ACCOUNTING
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

INSTRUCTIONS AND INFORMATION 
Read the 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. Show ALL workings to earn part-marks.
4. You may use a non-programmable calculator.
5. You may use a dark pencil or black/blue ink to answer the questions. 
6. Where applicable, show all calculations to ONE decimal place.
7. Write neatly and legibly.
8. Use the information in the table below as a guide when answering the question  paper. Try NOT to deviate from it. 

QUESTION 2: 45 marks; 30 minutes 

QUESTION 3: 50 marks; 30 minutes 

QUESTION 4: 70 marks; 40 minutes 

QUESTION 5: 55 marks; 30 minutes 

QUESTION 6: 40 marks; 25 minutes

QUESTIONS 

QUESTION 1: INVENTORY VALUATION (40 marks; 25 minutes) 1.1 CONCEPTS 
REQUIRED: 
Indicate whether the following statements are TRUE or FALSE: 
1.1.1 When goods are sold, the cost of sales is recorded at the same time  under the perpetual stock system. (1) 
1.1.2 The specific identification method of stock valuation is based on the  assumption that certain stock is identified to be sold first. (1) 
1.1.3 Goods bought are debited to the Purchases Account under the periodic  stock system. (1) 
1.1.4 The weighted-average method of stock valuation is based on the  assumption that the value of opening and closing stock are added up,  and divided by the number of units bought. (1) 

1.2 INVENTORY VALUATION 
Zenko’s Shop sells one type of suitcase. You are provided with information for  the financial year ended on 30 April 2019.  
The business uses the FIFO method for stock valuation and the periodic stock  system. 
REQUIRED: 
1.2.1 Calculate the value of the closing stock on 30 April 2019. (8)
1.2.2 Calculate the following for the year ended 30 April 2019: 

• Cost of sales (8)
• Gross profit % (4)
• Stock holding period for 2019 in days (5) 

1.2.3 Comment on the stock holding period for 2019. Quote figures. (The stock holding period for 2018 was 182 days.) (4) 
1.2.4 In order to improve on stock losses (20 suitcases) the previous year, the owner introduced stricter control measures over stock. Comment on whether it was successful. Show calculations. (7)
INFORMATION: 
Stock records of suitcases: Date Number of units 

Purchases of suitcases: 

Return of suitcases: 

• Ten (10) suitcases purchased during February 2019 were damaged and  therefore returned to the supplier. The supplier agreed and credited the  business account with the cost price including the carriage on purchases. 

Sales 

• 640 suitcases were sold during the year for R576 000.  

QUESTION 2: RECONCILIATIONS (45 marks; 30 minutes)
2.1 BANK RECONCILIATION  
You are provided with information from the books of Qumbu Traders. 
REQUIRED: 
2.1.1 Calculate the correct balance of the Bank Account on 31 January 2019. (15)
2.1.2 Prepare the Bank Reconciliation Statement on 31 January 2019. (11) 
2.1.3 An internal investigation revealed that cash deposits are not made immediately.  Quote and explain TWO examples which led to this finding. (4) 
2.1.4 Provide TWO internal control measures that the business can use to  prevent this from happening again. (4) 

INFORMATION: 
A. Extract from the Bank Reconciliation Statement on 31 December 2018: 

• Outstanding deposits
  15 November 2018             R 4 100
  31 December 2018             R 3 600
• Cheques not yet presented for payment:
  No. 673              R 1 080
  No. 681              R 2 860
  No. 707              R 3 900
  No. 723              R 1 000
• Cheque no. 673 was issued on 21 July 2018 as a donation.
• Cheques no. 681 and no. 707 were reflected on the Bank Statement for  January 2019. 

B. The Bank Account in the General Ledger on 31 December 2018 reflected a  favourable balance of R24 740. 
C. Provisional totals for January 2019:

D. Items reflected in the Journals for January 2019, but not on the Bank  Statement: 

• The following cheques: 
  • No. 782 for R5 400 
  • No. 805 for R1 560, dated 8 February 2019 
  • No. 808 for R5 400 

NOTE: Cheque no. 782, dated 21 January 2019, issued for  stationery was lost. Payment of this cheque was stopped.  The cheque was replaced by cheque No. 808 on 30 January 2019. 

•  Cheque no. 790 was issued for trading stock purchased. The amount was  recorded as R1 850 in the Cash Journal, but the correct amount of  R1 580 was recorded in the Bank Statement. 
• A deposit made by Qumbu Traders on 31 January 2019, R6 800.

E Items on the January Bank statement, but not in the Cash journals: 

• A deposit of R3 600 on 12 January 2019 
• Bank charges, R1 560
  NOTE: Bank charges were overcharged by R160.
  The bank will rectify the error in the next bank statement.
• Interest on credit balance, R500.
• A dishonoured cheque originally received from a debtor, R3 500. 
• A direct deposit by a debtor, in settlement of his account of R1 500 after  10% discount was allowed.
• A debit order for instalment of the owner’s personal insurance,  R2 100. 

2.2 DEBTOR’S RECONCILIATION 
REQUIRED: 
Draw up a reconciled Debtor’s List on 31 March 2019: (11)
INFORMATION: 
The following errors were found: 

• An allowance of R300 for damaged goods returned by H. James was posted  to the account of H. Jameson. 
• An invoice issued to A. Dyantyi for R1 200 was entered correctly in the journal,  but posted to her account as R2 100. 
• R20 interest charge on the overdue account of E. Rasmeni, was posted to  the wrong side of his account. 

QUESTION 3: INCOME STATEMENT (50 marks; 30 minutes) 
You are provided with information extracted from the records of BigSave Ltd,  on 30 April 2019. 
REQUIRED: 
Prepare the Income Statement for the year ending 30 April 2019. (50)
INFORMATION: 
A. EXTRACT FROM THE PRE-ADJUSTMENT TRIAL BALANCE ON  30 APRIL 2019 

B. ADJUSTMENTS AND ADDITIONAL INFORMATION: 

1. Goods are sold at a mark-up of 40% on cost price. 
2.  An allowance for stock totally damaged was granted by the business. The  value of the stock according to the original invoice received, R12 000. 
3. On 30 April 2019, R2 880 was received from A. Kwaza, whose account had  previously been written off as irrecoverable. The amount was entered as  Bad debts in the CRJ. 
4. The provision for bad debts must be adjusted to 5% of outstanding debts. 
5. The company has 3 directors, each earning R44 600 per month. The third  director was only appointed on 1 November 2018.
6. The following were reflected during a physical stock count on  30 April 2019: 
   • Trading stock, R1 847 800 
   • Consumable stores, R600
7. Depreciation for the year amounted to R243 840.
8. An amount of R5 600 was paid too much in auditing fees. 
9. An employee was omitted from the salaries journal. He has not been paid.  His details are as follows:

   Deductions	Employer’s contribution	Net salary
   R5 250	R4 410	15 750

10. The tenant is two months’ arrears with the rent. The monthly rent was  decreased by R1 000 on 1 January 2019.
11. Net profit after tax amounts to 5% on sales.
12. Income tax is calculated at 28% of the net profit. 

QUESTION 4: COMPANY FINANCIAL STATEMENTS (70 marks; 40 minutes)
4.1 BALANCE SHEET AND NOTES 
Refer to the information from the records of RADABA LTD for the financial year  ended 28 February 2019. 
REQUIRED: 
4.1.1 Prepare the following notes to the Balance Sheet: 

• Ordinary share capital (9)
• Retained income (11)
• Trade and other receivables (7) 

4.1.2 Complete the Statement of Financial Position (Balance Sheet) on  28 February 2019. Where notes are not required, show ALL workings  in brackets. (26) 
INFORMATION: 
A. Amounts extracted from the financial records of RADABA LTD: 

B. Share capital 

• The business has an authorised share capital of 800 000 shares. 
• On 1 April 2018, the directors decided to repurchase shares at a total  cost of R1 170 000. The shares were bought at R1,70 above the  average price of R10 per share. 
•  further 120 000 shares were issued on 31 October 2018 at R13 per  share.

C. On 27 February 2019, a final dividend of 30 cents per share was declared.   Shares repurchased do not qualify for final dividends. 
D. A certain portion of the fixed deposit matures in the next 3 months, after  which the remaining balance will be R800 000. 
E. Interest capitalised, R122 100, is reflected on the loan statement  received. This was not recorded in the books. The business expects  to decrease the loan by R169 200 in the next financial year. 
F. After all the above adjustments were taken into account the net profit before tax was calculated to be R1 741 500 and the income tax  payable for the year R522 450. 

4.2 ANALYSIS AND INTERPRETATION OF FINANCIAL INDICATORS 
REQUIRED: 
Use the financial indicators of QUICKFIX LTD given below, to answer the  following questions. 
4.2.1 The company issued additional shares at R9. In your opinion, do you  think the existing shareholders would be happy with the issue price?  Quote ONE financial indicator with actual figure/percentage/ratio to  support your statement. (3) 
4.2.2 The directors feel that the shareholders should be satisfied with the  performance of the company. Explain and quote TWO financial indicators  with actual figures/ratios/percentages to support their opinion. (6) 
4.2.3 The directors decided to increase the loan during the current financial  year. Quote TWO financial indicators (actual figures/ratios/percentages)  that are relevant to their decision. Explain why this was a good decision,  or not. (8) The following financial indicators were calculated for the past two years: 

QUESTION 5: AUDIT REPORT (55 marks; 30 minutes)
5.1 The information relates to Liam Ltd for the financial year ended 30 June 2018
REQUIRED: 
5.1.1 Prepare the note for CASH GENERATED FROM OPERATIONS. (19)
5.1.2 Complete the cash flow statement. (23)
INFORMATION: 
A. Information from the Statement of comprehensive income 
(Income statement) for the year ended 30 June 2018. 

B. Information from the Statement of financial position (Balance sheet) 

1. Trade and other receivables 

2. Trade and other payables

C. Share capital. 

• Received R440 000 for 40 000 additional shares issued on  

31 October 2017.  

• On 30 May 2018 R250 000 was paid for the re-purchase of shares. 

D. Dividends 

•  An interim dividend of R77 000 was paid on 5 January 2018. 
• A final dividend was declared on 29 June 2018. 

E. Fixed Assets 

• The following changes to buildings were made during  the year:
  Extensions of R566 600
  Repairs to the old building, R150 000
• Old equipment, carrying value R35 250, was sold at a loss  of R5 250. 

5.2 AUDIT REPORT 
The following is an extract from the audit report issued by the external auditors of  VOVO Ltd. 
REQUIRED: 
5.2.1 What type of report did VOVO Ltd receive? Explain. (3) 
5.2.2 The Companies Act requires public companies to be audited.  Provide a reason for this. (2) 
5.2.3 Explain ONE major consequence for Makaya&Ntini should they be  negligent in performing their duties. (2) 
5.2.4 Name ONE other party, other than the shareholders, that would be  interested in this audit opinion and give a reason for their interest. (2) 
5.2.5 Briefly indicate how this audit report would possibly affect the shares of  VOVO Ltd on the Johannesburg Securities Exchange (JSE).  Mention TWO points. (4)
INFORMATION: 
Audit opinion – to the shareholders 

QUESTION 6: RECONCILIATION AND VAT (40 marks; 25 minutes)
6.1 FIXED ASSETS 
You are provided with the incomplete fixed asset note of Komani Ltd.  
The financial year ended 31 December 2018. 
REQUIRED: 
6.1.1 Calculate the missing figures indicated by A to E in the incomplete Fixed  Asset Note. (7) 
6.1.2 Prepare the Asset Disposal Account for the office furniture sold. (10) 
6.1.3 Comment on the sale of land to the husband of the CEO. 
See information B. (2)

INFORMATION: 
A. INCOMPLETE FIXED ASSET NOTE 

B. Land not used was sold for cash to a local business man for R200 000.  The business belongs to the husband of the company’s CEO. 
C. Old office furniture was offered for sale (see fixed asset register below).  The local recreational club offered to pay R10 000 in cash. The offer was  accepted on 30 September 2018 and the rest was regarded as a donation  by the business. 

D. A new vehicle was purchased on 31 December 2018 for R300 000 less  10% trading discount. 

• Depreciation on vehicles is written off at 15% p.a. on the diminishing   balance method. 

6.2 VAT CALCULATIONS 
The information below relates to Nobs Traders for the VAT period ended  28 February 2019.  
REQUIRED: 
Calculate the amount of VAT payable to/receivable from SARS on 28 February  2019. Indicate whether the amount is payable or receivable. (13) 
INFORMATION: 
A. Amount owed to SARS on 1 February 2019, R49 800. 
B. Transactions for the period ended 28 February 2019: 

6.3 VAT AND ETHICS 
REQUIRED: 
Read the given information and answer the questions that follow. 
6.3.1 Why should Rantsi Traders produce a proof of sales? (2)
6.3.2 How would this affect the VAT returns of Rantsi Traders? (2) 
6.3.3 Advise Rantsi traders of the implications, should he agree to this  request. Mention TWO points. (4) 

INFORMATION: 
A customer requested Rantsi Traders to sell goods to him exclusive of VAT. In  exchange the customer will pay cash for all his purchases. Rantsi Traders stated   that he would then not be able to produce the source document for these sales. 

TOTAL: 300