CONTROLLED TEST

GRADE 11

ACCOUNTING TERM 3

SEPTEMBER 2023

MARKS : 100

TIME : 1.5 Hours

This question paper consists of 09 pages (including a 1 page formula sheet)

and an answer book of 07 pages.

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INSTRUCTION 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 back of this
question paper. You may use it if necessary
4. Show ALL workings in order to earn part-marks.
5. You may use a non-programmable calculator.
6. You may use a dark pencil or black/blue ink to answer the questions
7. Where applicable ,show ALL calculations to ONE decimal point
8. Write neatly and legible.
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 Budgeting 30 27
2 Inventory Valuation 25 23
3 Cost accounting 45 40
TOTAL 100 90

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QUESTION 1 :BUDGETING[30 Marks]

CASH BUDGET
Frank’s Fruit and Vegetables Store is situated in, Kanana, Limpopo. This
business sells fresh fruits and vegetables to both businesses and households
Frank sells most of his fresh produce for cash, but he does permit some local
restaurants and holiday lodges to purchase on credit and pay within 60 days.

REQUIRED
1.1 Complete the following for October and November 2022
1.1.1 Debtors Collection schedule. (8)
1.1.2 Cash Budget for October and November 2022 (22)

INFORMATION
A. Extract from the Cash Budget for September 2022

September 2022
Receipts
Cash Sales 753 200
Cash Receipts from Debtors 295 056
Total receipts 1 048 256

Payments
Cash purchases of stock 672 500
Salary of store manager 24 000
Wages 16 640
Drawings 86 080
Sundry Expenses 20 000
Interest expenses(interest on loan) 1 100
Total Payments 820 320
Cash Surplus(Shortfall) 227 936
Bank: Opening Balance 66 000
Bank :Closing Balance 293 936

B. ADDITIONAL INFORMATION
1. Total Sales (including forecasted sales) for the period July to November 2022
July 2022 952 000
August 2022 1 016 000
September 2022 1 076 000
October 2022 1 088 000
November 2022 1 120 000

2. 70% of the total sales are for cash.

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3. Debtors pay according to the following trend:

 40% paid in the month of sale to receive a 5% discount.
 50% paid in the first month of sale following the month of sale.
 7% paid in the second month following the month of sale.
 3% irrecoverable and is written off in the third month following the
month of sale.
4. The current mark-up, of 60%, will be maintained throughout the budget
period.
5. Stock of fresh Fruit and Vegetables are purchased for cash from local farmers
in order to maintain a fixed base level of stock on hand at all times.
6. Frank’s Fruit and Vegetable Store increases the staff salaries on 1October
each year.
The business currently employs the following people:
Store Manager  5% increase on 1 October 2022
 Frank, the owner is going on holiday in
November 2022.The manager will therefore
be paid an extra R6 000 for added
responsibility during this time.
Shop Workers  The two shop workers currently work 40 hours
each per week at a rate of R52 per hour. Their
hourly rate will increase by R3.60 from 1
October 2022.
 With the owner going on holiday in November
2022, each shop worker will need to work 15
hours overtime. Overtime is paid at1.5 times
the rate of normal time.

7. Sundry expenses are expected to be R20 000 in September and thereafter to

increase by 2% per month from October 2022 onward.
8. The business currently has a loan at an interest rate of 5, 5% p.a. Frank plans
to pay R24 000 of the capital amount of this loan on 31 October 2022.
9. An old delivery vehicle with a book value of R120 000, will be sold for cash at
a profit of R30 000 during November 2022

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QUESTION 2: INVENTORY VALUATION: [25 Marks]

2.1 Explain the difference between Perpetual and periodic inventory systems.
(2)
2.2 MANDISA STORES
Mandisa Stores sells sport clothes. The periodic inventory system is in use and
the mark-up on cost is 50% on all products.

REQUIRED
2.2.1 Calculate the cost of sales for the period ending 30 June 2021 (7)
2.2.2 Calculate the gross profit for the year (4)
2.2.3 Calculate the actual mark-up percentage achieved. (4)
2.2.4 State Two reasons why the business did not achieve the intended
mark-up. (4)
2.2.5 The business regularly donates cash and trading stock to several charity
organisations. How does the business benefit from making donations?
Explain TWO ways (4)

INFORMATION

Extracted from the General Ledger on 30 June 2021(end of the financial year
Opening stock 320 000
Purchases for cash 710 000
Purchases on credit 240 000
Cash sales 1 024 500
Credit sales 850 000
Debtors allowances 42 000
Carriage on purchases 162 000
Custom duty 56 000

ADDITIONAL INFORMATION

1. The following invoice received has not yet been recorded.

INVOICE

To : Mandisa Stores Supplier: Vula Wholesalers

30 treadmills 35 300
Less 10% trade discount 3 530
31 770
Add transport costs 1 800
33 570

2. Donated a soccer kit to the local school, cost price, R2 900

3. A debtor returned goods which he had bought for R3 000(cost price R1 500)

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4. According to the stock-taking done on 30 June 2021, there was stock on hand
costing R210 000(after taking information 1,2 and 3 above into account)
5. After the stock-taking has been done, stock costing R3 400 were returned to
the supplier. A debit note had been issued.
6. The owner remembered after the stock-taking has been done that she had
taken stock of R 1400 for own use.

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QUESTION 3: COST ACCOUNTING [45 Marks]

3.1 Choose the correct term in the brackets. Write only the term next to the
question number (3.1.1 to 3.1.5) in the answer book
3.1.1 The salary of the factory manager is (direct/indirect) labour
3.1.2 Rent of the building is considered as a(fixed/variable) cost
3.1.3 Advertising is a/an (administration /selling and distribution ) cost
3.1.4 Direct material and direct labour is classified as( prime/secondary )costs
3.1.5 Carriage on raw materials purchased(decreases/increases) the cost of raw
materials (5 )

3.2 THE CLOTHING FACTORY SHOP

 Ntina Matseke is the owner of the business which produces and sells ladies
tracksuits. The information below was taken from their financial records for the
year ending 28 February 2023

REQUIRED

Complete the following ledger accounts. Close the ledger accounts

properly at the end of the year on 28 February 2023.

 Raw materials stock (09)

 Work-in-progress (09)
 Finished goods (6)
 Factory overheads (16)

INFORMATION

A.

Balances 28 February 2023 1 March 2022

Raw materials stock R251 000 R164 800
Work-in-progress 445 450 223 700
Finished goods ? 569 500
Indirect materials 7 300 9 800

B. Transaction for the financial year ended 29 February 2020

Purchased on credit: Raw materials 950 800

Purchases: Indirect materials 39 800
Carriage on purchases of raw materials paid 47 500
Advertising 29 500
Rent expense 130 000
Depreciation: Factory equipment 56 250
Delivery vehicles 49 500
Sales (profit margin of 60%) 4 071 208

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C. Additional information

1. The bookkeeper forgot to record an invoice for raw material purchased,

R300 000, 25% trade discount was received on this transaction

2. Two thirds (2/3) of the indirect materials were used in the factory

3. Salaries and wages

 Salary of the factory foreman, R216 000

 Summary of factory workers’ earnings
Deductions Employer’s Net wages
PAYE UIF Pension contributions
R140 000 R 9 600 R78 800 R97 856 R844 600
Total deductions= R228 400
NOTE: Contributions are regarded as part of factory Wages costs.
 Indirect wages
Six casual workers clean the factory at R50 an hour. They each worked
192 hours normal time. Three of them worked 40 hours of overtime at the
normal rate plus 50%

4. Rent expense includes rent for March 2023. There was no increase in the rent

during the financial year. Rent is proportionally allocated to the various

departments according to floor space occupied:

 Factory 600 :
 Administration offices 250 :
 Sales department: 150

TOTAL: 100 MARKS

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GRADE 11 ACCOUNTING FINANCIAL

INDICATOR FORMULA SHEET
Gross profit X 100 Gross profit X 100 Net profit X 100
Sales 1 Cost of sales 1 Sales 1
Operating expenses X 100
Operating profit X 100
Sales 1
Sales 1

Total earnings by partner x 100 Net profit x 100

Partner ‘s average equity 1 Average partners’ equity 1

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

(Trade and other receivables + Cash and cash equivalents) : Current liabilities

Non- current liabilities: Partners’ equity Total assets : Total liabilities

Average debtors x 365 Average creditors x 365

Credit sales 1 Credit purchases 1

Average inventories x 365 or 12 Cost of sales

Cost of sales 1 Average inventories

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