINE TRADERS

Dr DEBTORS’ CONTROL Cr
Bank and
2019 2019
01 Balance b/d 21 370 30 discount CRJ 24 380
Sep Sep
allowed
30 Sales DJ 31 920 Journal credits GJ 580
Debtors’
DAJ 980 Bank (r/d) CPJ 600
allowances
Journal
GJ 820 Balance c/d 29 530
debits
55 090 55 090
2019
01 Balance b/d 29 530
Oct

Note: The bookkeeper made errors when posting to the Debtors’ Control Account.

List of debtors as at 30 September 2019

DEBTOR Debit Credit

S. Taylor 6 500
P. Africa 7 480
G. Kruger 5 340
M. Ahmed 1 890
R. Dioka 6 760
P. Hlapa 800
T. Makobo 1 800
29 770 800

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Accounting/P2 5 GP/November 2019
Grade 10

Errors and omissions:

A. The balance of the Debtors’ Control Account on 1 September 2019 is incorrect.

The list of debtors reflected a credit balance of R530, which was not taken into
account when determining the opening balance.

B. A receipt issued to M. Ahmed for R980 cash received was recorded correctly in
the subsidiary journal, but was posted to her account as R890.

C. The total of the Debtor’s Allowances column in the Debtors’ Allowances Journal
was under-cast by R160.

D. An entry in respect of goods returned by T. Makobo to the value of R300 was

correctly entered in the Debtors’ Allowances Journal but entered on the wrong side
of T. Makobo’s account.

E. The Debtors’ Ledger reflects the credit balance in the account of P. Hlapa. The
amount must be transferred to the Creditors’ Ledger.

F. On 28 September 2019, R120 postage was paid on behalf of a debtor, G. Kruger

from the petty cash. No entry was made in the books.

G. P. Africa paid R3 800 on her account after she received a 5% discount. The
payment and discount were recorded correctly in the subsidiary journal but the
discount was not posted to her account. (Round-off the answer to the nearest
rand.)
45

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Accounting/P2 6 GP/November 2019
Grade 10

QUESTION 3: FIXED ASSETS (20 marks; 15 minutes)

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

REQUIRED:

3.1 Calculate the depreciation on equipment for the year ended 28 February 2019. (5)

3.2 Calculate the carrying value (book value) of equipment on 28 February 2019. (4)

3.3 You are provided with a page from the Asset Register for an item of vehicles (a
Pick-up-Loader) in your ANSWER BOOK. Complete the asset register. (5)

3.4 State ONE reason why the asset register is a valuable tool in asset
management. (2)

3.5 It was discovered after preparing the financial statements that the fuel expenses
have increased by 80% from last year. The driver who does deliveries takes the
vehicle home every day after work. State TWO internal control measures that
the owner can put in place to reduce the misuse of the delivery vehicle by the
driver. (4)

INFORMATION:

A. Extract from the pre-adjustment trial balance on 28 February 2019

Balance Sheet Account Section Debit Credit
Land and buildings 150 700
Vehicles (cost) 150 000
Equipment (cost) 33 000
Accumulated depreciation on vehicles (1/3/2018) 26 400
Accumulated depreciation on equipment (1/3/2018) 12 500

B. Adjustments and additional information:

Depreciation for the year is as follows:

 Vehicles at 20% per annum on the diminishing balance method

 Equipment at 10% per annum on the cost price

 The owner contributed additional equipment of R14 000 on

1 September 2018 and correctly recorded on this date.
20

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Accounting/P2 7 GP/November 2019
Grade 10

QUESTION 4: INVENTORY (30 marks; 25 minutes)

The information below relates to Booma Traders for March 2019. They use the perpetual
(continuous) inventory system to record and manage trading stock. Booma Traders uses a
mark-up of 40%.

REQUIRED:

4.1 Use the following information to set up the Trading Stock account.
Balance the account. (Round-off amounts to the nearest rand.) (24)

4.2 Answer the following questions.

4.2.1 After a physical stock count on 31 March 2019, the actual value of the
trading stock on hand was found to be R1 400 less than the balance
you have calculated in the trading stock account. Provide TWO
possible reasons for the difference between these two amounts. (4)

4.2.2 The business purchases more on cash than on credit. Prove this
statement by giving figures (amounts) to motivate your answer. (2)

INFORMATION:

A. The total stock in the storeroom on 1 March 2019 has a value of R4 500.

B. Total cash sales for March amounts to R1 260.

C. Total credit sales for March amounts to R840.

D. Total trading stock purchased for cash is R5 000.

E. Total trading stock purchased on credit is R1 400.

F. The total debit notes for trading stock returned issued during March amounts to
R1 000.

G. The owner took stock to the value of R2 000 for own use.
30

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Accounting/P2 8 GP/November 2019
Grade 10

QUESTION 5: MANUFACTURING AND BUDGETS (45 marks; 35 minutes)

5.1 MANUFACTURING

5.1.1 Choose the correct term from those within brackets. Only write the
term next to the number (5.1.1(a) – 5.1.1(c)) in the ANSWER BOOK.

(a) Direct labour and direct material used in the factory are
equal to the total (overhead / prime) costs.

(b) The salary of the factory cleaner is a (direct / indirect) labour

cost.

(c) The rental of a building is considered as a (fixed / variable) cost. (3)

5.1.2 Dan Malgas manufactures and sells kites for children. The selling price
per kite is R155. Below is a summary of all his costs for October 2019.
He manufactured 2 500 kites during October.

REQUIRED:

Calculate the following:

(i) Direct material cost per kite (4)

(ii) Total manufacturing overheads for October 2019 (5)

(iii) Total production cost for October 2019 if 2 500 kites were
produced (7)

(iv) Unit cost of production (3)

(v) What is the percentage profit Dan earned per kite during
October 2019, if the kites were sold at R155 each? (4)

(vi) Explain the difference between fixed and variable costs. (4)

INFORMATION:

Costs per kite

Material per kite R25
Wood per kite R5
Line per kite R5
Wages per kite completed R50
Costs for the month
Salary of factory foreperson R5 000
Rent of factory R8 000
Water and electricity of the factory R2 500
Indirect material cost R500

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Accounting/P2 9 GP/November 2019
Grade 10

5.2 BUDGETS

Refer to the information relating to Mbolweni Traders budget and answer

the questions that follow.

Cash budget of Mbolweni Traders for January to March 2020

CASH RECEIPTS JANUARY FEBRUARY MARCH
Cash sales 42 000 56 000 63 000
Receipts from debtors 25 200 21 600 45 800
Capital contribution 20 000
TOTAL RECEIPTS 67 200 77 600 128 800
CASH PAYMENTS
Cash purchase of stock 3 000 4 000 4 500
Payments to creditors 34 155 32 040 37 733
Drawings 4 500 4 500 4 500
Loan repayment 10 000
Interest on loan 1 600 1 600 1 600
Advertising 600 800 900
Salaries and wages 2 000 2 000 2 160
TOTAL PAYMENTS 45 855 44 940 61 393
Cash surplus / (deficit) 21 345 32 660 ?
Bank opening balance 8 400 29 745 62 405
Bank closing balance 29 745 62 405 ?

REQUIRED:

5.2.1 What is the aim of preparing a cash budget? (2)

5.2.2 Name TWO items which will not appear in a cash budget. (2)

5.2.3 If cash sales are 60% of the total sales, calculate the total sales for
January. (5)

5.2.4 Determine the cash surplus / (deficit) for March. (3)

5.2.5 Determine the bank balance at the end of March. (3)

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TOTAL: 150

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Accounting/P2 10 GP/November 2019
Grade 10

FORMULA SHEET GRADE 10

Current assets : Current liabilities (Current assets – Inventories) : Current liabilities

Total assets : Total liabilities

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