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ACCOUNTING – GRADE 11
MAY EXAMINATION 2009
MARKS: 300
TIME: 3 HOURS
This question paper consist of 13 pages and an answer book.
INSTRUCTIONS
• You are provided with a question paper and an answer book.
The paper comprises 5 questions. Answer all questions.
• Use the formats provided in order to reflect your answers.
• Workings must be shown in order to achieve part-marks.
• You must attempt to comply with suggested time allocated to each question.
• Non-programmable calculators may be used.
• Use only blue or black ink.
Marks Time
QUESTION 1
Partnership • LO1: Financial Information
• AS1: Accounting concepts
• AS2: Recording information 127 76
• AS5: Final accounts and Financial
Statements
QUESTION 2
Bank • LO1: Financial Information
reconciliation • AS4: Prepares bank reconciliation 55 33
Statements
QUESTION 3
Sports Clubs • LO1: Financial Information
• LO3: Managing resources
• AS5: Identifies and analyses ethical 38 23
behaviour
QUESTION 4
Asset disposal • LO3: Managing Resources
• AS3: Calculate and record depreciation, the 44 26
acquisition and disposal of assets
QUESTION 5
Partnership
Ratio Analysis • LO1: Financial Information 36 22
• AS5: Financial Statements
The information below was taken from the books of Magnum Traders (with partners T
Thirsk and M Martin) on 29 February 2008.
INSTRUCTIONS
1.1. Draw up a statement to calculate the net profit for the year ended 29 February
2008. (64)
2. The name of one employee was erroneously omitted from the Salaries Journal
for February. He was on vacation and his salary was paid only on 10 March
2008.
Details of his salary are:
Monthly salary: R6 000
PAYE deduction: 20% of gross salary
Pension Fund deduction: 5% of gross salary
Medical Aid Fund deduction: R250 per month
Magnum Traders contribute towards the Pension Fund and Medical Aid Fund on
a rand-to-rand basis.
ACCOUNTING 4 MAY EXAMINATION 2009
A new computer for R4 500 was purchased on credit from N Bales on 1 July
2007. This has been correctly recorded.
4. Three month’s interest on fixed deposit is still receivable. The Fixed Deposit
Account appears as follows:
5. The interest on the mortgage bond for last month has not yet been paid. A
repayment of R2 000 will be made on 31 August 2008.
6. A debtor, M Shield has disappeared and his debt must be written off as
irrecoverable, R600.
11. An account for repairs to partner M Martin’s personal vehicle was paid by the
firm on 25 February 2008, R280. The Vehicle Expenses Account was
erroneously debited.
ACCOUNTING 5 MAY EXAMINATION 2009
12.4. Profits and losses must be divided in the ratio 3:2 between Thirsk and
Martin. Correct figures to the nearest Rand.
M Martin increased his capital contribution by R50 000 on 1 November
2007.
INSTRUCTIONS
2.1 Use the Bank Reconciliation Statement of Frosty Traders on 28 February 2007,
(their financial year end) to answer the questions below.
DEBIT CREDIT
Debit balance as per bank statement 6 180
Credit outstanding deposit 15 400
Debit outstanding cheques
No 4110 (dated 20 September 500
2006)
No 4282 (dated 16 December 1 130
2006)
No 4309 (dated 26 February 2007) 3 890
No 4318 (dated 25 April 2007) 1 780
Credit incorrect debit on bank 1 440
statement
Debit balance as per bank account 3 360
16 840 16 840
2.1.1 What kind of balance does Frosty Traders have according to the bank
statement? (2)
2.1.2 Why might the bank not have reflected the deposit of R15 400 on the
bank statement for February? (2)
ACCOUNTING 6 MAY EXAMINATION 2009
2.1.3 If cheque 4110 does not appear on the bank statement in March, what action
will have to be taken and why? (4)
2.1.4 Explain the entry for R1 440 on the Bank Reconciliation Statement. (2)
2.1.5 Frosty Traders received a cheque for of R2 600 on 26 February 2007. The
cheque was dated 26 March 2007. Why does the cheque not appear on the
Bank Reconciliation Statement? (4)
2.1.6 What will have to be done with cheque 4318 in the financial statements,
as it is the financial year-end? (6)
2.1.7 Explain why it is important for a business to reconcile its bank account every
month. (4)
2.2 Analyse the given instructions of Harrington Stores for July 2007 as illustrated in
the example. If no entry is required, write “no entry” in the columns.
Example
The bank statement for July showed an unpaid cheque. This cheque drawn by a
debtor, S Rock for R300 was dishonoured by the bank due to insufficient funds.
BANK RECONCILIATION
NO CASH JOURNALS STATEMENT
Cash Receipts Cash
Journal Payments Debit Credit
Journal
e.g. - 300 - -
TRANSACTIONS
The accountant of Harrington Stores compared the bank statement for July 2007,
received from FNB Bank, with the Cash Journals for July 2007 and the Bank
Reconciliation Statement at 30 June 2007. He found the following differences.
2 A cheque for R395, issued during June 2007 to the City Treasurer for Rates, was
lost in the post. On 31 July 2007 it was decided to stop payment of the cheque,
cancel it and replace it with a new cheque, no. 531 to pay the Rates for both
June 2007 and July 2007.
( Rates remain constant throughout the year)
ACCOUNTING 7 MAY EXAMINATION 2009
3 The following items appeared in the Bank Statement for July 2007, but not in the
Cash Journals:
Levy on credit card sales …………….R37
Service fees ………………………… 80
Interest on credit balance …………… 134
Government levy on cheques ………. 30
4. Cheque no. 452 for R733 was listed as outstanding in the June 2007 Bank
Reconciliation Statement. An investigation revealed that this cheque was
issued in favour of Telkom to pay the personal telephone account of the owner,
S Harry. The bank statement for July 2007, however, shows the amount
correctly as R337.
5. The monthly stoporder for R650 for vehicles insurance, payable to Gebon
Insurers, was reflected on the July 2007 bank statement. No entry has been
made in the Cash Journals.
6. An amount of R1 500 which appears on the bank statement on 26 July 2007
was deposited directly into the current bank account of the business by the
tenant, D.Snoop.
7. Entries in the Cash Payment Journal which did not appear in the bank
statement for July 2007:
8. Cheque no. 128 for R350 (dated 3 January 2007) has not been presented for
payment at the bank. The cheque was a donation to the KZ Soccer Club, which
has since ceased to exist.
9. The bank statement for July 2007 shows a dishonoured cheque for R180. This
cheque had been received from a debtor. The cheque was dishonoured
because it was postdated for 2 August 2007.
(21)
ACCOUNTING 8 MAY EXAMINATION 2009
Describe THREE control measures, which the business could use to ensure
transparency and proper control of cash in the business.
(10)
The following information was taken from the books of Slytherin Sports Club.
INSTRUCTIONS
Complete the Membership fees account in the general ledger for the year ended
31 December 2006.
6. One member moved to another club. His membership fees were refunded.
ACCOUNTING 9 MAY EXAMINATION 2009
Instructions
Study the following ledger accounts and answer the questions that follow.
INFORMATION
The following accounts appear in the general ledger of Gryffindor Quidditch club for
the period 1 November 2005 to 31 October 2006.
Amount used as
current income 1 540
4400 4 400
Note: Entrance fees are R80 for new members, payable on joining the club.
CLUB BADGES
2005 2005
NOV 1 Stock Badges 500 Oct 31 Bank (sales) 2 400
2006 Donation ?
Oct 31 Bank (purchases) 1 600 Stock of badges ?
Creditors for Badges 400
Profit on sale of ?
badges
Note:
1. Club badges are bought at R50 each. This price remained unchanged during
the year.
2. Club badges are sold at cost price plus 20%.
3. Four Badges were donated to visitors during the year.
QUESTIONS
3.2.1 How many new members joined the club during the year? (3)
3.2.4 What is the value of the club badges donated to visitors? (3)
3.2.5 Calculate the profit made on the sale of Club badges. (3)
3.2.6 Calculate the value of the stock of club badges on 31 October 2006 (3)
The information below was extracted from the records of Dan’s Deliveries on 30 June
2007, the end of their financial period.
REQUIRED
4.1 Prepare the Tangible/Fixed asset note to the Balance Sheet on 30 June 2007.
INFORMATION
You are provided with the following balances taken from the General Ledger on
30 June 2007.
NOTES
• A new vehicle costing R280 000 was bought on 1 January 2007. This has been
recorded.
• Equipment with a cost of R8 000 was sold for R5 500 cash. The carrying value of
this equipment on the 1st day of the financial year was R2 400. No entries were
made for this transaction which took place on 31 October 2006.
• Additional equipment costing R15 600 was purchased by cheque on 1 April 2007.
This has not been recorded.
(42)
4.2.1 Depreciation is an unusual expense in that it does not involve the outflow of
cash from a business. Give another example of a similar type of expense.
(2)
You are provided with information obtained from the financial statements of NZ Traders
The business is owned by two partners, Nkosi and Zuma.
REQUIRED:
INFORMATION
Extract from the Income Statement for the year ended 28 February 2007
with comparative figures:
2007 2006
R R
Extract from the Appropriation Statement for the year ended 28 February 2007:
Extract from the Balance Sheet on 28 February 2007, with comparative figures:
2007 2006
R R
Fixed Assets (carrying value) 381 790 337 520
Investments (9% p.a.) 140 000 30 000
Current Assets 113 560 121 050
TOTAL ASSETS 635 350 488 570
2007 2006
Gross profit on cost of sales 75,0% 65,0%
Operating expenses on sales 21,0% 21,2%
Operating profit on sales 21,8% 19,5%
Net profit on sales ? 17,2%
Current ratio ? 2,5:1
Acid-test ratio 0,6:1 0,8:1
Stock-turnover rate 6 times 4,5 times
Debtors’ 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 total capital employed 32,8% 30,5%
% return on average equity 38,0% 33,2%
% return earned by Nkosi ? 34,4%
% return earned by Zuma 28,2% 33,0%
5.2 Use the acid-test ratio to calculate the amount of trading stock on hand
on 28 February 2007. (4)
5.3 Should the partners be satisfied with the control of the operating
expenses? Briefly explain your answer. Quote ratios, percentages or
figures to support your answer. (3)
5.5 Zuma feels that Nkosi’s drawings are unreasonable. Quote figures to
support his opinion. How does this affect the business? (4)