Western Cape Education Department

Curriculum (FET)

ACCOUNTING
REVISION BOOKLET
2024 TERMS 3 & 4

Grade 10

SOLUTIONS

This revision program is designed to assist you in revising the critical

content and skills that you have covered during the 3rd and 4th term.
The purpose is to prepare you to understand the key concepts and to
provide you with an opportunity to establish the required standard and
the application of the knowledge necessary to succeed in the
examination.
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 1

1.1.1 Materiality ✓
1.1.2 Business entity ✓
1.1.3 Prudence ✓
1.1.4 Historical cost ✓ 4

1.2 KAYCEE TRADERS

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2022
Sales (1 300 000 – 13 700✓) 1 286 300 
Cost of sales (940 000) ✓
Gross profit [4] 346 300 
Other operating income 34 390 
Rent income (28 000 ✓+ 2 900✓) 30 900 
Discount received 1 990 ✓
Bad debts recovered (800 + 700✓) 1 500 
Gross operating income [8] 380 690 
Operating expenses (277 635) 
Water and electricity (25 680 + 3 200✓) 28 880 
Telephone (18 920 + 2 570✓) 21 490 
Salaries and wages 173 000 ✓
Bad debts (2 100 + 350✓) 2 450 
Discount allowed 2 550 ✓
Bank charges 2 440 ✓
Stationery 4 100 ✓
Insurance (7 650 – 2 800✓) 4 850 
Trading stock deficit (43 400✓ – 2 500✓ – 1 840 ✓– 35 800✓) 3 260 
Donations 2 500 ✓
Depreciation (1 375 ✓+ 7 700✓ + 23 040✓) 32 115 
Operating profit [25] 103 055 
Interest income 220 ✓
Profit before interest expense 103 275 
Interest Expense (47 670) 
Net profit for the year [4] 55 605  41
CALCULATIONS:

Depreciation: Vehicles:
Equipment:
New: 55 000 x 10÷100 x 3÷12 = R1 375 190 000 – 36 400 = 153 600 X 15÷ 100
Old:
132 000 – 55 000 = 77 000 X 10÷100 = R7 700 = R23 040
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

Rent income:

650 X 5 = 3 250 (total increase)

28 000 – 3 250 = 24 750 ÷ 11 = R2 250 before increase

2 250 + 650 = R2 900

Interest Expense
Interest on loan ((29 000 ✓+ 17 500✓) 46 500 
Interest on bank overdraft 1 170 ✓
47 670 4

1.3 Will the Bank account balance be a current asset of a current liability on
28 February 2022? Give a reason for your answer.
Current liability✓
Reason:
Bank a/c has a credit balance✓ 2
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 2
2.1 NOTES TO THE FINANCIAL STATEMENTS
2.1.1 FIXED / TANGIBLE ASSETS

Vehicles Equipment
Cost 1 200 000 ✓480 000
Accumulated depreciation ✓ (1 080 000) (283 400)
Carrying value at beginning of year 120 000 196 600
Movements
Additions at cost 0 ✓✓ 170 000
Depreciation ✓✓ (119 999) ✓✓ (47 820)
Carrying value at end of year ✓ 1  318 780
Cost 1 200 000 650 000
Accumulated depreciation  (1 199 999)  (331 220) 12

Calculations:
Vehicles: Equipment:
Old: 196 600 x 20% = R39 320
1 200 00 x 15% = R180 000 but book value is only
R120 000; can write off 120 000 – 1 = R119 999 New Equipment:
170 000 x 20% x 3/12 = 8 500

2.1.2 TRADE AND OTHER RECEIVABLES

Debtors control (216 500 ✓+ 24 500 ✓– 7 200✓) 233 800 
Income receivable / Accrued income (Interest on fixed deposit) 4 600 ✓✓
(16 100 x 2/7)
Prepaid expenses (Insurance) (9 600 x 6/12 ) 4 800 ✓✓
243 200  9
2.1.3 TRADE AND OTHER PAYABLES
Creditors control 199 000 ✓
Expenses payable / Accrued expenses (Telephone) 1 300 ✓
Deferred income / Income received in advance (Rent income) 42 560 ✓✓
(212 800 x 3/15)
242 860  5
2.1.4 OWNER’S EQUITY
Capital 240 000 ✓
Net profit 78 000 ✓
Drawings (56 000) ✓
262 000 ✓ 4
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

2.2 STATEMENT OF FINANCIAL POSITION ON 28 FEBRUARY 2022

ASSETS
NON-CURRENT ASSETS ( 776 860 – 391 290) 385 570 
Fixed Assets (1 + 318 780) 318 781 
Financial assets (Fixed deposit) 66 789 
CURRENT ASSETS (260 860 x 1.5) 391 290 
Inventories (133 600 ✓ – (24 500 x 100/140)✓ 116 100 
Trade and other receivables 243 200 
Cash and cash equivalents 31 990 
TOTAL ASSETS [12] 776 860 

EQUITY AND LIABILITIES

OWNER’S EQUITY 262 000 

NON-CURRENT LIABILITIES 254 000

Loan: Jo Bank (290 000 ✓– 40 000 ✓ + 22 000✓ - 18 000✓) 254 000 

CURRENT LIABIILITIES 260 860

Trade and other payables 242 860 
Current portion of loan 18 000
TOTAL EQUITY AND LIABILITIES [8] 776 860  20
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 3

Equipment Vehicles
Carrying value at beginning of year ✓275 000 140 000
Cost 380 000 560 000
Accumulated depreciation (105 000) ✓(420 000)

Movements
Additions at cost 110 000
Depreciation ✓(42 625) ✓✓ (112 000)
Carrying value at end of year 342 375 ✓28 000
Cost 490 000 ✓560 000
Accumulated depreciation (147 625) (532 000) 10

INVENTORY
Trading stock (153 000 - 9 000✓ + 3 800 ✓) 147 800 
Consumable stores on hand 2 700 ✓
4

TRADE AND OTHER RECEIVABLES

Debtors control (76 000 – 1 155  - 5 985*) 68 860 
Prepaid expenses (Insurance) 10 290 
7
*3 800 x 175/100 ✓– 6 650  x 90% ✓= 5 985

LUZUKO STORES
STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 30 JUNE 2022
EQUITY AND LIABILITIES
Owner’s Equity (1 500 000✓ – 570 000 ✓– 135 365✓) 794 635 
Non-current liabilities 570 000
Loan JZ Bank (620 000✓ – 50 000✓) 570 000 ✓
Current liabilities 135 365
Trade and other payables (54 000 +780 ✓+ 7 200 ✓✓+ 68 545 
6 500 *+ 65)
Bank overdraft (15 500 + 530✓ + 790 ✓) 16 820 
Current portion of loan 50 000 
TOTAL EQUITY AND LIABILITIES 1 500 000 20
* 5 2 65✓ + 1 170✓ + 65 ✓= 6 500
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 4

4.1.1 Gross profit as a percentage on cost of sales

760 000 – 475 000 = 285 000

285 000✓✓ X 100

475 000 ✓ 1

= 60%  (one part correct)

4

4.1.2 Net profit as a percentage of turnover

231 040__✓ X 100

760 000 ✓ 1
= 30,4%  (one part correct)
3

4.1.3 Current ratio

(29 035 + 34 350 + 825)

64 210 ✓✓ : 23 327 ✓

2,75 : 1 of 2,8 : 1  (one part correct)

4

4.1.4 Acid test ratio

(64 210 – 29 035) or 35 035 two marks 0R (34 350 + 825)

64 210✓ – 29 035✓ : 23 327✓

35 175 : 23 327
1,5 : 1  (one part correct)
4
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

4.1.5 Return on average owner’s equity.

_______ 231 040_✓_______ X 100

½ ✓(830 716 ✓+ 810 968✓) 1

_231 040_ X 100

820 842 1
5
28,14%  (one part correct)

4.2 Do you think that Mocha Coffee Shop is satisfied with the gross
profit % on cost of sales? Comment and quote figures to support
your answer.

No,✓ she has a mark-up of 65% but only achieved 60% ✓✓

Could be due to sale or trade discount or inflation. 3

4.3 Comment on the liquidity of Mocha Coffee Shop.

Quote TWO financial indicators with figures to support your answer.

See 4.1.3
Current ratio ✓ increased from 1,3:1 to 2,8:1. ✓
See 4.1.4
4
Acid test ratio✓increased from 0,7 : 1 to 1,5 :1✓

4.4 Should Mocha Coffee Shop be satisfied with the return on owner’s
equity? Comment through quoting figures to support your answer.

Yes/No✓. Even though it decreased from 39% to 28,14%✓ The owner

should be satisfied because 37,2% is much higher than the 10% which
she would have received if she invested the money at the bank.✓

3
TOTAL MARKS

30
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 5

5.1 Current ratio

40 190 + 35 800 + 1 760 : 27 768

77 750✓✓: 27 768✓

2,79 : 1  (one part correct) 4

5.2 Acid-test ratio

35 800 + 1 760 : 27 768

OR

(77 750 - 40 190) : 27 768

37 560 ✓✓ : 27 768✓
4
1, 35 : 1  (one part correct)

5.3 From the above calculations will L & J Traders experience liquidity
problems?
Support your answer with an explanation and figures.

No, there has been a slight improvement in the Current ratio✓ from
2.28 : 1 to 2,79 : 1✓while the Acid test ratio ✓has decreased slightly
from 1,4 : 1 to 1,35 : 1✓
They can comfortably pay off their short term debt without pressure
5
to sell stock.✓

5.4 Is the business in danger of going bankrupt? Use an appropriate

ratio to support your answer.

No✓
(234776 + 55 000 + 40 190 + 35 800 + 1 760) : (70 000 + 27 768)
367 526 ✓✓: 97 768✓✓
3,75 : 1✓ 6
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

5.5 Calculate the return on owner’s equity for 2021

172 600 ✓ x 100

½ ✓(382 860 + 190 000)✓

172 600 x 100 = 60,25%

4
286 430

5.6 Should the owner be happy with this return? Give a reason for your
answer.
Quote figures to support your answer.

Yes, as the return increased from 50% to 60%.✓✓

Exceeds the return on alternative investments, e.g. fixed deposit.✓ 3
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Accounting revision booklet 2024 Grade 10 Term 3 & 4
Solutions

ACTIVITY 6

6.1.1 D ✓
6.1.2 A✓
6.1.3 E✓
6.1.4 C✓ 4

6.2 CALCULATIONS:
6.2.1 Calculate the direct material cost

16 000 + 5 500 +1 100 + 300 + 500 + 600 = 24 000✓✓*

* At least three figures correct 3

6.2.2 Calculate the direct labour cost

250 x 40 = 10 000✓✓ 2

6.2.3 Calculate the prime cost

24 000  + 10 000  = 34 000  one part correct or correspond with 7.2.1 and 7.2.2
3

6.2.4 Calculate the total production cost

24 000  + 10 000  + 11 000 ✓+1 800 ✓= 46 800  (one part correct )

Check 7.2.1 and 7.2.2 5

6.2.5 Calculate the unit cost of ONE table

46 800  ÷ 40✓= 1 140  (one part correct)

Check 7.2.4 3