1

GAUTENG PROVINCE REVISION PACK P2 2024

BANK RECONCILIATION, DEBTORS AGE ANALYSIS, CREDITOR’S RECONCILIATION AND VAT

JUNE 2023 Supplementary NSC

QUESTION 1: BANK RECONCILIATION (30 marks; 25 minutes)

1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true'
or 'false' next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK.

1.1.1 A credit balance on the Bank Statement means that the business has a
positive balance in the bank.

1.1.2 A debit card may be used to withdraw cash from an ATM.

1.1.3 A bank overdraft is a short-term loan that is transferred into the business
current bank account. (3)
1.2 VIOLET STORES
The information was extracted from the records of the business for April 2023.
• Violet uses the official Bank Statement which is available on the 25th of each
month to complete the monthly reconciliation process.
• She also uses her EFT transaction records (renumbered) to complete the
Cash Payments Journal.

REQUIRED:
1.2.1 Update the totals for the Cash Receipts Journal and Cash Payments
Journal for April 2023. Use the table provided in the ANSWER BOOK. (10)
1.2.2 Calculate the correct Bank Account balance on 30 April 2023. (4)
1.2.3 Prepare the Bank Reconciliation Statement on 30 April 2023. (9)
1.2.4 Violet noticed problems with the depositing of cash. Explain TWO
measures that she can use to address these problems. (4)
INFORMATION:

A. Extract from the Bank Reconciliation Statement on 31 March 2023:

Favourable balance as per Bank Statement R12 200
Deposits not on Statement: 18 March 2023 23 600
28 March 2023 37 200
Outstanding EFTs: EFT 768 5 480
EFT 769 17 800
Favourable balance as per bank account 49 720

• The outstanding deposit on 18 March 2023 appeared on the April 2023

Bank Statement.
• The deposit on 28 March 2023 appeared as R22 200. An investigation
revealed that the cashier has disappeared with the outstanding amount. It
was decided to write off the outstanding amount.
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• Both the EFTs were on the April Statement, but EFT 768 appeared with
the correct amount of R4 580.

B. The provisional totals in the Cash Journals before receiving the Bank
Statement:
Cash Receipts Journal: R115 600 Cash Payments Journal: R217 800

C. Information on the April 2023 Bank Statement

None of these items appeared in the April Cash Journals:
Debit order: Brylet Municipality R2 880
Cash handling fees R220
Deposit: Y Marigold R8 400
Deposit: Bentley Microloans R65 000
Cash withdrawal R740
Investment matured R18 300
EFT transaction fees R360
EFT transaction fees R360

D. Additional Information:
• The debit order to Brylet Municipality was for water and electricity.
• Y Marigold, the tenant, deposited the monthly rent.
• The deposit from Bentley Microloans did not relate to the business. The
bank was informed of this error.
• The cash withdrawal of R740 was for fuel for the owner's vehicle.
• The EFT transaction fees were duplicated on the Bank Statement in error.

E. The Cash Journals reflected the following entries that did not appear on
the April 2023 Bank Statement:
• Deposit of R22 500 on 30 April 2023
• EFT 883 for R9 520 for stationery purchased
• EFT 884 for R12 530 for repairs to the buildings

F. Bank Statement balance on 30 April 2023: R?

30
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QUESTION 1

1.1
1.1.1
1.1.2
1.1.3
3
1.2 VIOLET STORES

1.2.1 UPDATE THE CASH JOURNALS FOR 30 APRIL 2023

CASH RECEIPTS JOURNAL CASH PAYMENTS JOURNAL
Amount Amount
Total 115 600 Total 217 800

10

1.2.2 Calculate the correct Bank Account balance on 30 April 2023.

WORKINGS ANSWER

1.2.3 BANK RECONCILIATION STATEMENT ON 30 APRIL 2023

9
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1.2.4 Violet noticed problems with the depositing of cash. Explain TWO
measures that she can use to address these problems.

FREE STATE PRELIM 2023 BANK RECON AND DEBTOR’S AGE ANALYSIS
QUESTION 1: RECONCILIATIONS AND AGE ANALYSIS (40 marks; 35 minutes)

1.1 Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false'
next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK.

1.1.1 A Bank Reconciliation Statement should be prepared every month to assist in

maintaining internal control of the cash of the business.
1.1.2 Credit card sales are regarded as cash transactions.

1.1.3 Debit interest on the bank statement must be recorded in the Cash Payments
Journal as bank charges. (3)

1.2 BANK RECONCILIATION

The information relates to CR Stores for August 2023. The official bank statement from
TOPS Bank is closed off and published on the 27th of each month.
REQUIRED:

1.2.1 Use the table provided in the ANSWER BOOK to calculate the final totals of
Cash Journals on 31 August 2023. Calculate the Bank Account balance on 31
August 2023. (13)
1.2.2 Prepare a Bank Reconciliation Statement on 31 August 2023. (6)
1.2.3 The levy on credit card sales is 5% of the respective credit card sales amount.
Calculate the total credit card sales for the month. (2)
1.2.4 The owner noted the warning on the bank's website that account holders should
be more vigilant about using banking applications (software) due to the increase
in hacking. (Process of gaining unauthorised access to confidential information
to transfer money.)
Provide TWO suggestions on how account holders can protect themselves
against this crime. (4)
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INFORMATION:

A. The Bank Reconciliation Statement on 31 July 2023:

Unfavourable balance per bank statement R 35 380
Outstanding deposit (29 July 2023) 13 700
Outstanding EFTs: No.1243 2 840
No.1244 4 895
Balance per bank account (overdraft) 29 415

Note: EFT 1243 in favour of a creditor, dated 30 July 2023, appeared on the
August bank statement with the correct amount of R2 480.
B. The provisional totals in the cash journals before comparing them against the
August bank statement were:
• CRJ – R365 760
• CPJ – R319 790

C. Items included in the August 2023 bank statement but not in the August
Cash Journals:
• Outstanding deposit of R13 700 dated 29 July 2023.
• EFT 1244 for R4 895
• Direct deposit of R5 780 by a debtor, in settlement of account of R6 000
• Interest on overdraft R636
• Service fees R367
• Credit card levies R1 438
• Credit card sales, R7 230
• Debit order for Insurance, R5 909
• Cash withdrawal using the debit card of the business, R3 150 .
• A transfer from Pet Stores of R4 500 appeared in the bank statement, but
the bank has informed CR Stores that this is an error as the amount was
incorrectly transferred to CR Stores. The bank will reverse this entry on
1 September 2023.

D. Items that only appeared in the cash journals for August 2023:
• Deposit on 30 August 2023 for R17 900
• EFT No. 1280 for R11 540

E. The closing balance on the bank statement was R?

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1.3 GRASSY TRADERS
You are provided with information concerning internal control over the debtors of
Grassy Traders. Study the given account of Thandi Moi in the Debtors' Ledger of
Grassy Traders:
REQUIRED:
1.3.1 To maintain internal control over the debtors, it is important that the
accountant checks at the end of the month that the balance of the Debtors'
control account and the total of the Debtors' List are equal.
• Explain why the Debtors' control account balance should agree with
the Debtors' List total. (2)

• Explain TWO processes the bookkeeper should follow if he discovers

a difference between the Debtor's control account balance and the
Debtors' List total. (4)

1.3.2 Identify THREE internal control problems relating to the management of the
account of debtor Thandi Moi. Quote figures for each problem.
(6)

Grassy Traders
Statement no: 2850 Statement date: 28 February 2023
To: Thandi Moi Credit limit: R60 000
Date Transactions Debit Credit Balance
2022
1 Balance 15 700
Nov
5 EFT 14 130 1 570
Discount 1 570 NIL
10 Invoice 473 16 680 16 680
Dec 2 Invoice 491 12 560 29 240
3 Credit note 52 1 230 28 010
2023
4 Invoice 526 9 780 37 790
Jan
31 Delivery charges 118 37 908
Feb 19 Invoice 576 15 620 53 528
28 Delivery charges 152 53 680
Terms: • 5% discount if paid within 30 days of the statement date.
• Debt must be fully paid within 60 days of the statement date.
• Interest is charged at 2% per month on balances 90 days overdue.
90 Days 60 Days 30 Days Current Amount owing
Age analysis:
16 680 11 330 9 898 15 772 53 680

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QUESTION 1

1.1 Indicate whether the statements are TRUE or FALSE. Write only
'true' or 'false' next to the question numbers (1.1.1 to 1.1.3) in the
ANSWER BOOK.
1.1.1
1.1.2
1.1.3
3

1.2.1 Calculate the correct totals of the Cash Journals in order to

determine the Bank account in the ledger on 31 August 2023.
CASH RECEIPTS JOURNAL CASH PAYMENT JOURNAL
365 760 319 790

Bank balance:

13

1.2.2 Prepare the Bank Reconciliation Statement on 31 August 2023.

Debit Credit

6
1.2.3 The levy on credit card sales is 5% of the respective credit card
sales amount. Calculate the total credit card sales for the month.

2
 8

1.2.4 Provide TWO suggestions on how account holders can protect

themselves against this crime of hacking.

1.3 DEBTORS AGE ANALYSIS AND INTERNAL CONTROL

1.3.1 Explain why the Debtors' control account balance should agree with the
Debtors' List total.

2
Explain TWO processes the bookkeeper should follow if he discovers a
difference between the Debtors' control account balance and the Debtors' List
total.

1.3.2 Identify THREE internal control problems relating to the management of the
account of debtor Thandi Moi. Quote figures for each problem.

TOTAL MARKS

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EASTERN CAPE PRELIM 2023 BANK, CREDITOR’S RECONCILIATION AND VAT
QUESTION 1: RECONCILIATIONS (35 marks, 30 minutes)
1.1 CREDITORS' RECONCILIATION
Candy Stores buys goods on credit from Awesome Suppliers.
REQUIRED:
Use the table provided to indicate the changes that must be made:
• In the Creditors' Ledger Account in the books of Candy Stores
• In the Creditors' Reconciliation Statement on 28 February 2023.
Show a ‘+’ for increases and a ‘–’ for decreases next to each amount. (10)
INFORMATION:
The balance on the statement of account received from Awesome Suppliers did
not correspond to the balance of their account in the Creditors Ledger.
A. Balance of Awesome Suppliers in the Creditors Ledger: R52 900.
B. Statement of account received from Awesome Suppliers:
AWESOME SUPPLIERS No. 2169
205 Pineridge Crescent
Gqeberha 5820
Debtor: Candy Stores 25 February 2023
DATE DETAILS DEBIT CREDIT BALANCE
Jan. 26 Balance 45 300
28 Receipt 110 12 000 33 300
Feb. 01 Invoice A12 14 600 47 900
03 Credit Note 34 800 48 700
10 Receipt 0076 12 000 36 700
Discount allowed 600 36 100
18 Invoice 588 16 340 52 440
24 Invoice 1132 54 820 107 260
25 Delivery 1 540 108 800

C. An investigation revealed the following errors and omissions:

(i) Invoice A12 was incorrectly recorded as R16 400 in the creditor’s
ledger account. The amount on the statement is correct.
(ii) Credit note 34 was for damaged goods returned on 02 February.
(iii) Candy Stores recorded the discount as R1 200. Awesome
Suppliers indicated that the business was only entitled to R600, as
reflected on the statement.
(iv) Awesome Suppliers granted a 5% trade discount on Invoice 588.
Candy Stores did not take this into account when posting to the
Creditors Ledger.
(v) Invoice 1132 on the statement was for goods that Awesome
Suppliers sold to Sweets Galore.
(vi) Awesome Suppliers charges a delivery fee to all its customers.
This was not recorded in the creditor’s ledger account.
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1.2 BANK RECONCILIATION

The information appeared in the books of Donald Traders for May 2023.
REQUIRED:
1.2.1 Calculate the correct bank account balance by completing the table
provided in the Answer Book. (12)
1.2.2 Prepare the Bank Reconciliation Statement on 31 May 2023. (7)
1.2.3 Provide ONE suggestion on how the problem of counterfeit (fake) notes
can be prevented. (2)
1.2.4 Donald was concerned about the outstanding deposits. Provide TWO
internal control measures that he can implement to address this concern. (4)
INFORMATION:
A. Extract: Bank Reconciliation Statement on 30 April 2023
Deposit not yet recorded: 18 April 2023 R 24 300
27 April 2023 7 100
EFT not on statement: No. 245 11 300
No. 246 6 750
Favourable balance as per bank account 8 800

Note:
• The deposit on 18 April 2023 and EFT No. 245 appeared on the May
bank statement with the correct amounts reflected above.
• The deposit on 27 April appeared on the statement as R5 000 due to
counterfeit notes being included in the deposit. This amount must be
written off as the money will not be recovered.
• EFT 246 was on the May statement with the correct amount of R6 250.
B. Provisional totals from the Cash Journals on 31 May 2023:
Cash Receipts Journal R76 270 Cash Payments Journal R88 530
C. Information on the bank statement not in the May Cash Journals:
Bank charges R 235
Debit order for the monthly insurance 1 140
Direct deposit by the tenant for rent 4 600
Deposit by debtor in settlement of account of R7 500. 7 030
Deposit by Uzu Technical College. 15 000
this is an error on the statement as the business does not deal
with this college. This will be rectified on the next statement.
D. Information in the May Cash Journals not on the statement:
Outstanding deposits: 19 May 2023, R11 400
26 May 2023, R10 800
Outstanding EFT No. 658 R 6 900
E. The balance as per statement was R ?.
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EASTERN CAPE PRELIM 2023 QUESTION 3: VALUE ADDED TAX (VAT)

3.3 The information relates to Big Stores for the VAT period ended 30 April 2023.
The standard VAT rate is 15%.
REQUIRED:
3.3.1 Taking into account the errors and omissions, calculate the VAT amount
that is payable to SARS. (10)
3.3.2 The internal auditor discovered that the owner, Benjamin, used the VAT
collected from customers to pay salaries and bonuses and was not
paying the full amount due to SARS on the deadline dates.
Offer ONE point of advice to Benjamin and an explanation or reason to
support the advice. (2)
INFORMATION:
A. Amount due to SARS on 1 April 2023 was R12 750.
B. Amounts from the journals on 30 April 2023:
AMOUNT VAT
INCLUDING VAT AMOUNT
Total sales R 486 450 R 63 450
Credit purchases of stock 167 900 21 900
C. Errors and omissions noted:
• Stock taken by the owner, cost price R4 300 (excluding VAT), was
not yet recorded.
• Certain goods with a selling price of R25 000 (excluding VAT) was
included in the sales amount. These goods should have been
recorded as zero-rated items.
• VAT on discounts granted to debtors was not recorded. The total
discounts allowed amounted to R14 720.
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QUESTION 1
1.1 CREDITORS RECONCILIATION

CREDITORS’ LEDGER STATEMENT OF

ACCOUNT ACCOUNT
Balance b/f 52 900 108 800
(i)
(ii)
(iii)
(iv)
(v)
(vi)
10

1.2 BANK RECONCILIATION

1.2.1
CASH RECEIPTS CASH PAYMENTS
76 270 88 530

Bank Account balance:

12

1.2.2 BANK RECONCILIATION STATEMENT ON 31 MAY 2023

DEBIT CREDIT

7
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1.2.3 Provide ONE suggestion on how the problem of counterfeit (fake) notes
can be prevented.

1.2.4 Donald was concerned about the outstanding deposits. Provide TWO
internal control measures that he can implement to address this
concern.

POINT 1

POINT 2
4

QUESTION 3: VAT

3.3.1 Calculate the amount payable to SARS in respect of VAT for the two-
month VAT period ended 30 June 2022.
WORKINGS ANSWER

10

3.3.2 Offer ONE point of advice to Benjamin and an explanation or reason to

support the advice.
ADVICE REASON

2
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LIMPOPO PRELIM 2023: QUESTION 3 VAT
3.1 VAT
Shiny Tiles is a registered VAT vendor. The standard VAT rate of 15% is
applicable where necessary. The information relates to the VAT period ended 31
July 2023.

REQUIRED:

3.1.1 Calculate the VAT amount payable to / receivable from SARS. (9)

3.1.2 The internal auditor discovered a VAT practice used by the business
whereby credit sales transactions for R987 000 were not recorded in the
June journals. The owner explained that this was done to prevent cash
flow problems.
Explain TWO points that the internal auditor should say to the owner regarding
this practice. (4)

INFORMATION:

• On 30 June 2023, the end of the first month of the bi-monthly schedule,
the balance in the VAT account, owed to SARS is R2 500.

VAT VAT
Details of transactions EXCLUSIVE VAT INCLUSIVE
Invoices issued to credit sales
R1 415 880
customers
Invoices received from
R952 000 R142 800
suppliers
Credit notes received from
R9 240
suppliers
Discount allowed to debtors
for early payments of their R5 520
accounts
Debtors’ accounts written off
R15 600 R17 940
as bad debts
Trading stock taken by owner
R252
for personal use
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3.1 VAT 3.3.1

Calculate the VAT amount payable/receivable to SARS.

3.3.2
Explain TWO points that the internal auditor should say to the owner
regarding this practice.

NOVEMBER 2022 NSC VAT

QUESTION 2: VAT AND INVENTORY VALUATION (45 marks; 35 minutes)
2.1 VAT
The information relates to Nomhle Traders. The business is registered for VAT.
The standard VAT rate is 15%. Nomhle also sells zero-rated goods.
REQUIRED:
Calculate the VAT amount that must be paid to SARS for the VAT period ended
31 May 2022. (9)
INFORMATION:
A. Harry, the clerk, calculated the VAT amount due to SARS as R55 785.

However, he did not take the following into account:

(i) VAT on goods returned to suppliers R5 070

(ii) VAT on expenses paid R6 240
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(iii) VAT on goods taken by Nomhle for personal use R5 400

B. VAT on discount allowed must also be taken into account. The total
discount allowed amounted to R18 860.
C. VAT on sales was incorrectly recorded. Certain goods with a selling price
of R31 200 (excluding VAT) should have been recorded as
zero-rated items.
QUESTION 2

2.1 VAT

Calculate the VAT amount that must be paid to SARS for the VAT period
ended 31 May 2022.
WORKINGS ANSWER

30

QUESTION 1

1.1 Provide TWO documents that Zig Zag Traders will need from potential
debtors before they will be allowed to open accounts.

2
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NOVEMBER 2020 NSC

QUESTION 1: VAT AND CREDITORS' RECONCILIATION (25 marks; 20 minutes)

1.1 VAT

Amahle Traders is registered for VAT. The standard VAT rate is 15%.

REQUIRED:

1.1.1 Calculate the figures indicated by (a) to (d) in the table below. (9)

1.1.2 The internal auditor discovered that Amahle has been underpaying the
amount due to SARS in respect of VAT, at each submission date. On
enquiry, Amahle stated that she used the money to pay business expenses
and adjusted the payments later.

Comment on this practice and give Amahle advice. (3)

INFORMATION:

EXCLUDING INCLUDING VAT

VAT VAT AMOUNT
Invoices received from suppliers R78 000 R89 700 (a)
Discount received from suppliers R12 400 (b)
Credit notes issued to customers (c) R210
Invoices issued to customers R158 700* (d)

* This includes sales for R9 200 which should have been sold at zero rate.
The bookkeeper incorrectly included VAT of R1 200 on these goods.

1.2 CREDITORS' RECONCILIATION

Ekasi Traders buys goods on credit from Thembeka Suppliers.

REQUIRED:

1.2.1 Use the table provided to indicate changes to the:

• Creditors' Ledger Account in the books of Ekasi Traders

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• Creditors' Reconciliation Statement on 30 April 2021 (9)

1.2.2 Refer to Information C(c) about Invoice 395. It was discovered that the
purchasing manager, Bradley, had taken these goods for his personal
catering business. The owner regards Bradley as a valued member of staff
and does not regard this as theft.

What should the owner say to Bradley regarding this incident? Explain
TWO points. (4)

INFORMATION:

A. Creditors' Ledger Account in the books of Ekasi Traders

THEMBEKA SUPPLIERS (CL6)
DEBIT CREDIT BALANCE
2021 1 Balance b/d R81 000
April 12 Invoice 220 97 200 178 200
EFT 40 500 137 700
18 Debit Note 702 10 300 127 400
Invoice 289 49 100 176 500
Invoice 333 30 000 206 500
24 Debit Note 877 9 700 216 200
25 Journal voucher 585 6 400 209 800
31 Cheque and discount 92 600 117 200

B. Statement of account from Thembeka Suppliers

Ekasi Traders
225 Crocodile Road 25 April 2021
DEBIT CREDIT BALANCE
2021 1 Balance R81 000
April 12 Invoice 220 97 200 178 200
Receipt 742 40 500 137 700
18 Credit Note 791 13 100 124 600
Invoice 333 30 000 154 600
22 Invoice 395 12 500 167 100
24 Credit Note 888 9 700 157 400

C. Errors, omissions and other information:

(a) Invoice 289 was incorrectly reflected in the account of Thembeka
Suppliers in the Creditors' Ledger. These goods were purchased
from Thami Suppliers.
(b) Credit Note 791 was recorded incorrectly on the statement of account.
This relates to the correct entry for Debit Note 702 in the Creditors'
Ledger.
(c) Invoice 395 on the statement of account was for goods ordered by
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Ekasi Traders.
(d) Thembeka Suppliers also purchased goods on credit from Ekasi
Traders. Ekasi Traders has transferred a debit balance from the
Debtors' Ledger (Journal voucher 585). Thembeka Suppliers will include
this on the next statement.
(e) The transaction on 24 April 2021 is for merchandise returned to
Thembeka Suppliers.
(f) The statement of account reflects transactions up to 25 April 2021.
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QUESTION 1

1.1 VAT

1.1.1 Workings Answer

(a)

(b)

(c)

(d)
9

1.1.2 Comment on this practice and give Amahle advice.

Comment Advice

3
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1.2 CREDITORS' RECONCILIATION

1.2.1 Creditors' Ledger

Statement
Account of Thembeka
of Account from
Suppliers in the
Thembeka Suppliers
Books of Ekasi Traders
Balance 117 200 157 400

(a)

(b)

(c)

(d)

(e)

(f)

1.2.2 What should the owner say to Bradley regarding this incident? Explain
TWO points.

TOTAL MARKS

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COST ACCOUNTING, BREAK-EVEN POINT, ECONOMIES OF SCALE, MARGINAL COST
NOVEMBER 2022 NSC

QUESTION 1: COST ACCOUNTING (35 marks; 30 minutes)

1.1 Choose an example from COLUMN B that matches a cost category in

COLUMN A. Write only the letter (A–E) next to the question numbers
(1.1.1 to 1.1.4) in the ANSWER BOOK, e.g. 1.1.5 F.

COLUMN A COLUMN B
1.1.1 Administration A carriage on raw material purchased

1.1.2 Direct material B salary of the factory foreman

1.1.3 Selling and distribution C rent expense for the office building

1.1.4 Factory overhead D workers in production

E commission paid to sales staff

(4 x 1) (4)

1.2 WEZA STITCHES

Weza Stitches, owned by Annie Brown, manufactures bathroom towel sets.

Anne buys fabric from local suppliers. The information relates to the financial
year ended 30 June 2022. Note that there were no work-in-progress stock
balances.

REQUIRED:

1.2.1 Calculate the following for the financial year ended 30 June 2022:

• Direct labour cost (7)

• Factory overhead cost (6)
• Total cost of production (4)

1.2.2 Annie is concerned that fixed costs increased to R806 400. Explain why
she should not be concerned. Provide TWO points. Quote figures. (4)

1.2.3 Refer to Information C.

Comment on whether the production staff deserves the production

bonus that they received. Provide THREE points, with figures. (6)

1.2.4 Annie wants to improve her profit by R50 000 during the next financial
year while maintaining costs. Calculate the additional units that must
be produced to achieve this target. (4)

INFORMATION:
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A. Direct labour cost:
• Six workers were employed in production in 2021 and 2022.
• Each of them worked 1 840 hours normal time during the year at R40
per hour.
• The overtime register reflected a combined total of 230 hours worked
at 1,6 times the normal time rate.
• Production staff received a production bonus of 8% of the normal time
wages.

B. Factory overhead cost:

The bookkeeper calculated the factory overhead cost as R541 600.

However, he made the following errors, which must still be adjusted:
• He included the entire insurance expense of R32 500 to the factory
overhead cost, instead of only 60% of this expense.

• He allocated R54 000 to factory water and electricity using the

ratio 3 : 2 : 2 for factory, sales and office respectively. This expense
should have been split in the ratio 2 : 1 : 1.

C. Additional information: (after taking all corrections into account)

30 JUNE 2022 30 JUNE 2021
Total Per unit Total Per unit
Variable costs: R1 561 600 R244 R1 317 750 R251
Direct material R652 800 R102 R672 000 R128
Direct labour ? ? R498 750 R95
Selling and distribution R147 000 R28

Fixed costs: R806 400 R126 R792 750 R151

Factory overheads
Administration

Number of units
6 400 units 5 250 units
produced and sold
Break-even point 6 156 units 6 954 units

Selling price per unit R375 R365

35

1.1
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1.1.1 4
1.1.2
1.1.3
1.1.4

1.2 WEZA STITCHES

1.2.1 Calculate: Direct labour cost

WORKINGS ANSWER

Calculate: Factory overhead cost

Total before corrections 541 600
Insurance
Water and electricity
TOTAL
6

Calculate: Total cost of production for 2022

WORKINGS ANSWER

1.2.2 Annie is concerned that fixed costs increased to R806 400. Explain why
she should not be concerned. Provide TWO points. Quote figures.

POINT 1

POINT 2
4
 24

1.2.3 Comment on whether the production staff deserves the production bonus
that they received. Provide THREE points, with figures.

POINT 1

POINT 2

POINT 3
6

1.2.4 Annie wants to improve her profit by R50 000 during the next financial
year while maintaining costs. Calculate the additional units that must be
produced to achieve this target.
WORKINGS ANSWER

JUNE 2023 NSC SUPPLEMENTARY

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QUESTION 3: COST ACCOUNTING (45 marks; 35 minutes)

3.1 LADOO MANUFACTURERS

The business manufacturers leather purses. The financial year ended on

28 February 2023.

REQUIRED:

3.1.1 Refer to Information C.

Calculate the factory overhead cost. (8)

3.1.2 Prepare the Production Cost Statement on 28 February 2023. (10)

INFORMATION:

A. Work-in-progress stock balance on 1 March 2022 was R542 000.

B. Details of the workers in production:

Number of workers 40
Basic (normal) wage rate R60 per hour
Normal time hours worked by each worker 1 920 hours
Overtime (in total) R1 142 000

C. The bookkeeper calculated the factory overhead cost at R2 638 600.

The following costs were omitted and must be taken into account:
• Insurance is a fixed monthly premium for the entire financial year.
The amount paid, R235 950, includes the premium for March 2023.
2
/3 of this expense relates to the factory.
• Water and electricity allocated to the office was R69 200. Note that
water and electricity is shared according to floor space, as follows:
Factory Sales Office
560 m2 240 m2 160 m2

The following entry must be corrected:

Rent of R316 000 was recorded in the factory overhead cost. However, the
bookkeeper used the incorrect ratio of 2 : 5 : 1 for Factory, Sales and Office.
The correct ratio is 5 : 2 : 1 respectively.

D. Total prime cost for the year amounted to R12 500 000.

E. Total production for the year, 33 500 units, were produced at a cost of R475
per unit.

3.2 STYLZ MAKER

 26
The business manufactures designer shirts. The financial year ends on
30 April each year. The business is owned by Lez Styles.

REQUIRED:
NOTE: Provide evidence in the form of figures or calculations to support the
comments and explanations required below.

3.2.1 Break-even point, production and profit:

• Do a calculation to confirm that the break-even point for 2023 is
correct. (3)
• Comment on the level of production and the break-even point for the
past two years. Explain whether Lez Styles would be happy about
the trends in these results and the profit he is earning. Provide figures
or calculations. (4)

3.2.2 Fixed costs:

Explain why Lez is not concerned about the fixed costs increasing to
R6,1 m in 2023. Quote figures. (4)

3.2.3 Selling and distribution cost:

• Identify how the selling and distribution costs in total and per unit
changed over the two years. (2)
• Explain TWO reasons why Lez deliberately wanted to adjust this
cost. (2)

3.2.4 Direct material and direct labour: Refer to Information A and C.

Lez made specific decisions to improve the business and its product.
Explain how the decisions he took have benefited the business by
providing:
• TWO separate points relating to the raw material (6)
• TWO separate points relating to the direct labour (6)

INFORMATION:

A. Lez's general strategic decisions with effect from 1 May 2023:

• Lez decided to improve the quality of the shirts to be more competitive and to
export to retailers in other countries.
• He changed to a new supplier of the fabric (raw materials) and employed some
highly skilled and creative workers to replace workers who resigned or retired.
• Factory overheads for 2023 included a training programme for factory workers
(R600 000) and the hiring of equipment with the latest technology for R1,4 m
per year.
 27

B. Production and cost

2023 2022
Number of units produced and
10 500 shirts 6 500 shirts
sold
Selling price R1 830 R1 430
Break-even point 4 815 shirts 4 267 shirts
2023 2022
TOTAL PER UNIT TOTAL PER UNIT
R R R R
VARIABLE COSTS 5 916 000 563 3 047 500 469
Direct materials cost 3 780 000 360 1 787 500 275
Direct labour cost 936 000 89 960 000 148
Selling and distribution cost 1 200 000 114 300 000 46
FIXED COSTS 6 100 000 581 4 100 000 631
Factory overhead cost 5 600 000 533 3 600 000 554
Administration cost 500 000 48 500 000 77
TOTAL COST OF PRODUCTION 12 016 000 1 144 7 147 500 1 100

C. Lez undertook a short course on managerial accounting to enable him to analyse

the production costs more effectively every month. He has analysed the following
production costs:

Raw materials: 2023 2022

Cost of fabric per metre R200 R110
Metres of fabric per shirt (including wastage) 1,8 metres 2,5 metres
Fabric used in metres 43 200 metres 44 000 metres

Direct workers:
Number of direct workers 12 workers 15 workers
Average wages per worker p.a. R78 000 R64 000
Hours per worker per year 1 920 hours 1 920 hours
Hours worked by all workers 23 040 hours 28 800 hours
Average number of shirts produced per
875 shirts 433 shirts
worker

45
 28
QUESTION 3

3.1 LADOO MANUFACTURERS

3.1.1 FACTORY OVERHEAD COST

TOTAL before corrections 2 638 600

3.1.2 PRODUCTION COST STATEMENT ON 28 FEBRUARY 2023

PRIME COST 12 500 000

TOTAL MANUFACTURING COST

Work-in-progress at beginning of year 542 000

Work-in-progress at end of year

COST OF PRODUCTION OF FINISHED GOODS

10

3.2 STYLZ MAKER

3.2.1 Do a calculation to confirm that the break-even point for 2023 is correct.

3
 29

Comment on the level of production and the break-even point for the past
two years. Explain whether Lez Styles would be happy about the trends in
these results and the profit he is earning. Provide figures or calculations.

3.2.2 Explain why Lez is not concerned about the fixed costs increasing to R6,1
m in 2023. Quote figures.

3.2.3 Identify how the selling and distribution costs in total and per unit changed
over the two years. Quote figures.

2
Explain TWO reasons why Lez deliberately wanted to adjust this cost.

Reason 1

Reason 2
2
 30

3.2.4 Lez made specific decisions to improve the business and its product.
Explain how the decisions he took have benefited the business by
providing:

TWO separate points relating to the raw material. Quote figures or

calculations.

Point 1

Point 2
6
TWO separate points relating to the direct labour. Quote figures or
calculations.

Point 1

Point 2
6

NOVEMBER 2021 NSC

QUESTION 2: COST ACCOUNTING (45 marks; 35 minutes)

2.1 PRUDY MANUFACTURERS

The information relates to the financial year ended 28 February
2021. The business produces one style of travelling bag. The owner is Prudy
Sithole.
REQUIRED:
Complete the following for the year ended 28 February 2021:
2.1.1 Production Cost Statement (10)
2.1.2 Abridged Statement of Comprehensive Income (Income Statement) (11)
 31

INFORMATION:
A. Stock balances:
28 February 2021 1 March 2020
Finished goods stock R96 000 R72 000

There is no work-in-progress at the beginning or end of the year.

B. Raw material issued to the factory for production, R1 494 000.
C. Production wages:
Information extracted from the production wages records:
NET WAGES PAID TO
TOTAL DEDUCTIONS
PRODUCTION
WORKERS
R647 400 22% of gross wages

D. The bookkeeper calculated the following costs for the year ended
28 February 2021:
Factory overhead cost R520 280
Selling and distribution cost R224 960
Administration cost R187 760

It was discovered that she did not take the following into account:
• The telephone account of R22 400 was posted in error to the factory
overhead cost. This expense relates to the office.
• The entire amount of rent expense, R98 400, was posted to the factory
overhead cost. This expense should have been split in the ratio 7 : 2 :
1 between the factory, sales and administration departments.
• The insurance expense of R26 400 was divided equally between the
factory overhead cost and the sales department in error. 60% of
this expense relates to the factory and the balance applies to the
sales department.
E. Sales:
Total sales for the year amounted to R4 433 600.

2.2 CONTROL OF RAW MATERIAL

After completing the statements in QUESTION 2.1, the internal auditor of
Prudy Manufacturers suspects that the raw material (fabric) is not being
controlled well in the storeroom and the factory.

2.2.1 Calculate:
• The metres of fabric missing from the storeroom
• The metres of fabric wasted in the factory

Apart from installing cameras, provide a specific strategy to improve

internal control in the storeroom and factory. In EACH case, provide a
different point. (6)
 32

2.2.2 Calculate the total cost of fabric lost and wasted and explain how this
loss should be shown in the statements mentioned in
QUESTION 2.1. (3)

INFORMATION:

A. Raw material (fabric):

Fabric used in production is issued to the factory from the storeroom, as

required. The record of fabric is as follows:

METRES TOTAL AMOUNT

Raw material issued to factory 12 450 R1 494 000
Balance on 1 March 2020 2 700 324 000
Purchase of fabric during the year 10 800 1 296 000
Balance on 28 February 2021 850 102 000

B. Additional information:

• Fabric is purchased at a fixed cost price of R120 per metre.

• It takes 1,5 metres of fabric to make one travel bag.
• 7 800 bags were produced during the financial year.

2.3 ROSEMARY'S TOY FACTORY

This factory manufactures toy teddy bears. There is no work-in-progress

stock at the beginning or end of each year. The financial year ends on 31
December.

Rosemary decided to address the problem of low profits made in 2020

by making some changes to improve sales and production.

REQUIRED:

2.3.1 Provide a calculation to confirm that the break-even point for the 2021
financial year is correct.
(3)

2.3.2 Explain why Rosemary is pleased with the production level, sales and
break-even point. Quote figures. (4)

2.3.3 Explain to Rosemary why the fixed cost per unit decreased from
R56,00 to R45,71.
(2)

2.3.4 Rosemary made deliberate decisions regarding variable costs

to improve the business.

Explain the decisions that she might have taken on these costs and
how these could have had positive effects on the business. Quote
figures. (6)
 33

INFORMATION:

31 DECEMBER 2021 31 DECEMBER 2020

AMOUN UNIT AMOUN UNIT
TR COST TR COST
Direct material cost 490 000 100,00
R 320 000 80,00
R
Direct labour cost 274 400 56,00 288 000 72,00
Selling and distribution 176 400 36,00 96 000 24,00
cost
VARIABLE COST 940 800 192,00 704 000 176,00
Factory overhead costs 160 000 32,65 160 000 40,00
Administration cost 64 000 13,06 64 000 16,00
FIXED COST 224 000 45,71 224 000 56,00

Selling price per unit R255 R240

Units produced and sold 4 900 units 4 000 units

Break-even point 3 556 units 3 500 units

45

QUESTION 2
2.1 PRUDY MANUFACTURERS

2.1.1 PRODUCTION COST STATEMENT FOR THE YEAR ENDED

Direct material cost 1 494 000

 34
28 FEBRUARY 2021

10

2.1.2 ABRIDGED STATEMENT OF COMPREHENSIVE INCOME (INCOME

STATEMENT) FOR THE YEAR ENDED 28 FEBRUARY 2021

Sales 4 433 600

Cost of sales

Gross profit
Other expenses

Selling and distribution costs

224 960
Administration cost
187 760

Net profit for the year

11

2.2 CONTROL OF RAW MATERIAL

2.2.1 Calculate the metres of fabric: Internal control strategy

Missing from the storeroom
 35

2.2.2 Calculate the total cost of fabric lost and wasted.

WORKINGS ANSWER

Explain how this loss should be shown in the statements mentioned in

QUESTION 2.1.

2.3 ROSEMARY'S TOY FACTORY

2.3.1 Provide a calculation to confirm that the break-even point for the 2021
financial year is correct.

2.3.2 Explain why Rosemary is pleased with the production level, sales and
break-even point. Quote figures.
 36

2.3.3 Explain to Rosemary why the fixed cost per unit decreased from R56,00
to R45,71.

2.3.4 Rosemary made deliberate decisions regarding variable costs to

improve the business.
Explain the decisions that she might have taken on these costs and how
these could have had positive effects on the business. Quote figures.
Cost Comment and positive effect (with figures)

Direct material
cost

Direct labour cost

Selling and
distribution cost

6
 37

3.3.2 Juanita is concerned about the cash position for December 2022.
She proposes moving the purchase of the vehicle to January 2023.

Use the table below to show the effect of this proposal to the December 2022
Cash Budget.
Budgeted deficit on 31 December 2022 (120 000)
Deposit on vehicle

Cash deficit/surplus after the proposed move

6

3.4 Juanita is concerned about her decisions in October 2022 to adjust the
mark-up % and the amount actually spent on advertising. Provide TWO
points to indicate whether these were wise decisions or not. Quote figures
and/or calculations.

POINT 1

POINT 2

3.5.1 Explain why Juanita should be concerned about the actual amount spent on
repairs and maintenance during October 2022. Quote a figure and/or a
calculation.

2
 38

3.5.2 James feels that there has been a lack of control over the amounts spent on
delivery expenses and packing material. Explain whether James' opinion is
correct or not. Provide calculations.

EXPLANATION
ON DELIVERY
EXPENSES

EXPLANATION
ON PACKING
MATERIAL

3.6 Juanita wants to use social media to create an on-line shopping platform to
increase her sales from January 2023. Name THREE additional payments
that must be included in the January 2023 budget.

PAYMENT 1

PAYMENT 2

PAYMENT 3
3

JUNE 2023 NSC SUPPLEMENTARY

QUESTION 4: BUDGETING (40 marks; 30 minutes)
4.1 Show the amounts for the following transactions in the appropriate columns for
the Cash Budget and the Projected Statement of Comprehensive Income in the
ANSWER BOOK:
4.1.1 A computer costing R26 400 will be purchased for cash on 1 July 2023.
Depreciation will amount to R550 per month.
4.1.2 A fixed deposit of R90 000 will be invested on 1 July 2023. Interest at
9% p.a. will be deposited into the business bank account at the end of
each month. (6)
4.2 ALICE FURNISHERS (PTY) LTD
The information relates to the budget period ending July 2023.
 39

REQUIRED:
4.2.1 Complete the Debtors' Collection Schedule for July 2023. (7)
4.2.2 Calculate missing figures (i) to (iii) on the Cash Budget provided. (8)
4.2.3 Salaries of workers:
• Calculate the % increase that workers will receive in July 2023. (3)
• Give TWO reasons why you think that workers would be satisfied
with this increase. (2)
4.2.4 Advertising and delivery expenses: Refer to Information F.
• Comment on the effectiveness of the advertising. Provide figures or
calculations. (4)
• Alice is satisfied with the control over delivery expenses. Provide
figures or calculations to justify her feelings. (2)
• Alice is, however, concerned about the control over each vehicle.
Identify a different issue (problem) for EACH vehicle that confirms
her concern. Provide figures or calculations to justify her feelings. (4)
• Provide TWO suggestions on how Alice can improve the use or
efficiency of the vehicles. (4)
INFORMATION:
A. Sales and cost of sales:
APRIL MAY JUNE JULY
Sales 1 260 000 1 274 000 1 316 000 1 330 000
Cost of sales 900 000 910 000 940 000 950 000

B. Credit sales comprise 70% of total sales. Debtors pay according to the
following trend:
• 20% pay in the month of sales and receive 7,5% discount.
• 55% pay in the month following the month of sale.
• 22% pay two months after the sales month.
• The balance is written off thereafter.
C. Stock sold is replaced in the month of sales. A base stock is maintained.
80% of stock is purchased on credit and creditors are paid two months
(60 days) after the month of purchase.

D. Additional information:
The business plans to take a loan on 30 June 2023. This has been
negotiated with the bank at 11% p.a. interest, payable at the end of each
month and commencing on 31 July 2023.
 40

E. Extract from the Cash Budget:

JUNE 2023 JULY 2023
RECEIPTS (R) (R)
Cash sales 394 800 (i)
Collections from debtors 854 952 ?
Commission income 131 600 133 000
Loan: Cheetah Bank (ii)
PAYMENTS
Cash purchase of stock 188 000 190 000
Payments to creditors 720 000 (iii)
Directors' fees (two directors) 52 000 49 600
Salaries of workers (including drivers) 172 000 182 320
Advertising 39 480 39 900
Delivery expenses 65 800 66 500
Packing material 78 960 79 800
Interest on loan - 5 500
Municipal services
Sundry expenses

F. Advertising and delivery expenses:

• The business has two delivery vehicles and offer a free delivery service
to customers.
• The budget for delivery expenses is fixed at 5% of the budgeted sales,
on an average distance of 2 000 km to be covered.
Actual and budgeted figures for May 2023:
BUDGETED/
ACTUAL VEHICLE 1 VEHICLE 2
EXPECTED
Sales 1 274 000 1 082 900
Advertising 38 220 36 820
Salaries of drivers 30 000 30 000 15 000 15 000
Delivery expenses 63 700 54 100 35 500 18 600
Petrol/Fuel 47 700 40 000 26 000 14 000
Maintenance 16 000 14 100 9 500 4 600
Kilometres covered 2 000 km 1 800 km 1 260 km 540 km
Date purchased 1 Mar. 2018 1 Mar. 2022

40

QUESTION 4
 41
4.1 PROJECTED STATEMENT OF
CASH BUDGET
NO. COMPREHENSIVE INCOME
RECEIPT PAYMENT INCOME EXPENSE
4.1.1

4.1.2
6

4.2 ALICE FURNISHERS (PTY) LTD

4.2.1 DEBTORS' COLLECTION SCHEDULE

CREDIT
MAY JUNE JULY
SALES
April 882 000 485 100 194 040
May 891 800 164 983 490 490
June 921 200 170 422
July 931 000
650 083 854 952 7

4.2.2 Calculate:
WORKINGS ANSWER
(i) Cash sales for July 2023

(ii) Loan amount in June 2023

(iii) Payment to creditors in July 2023

4.2.3 Calculate the % increase that workers will receive in July 2023.
WORKINGS ANSWER

Give TWO reasons why you think that workers would be satisfied with this
increase.
 42

Reason 1

Reason 2
2

4.2.4 Comment on the effectiveness of the advertising. Provide figures or

calculations.

4
Alice is satisfied with the control over delivery expenses. Provide figures
or calculations to justify her feelings.
WORKINGS ANSWER

2
Alice is, however, concerned about the control over each vehicle. Identify
a different issue (problem) for EACH vehicle that confirms her concern.
Provide figures or calculations to justify her feelings.

Vehicle 1

Vehicle 2
4
Provide TWO suggestions on how Alice can improve the use or efficiency
of the vehicles.

Suggestion 1

Suggestion 2
4