isIqDCI4G6Zl2ruYMjkt9hwR3EXpNnMkeQIDh0Do
Page 1 of 8 GRADE 10 ACCOUNTING MID-YEAR EXAMINATION JUNE 2020 TOTAL: 200 DURATION: 2hrs COPYRIGHTS RESERVED Page 2 of 8 INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. A special ANSWER BOOK is provided in which to answer ALL the questions. 2. Show ALL workings to earn part-marks. 3. You may use a non-programmable calculator. 4. You may use a dark pencil or black / blue ink to answer the questions. 5. Where applicable, show all calculations to ONE decimal point. 6. A breakdown of the questions is provided. You must attempt to comply with the suggested time allocation for each question QUESTION TOPIC MARKS TIME 1 Accounting concepts, GAAP, Internal control, Accounting equation 58 35 minutes 2 Credit Transactions – Debtors & Creditors 40 24 minutes 3 VAT 20 12 minutes 4 Salaries and Wages 47 28 minutes 5 Final Accounts 35 21 minutes TOTAL 200 120 minutes COPYRIGHTS RESERVED Page 3 of 8 QUESTION 1 1.1 Match the description in COLUMN A to the items provided in COLUMN B. Write only the letter A – E next to the question number 1.1.1 – 1.1.5. (10) Column A Column B 1.1.1 Current Assets A. Amounts paid in advance to a vendor or creditor for goods or services 1.1.2 Trial Balance B. Used as evidence that a particular business transaction occurred 1.1.3 Going concern principle C. Prepared at the end of an accounting period by adding up all the balances in your general ledger 1.1.4 Source documents D. The collection of all balance sheet, income and expense accounts 1.1.5 Prepaid expenses E. The financial statements of a business should be prepared based on the assumption that the business will continue to operate for the foreseeable future. F. Assets that are in the form of cash or will generally be converted to cash or used up within one year H. Assets that have a useful life of more than one year. 1.2 Calculate the missing amounts denoted by (a) to (f). (16) Cost Price % Mark-up Gross Profit Selling Price 1.2.1 R12 600 50% (a) (b) 1.2.2 (c) 25% (d) R22 200 1.2.3 R7500 (f) (e) R13 125 1.3 The following transactions relate to New Image Hair Studio for January 2019. The business also sell hair-care products to customers using a profit mark-up of 40% on cost. REQUIRED: Analyse the following transactions according to the headings on the Answer Sheet. Assume that the Bank balance is favourable for ALL transactions Refer to the example provided. Example: The owner, M. Thomas, increased her capital contribution by depositing a cheque for R80 000 to the business bank account. (32) COPYRIGHTS RESERVED Page 4 of 8 1.3.1 Purchased an office desk from Joshua Door and paid by cheque; R8 500. 1.3.2 Fees for services rendered to customers for the week amounted to R23 500. 1.3.3 Issued a cheque to Telkom to pay the December 2018 telephone account, R4 220. 1.3.4 Took delivery of hair-care stock purchased from Hands Down. Issued a cheque for R7 300. 1.3.5 Cash sales of hair-care products, R9 520. 1.3.6 Received monthly rent from the tenant, R6 000. 1.3.7 Received a loan from FNB, R50 000 at 12,5% p.a. interest. [58] QUESTION 2 The following TWO accounts of Thorn Electrical Distributors were drawn up by an inexperienced accountant on 28 February 2019. 2.1 Take the two accounts as well as the additional information into consideration and draw up the correct accounts. (28) 2.2 Calculate the correct total for the Debtors and Creditors Lists. (12) Dr DEBTORS CONTROL Cr 2019 Feb 1 Balance b/d 62 300 2019 Feb 28 Credit Sales DJ 142 400 28 Creditors allowances CAJ 4 350 Bank CPJ 830 Bank CRJ 108 430 Cash Sales CRJ 76 400 Bad Debts GJ 1 000 Balance c/f 110 150 253 380 253 380 Mar 1 Balance b/d 110 150 Dr CREDITORS CONTROL Cr 2019 Feb 28 Purchases CJ 164 800 2019 Feb 1 Balance b/d 87 400 Returns DAJ 7 800 Discount CRJ 4 230 Balance c/f 88 280 Bank CPJ 153 650 253 080 253 080 Mar 1 Balance b/d 88 280 COPYRIGHTS RESERVED Page 5 of 8 Additional Information In addition to the errors the accountant made in the control accounts, an investigation revealed the following: • The total of the Debtors List on 28 February 2019 according to the Debtors Ledger was R89 540 • The total of the Creditors List on 28 February 2019 according to the Creditors Ledger was R93 610 • An amount of R 1721 in the Creditors Journal was incorrectly posted to the account of Malan Distributors as R1 271 • The Creditors Journal was overcast by R140 • A credit note for R300 was issued to J Heyse in respect of merchandise returned by her, but no entry has been made. • The total debtors’ receipts of R108 430 included an amount of R320 recovered from a debtor M Wright, whose account has been written off in the previous financial year. • Debtor K Wells still has to be charged R53 interest on his overdue account. • An entry in respect of sales returns of R460 was correctly entered in the Debtors Allowances Journal but posted to the debit side of debtor J Angel’s account by mistake. [40] QUESTION 3 3.1 Choose the correct answer and write down only the letter (A – C) next to the question number (3.1.1 – 3.1.5) in the answer book 3.1.1 On what date is VAT payable to SARS? (1) A 15th of the month B 25th of the month C Last day of the month 3.1.2 What must a business’s turnover be before it has to register as a VAT vendor? (1) A R 300 000 p.a B R 1 000 000 p.a C R 3 000 000 p.a 3.1.3 How long must a business keep its VAT records for? (1) A 3 years B 10 years C 5 years 3.1.4 On what date was the tax rate changed (1) A 1 March 2018 B 1 April 2018 C 31 March 2018 3.1.5 VAT increases the price of the product to which party in the transaction? (1) A The factory B The retailer C The consumer COPYRIGHTS RESERVED Page 6 of 8 3.2 What is the current rate of VAT in South Africa? (1) 3.3 Explain the difference between exempt items and zero-rated items, and give an example of each. (6) 3.4 The following information with regard to VAT was provided for November 2018. Total Purchases (VAT inclusive) R430 920 Total Sales (VAT inclusive) R718 200 3.4.1 Calculate the input tax for November 2018 (2) 3.4.2 Calculate the output tax for November 2018 (2) 3.4.3 Calculate the amount payable to SARS for November 2018 (2) 3.4.4 The selling price of a product is R155. What should the market price be if the seller is a registered VAT vendor? (2) [20] QUESTION 4 4.1 Study the totals which appear in the Wages Journal of Sportsmans Den for the week ended 26 April 2019 and then answer the questions that follow. All employees are paid at the same rates, being R12 per hour for normal time and R18 per hour for overtime Total normal time hours 2700 hrs Total overtime hours ? Gross wages R43 848 Total deductions R? Medical aid deductions R2 220 PAYE deductions R11 354 UIF deductions R438 Medical aid contributions R4 440 UIF contributions R438 4.1.1 How much cash must be withdrawn in order to pay the employees? (4) 4.1.2 Briefly explain the difference between deductions and contributions. (2) 4.1.3 Calculate the total number of overtime hours worked during the week. (5) COPYRIGHTS RESERVED Page 7 of 8 4.1.4 The Medical Aid details have remained the same for all four weeks during April. Calcualte the amount which must be paid to the Medical Aid Fund by Sportmans Den at the end of April. (3) 4.1.5 To which ledger account must the R11 354 be posted? Must this account be debited or credited? (2) 4.1.6 There are approximately 40 employees in total. Briefly explain the role played by the clock-card system in ensuring that Sportsmans Den do not pay any employees for work that was not done (2) [18] 4.2 The following information applies to the Salaries Journal of Sportmans Den for the month ended 28 February 2019. Sportmans Den employs three salary earners J Backes, K Hewitt and L Waldron. They earn R55 200, R62 400 and R76 800 per annum respectively. The following deductions must be made: • Pension is 3% of gross salary UIF is R20 per month. • Medical Aid is R50 per family member. Backes is married with no children. Hewitt is married with two children, Waldron is divorced with two children. • Backes & Hewitt are taxed at 30% and Waldron at 36% on their gross salaries. • Sportmans Den contributes to the UIF on a rand-for-rand-basis, as well as 50c for every rand to the pension fund. Required Complete the Salaries Journal of Sportmans Den for the month ended 28 February 2019. Cheques 641 – 643 were issued. (29) [47] COPYRIGHTS RESERVED Page 8 of 8 QUESTION 5 The Trail Balance of Kadies Bakery Supplies on 30 June 2018 is given below. 5.1 Make journal entries of the closing transfers. (30) 5.2 Draw up the post-closing Trial Balance on 30 June 2018. (5) [35] KADIES BAKERY SUPPLIES TRIAL BALANCE ON 30 JUNE 2018 Balance Sheet Section Fol Debit Credit Capital B1 200 840 Drawings B2 10 520 Land & Buildings B3 200 000