15 March Worksheet - Cash Flow
15 March Worksheet - Cash Flow
GRADE 12
ACCOUNTING
MARKS: 100
Financial accounting
Fixed assets
Concepts
Financial accounting
Financial Statements Statement of financial position (Balance sheet)
Companies: Correct net profit after tax
REQUIRED:
1.1 Decide whether the following statements are TRUE or FALSE. Write only
the correct answer next to the question number
1.1.1 - 1.1.4 in the ANSWER BOOK. (4)
1.1.1. Tangible assets have a long life span and are used to generate
income.
1.1.2. The value of equipment will appreciate because of wear and tear.
1.1.3. The value of Land and buildings will depreciate if the property is
well maintained.
1.1.4. The purpose of the asset register is to keep track of the profit of
assets.
1.2. Calculate the amounts indicated by (i)–(iv). Show the workings. (14)
INFORMATION:
LAND AND
FIXED/TANGIBLE ASSETS VEHICLES EQUIPMENT
BUILDINGS
Movement
Additions (i) 0 0
Disposals at carrying value 0 0 (iv)
Depreciation 0 (ii)
C. Vehicles:
The business owns two vehicles. Details from the asset register is as follows:
MAHINDRA FORD
Cost 120 000 156 000
Accumulated depreciation on 1/8/2022 (112 500) (31 200)
Carrying value on 1/8/2022 7 500 124 800
D. Equipment
A photocopier was sold for cash to Kenlogic Internet Shop on 30 April 2023.
The photocopier was sold at a loss of R125 due to damage. According to the
Fixed Assets Register, the photocopier was originally purchased for R4 600.
Accumulated depreciation on this item was R3 200 on 1 August 2022.
Depreciation on equipment is written off at 20% p.a. on the diminishing
balance method.
18
REQUIRED:
2.1.1 Calculate the correct Net Profit after tax for the year ended
28 February 2023 (indicate a + for increase and a – for decrease) (10)
INFORMATION:
(i) Net profit before tax R1 000 375 was determined before the following.
(ii) On 1 December 2022 O Le Roux, a debtor, returned merchandise. A credit
note for R1 000 was issued to him. (The cost price was R 625.) No entries
were made for the return of the merchandise. These items were returned to
stock.
(iii) The auditors discovered that the profit on disposal of a vehicle R4 000, was
incorrectly recorded as a loss.
(iv) The directors are owed a further R14 000
(v) Lawrence Constructions was paid R100 000 for the construction of a
storeroom (R60 000) and repairs to paving (R40 000.) The entire amount
was debited to land and buildings.
(vi) Income tax was calculated at 30% of the net profit.
REQUIRED:
2.2.1 Prepare the note for Trade and other receivables (8)
2.2.2 Prepare the Balance Sheet on 28 February 2023. (42)
(Where notes are not required, show all workings in brackets)
INFORMATION:
R
BALANCE SHEET ACCOUNTS SECTION
Ordinary share capital ?
Retained income 1024 800
Loan from director 940 800
Fixed assets at carrying value (I March 2022) 4 327 500
Trading stock 259 200
Debtors control 210 400
Provision for bad debts (1 March 2022) 10 000
Creditors control 371 200
Bank (Dr) 1 254 440
Cash float 15 000
Fixed deposit: Allied Bank 320 000
SARS: Income tax (provisional tax payments) 380 000
B. Fixed Assets
The following was not recorded:
Forklifts that were bought for cash, R700 000.
Depreciation of R227 500
C. Fixed deposit
R120 000 of the Fixed deposit with BB Bank matures on 30 June 2023
E. Loan
• The company arranged for a loan from the director on 1 September 2021.
• The loan is to be paid in equal monthly instalments over a period of 5 years.
The company paid the first instalment on 30 September 2021.
• Interest on loan is paid monthly. The company made regular payments. Interest
is not capitalized.
F. Additional information
⚫ Increase provision for bad debts by R400.
⚫ Insurance included an annual premium of R17 280 paid for the period ended
30 June 2023.
⚫ The total of the rent income account was R406 000, which includes the rental
for March and April 2023. Rent was increased by R3 600 per month from
1 October 2022.
3. MABITA LTD.
Mabita Ltd is a company that sells stationery. As part of national youth
development, they appointed 10 youths in October 2023. One of the directors
instructed the accountant to include payments of the ten youths in the 2023
salaries expenses for the accounting period 1 January 2023 to 31 December
2023.The external auditor discovered that the costs for salaries is more in 2023
than it was budgeted for. He therefore decided to audit the Salaries and wages
costs.
REQUIRED:
3.1 Explain the role of an external auditor (2)
3.2 Explain why the external auditor would specifically audit these
expense. (4)
3.3 List TWO pieces of evidence that the auditor could use to audit
the salaries and wages costs (4)
3.4 Explain ONE effective measures that the internal audit may apply
to improve her auditing standards (2)
TOTAL :100