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Answer ALL the questions in this section. Question 1 (20) Qrisflu, dofino tho fallnwinn wards (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) Question 2 Briefly explain giving four reasons why valuation of assets is undertaken in a business. Question 3 Discuss the reasons for drawing up budgets. SECTION B [60] Answer any THREE questions from this section. Question 4 (20) (see next page) Mafikeng Mining Supplies has presented you with the following Trial Balance as at 31 December 2017. Additional Information 1. An estate agent has revalued the land and buildings at R210000. 2. The long term loan is interest free from the owner. 3. A provision for bad debts of 10% is required on the debtors figure. 4. The investments consist of 23000 shares at R1 each now valued at R1.43 per share. Required: 4.1 Calculate the value of Mafikeng Mining using the intrinsic value (10) method. 4.2 Calculate the value of Mafikeng Mining using the book value (10) Method Question 5 (20) 5.1 Mrs Zungu sells cakes at the local flea market. Each cake costs (4) her R20-00 to make and she sells them at R50-00 each. The cost of hiring a stall at the flea market is R600-00. How many cakes must she sell to break even? 5.2 If Mrs Zungu increases her selling price to R60-00 per cake and (4) manages to reduce her stall hiring costs to R40000, what is her new break even point? 5.3 Given the same in 6.2 above, how many cakes does Mrs Zungu (4) have to sell to make a profit of R400-00 5.4 If in one week Mrs Zungu manages to sell 60 cakes at the flea (4) market, given the information in 6.1 above, calculate her margin of safety. 5.5 Comment on the effect of an increase in stall fees on Mrs Zungu's (4) profitability and break even point. Page 3 of 5 Question 6 The following information is relates to the activities of Alpha Limited. Income Statement for the year ended 31 December 2017. Balance Sheet as at 31 December 2017. Required: Calculate the following financial ratios for Alpha Limited. 6.1 Current Ratio 6.2 Acid Test Ratio (2) (2) Page 4 of 5 Question 7 The following information is available from the books of Maxi Enterprises. Additional Information: 1. The cash balance is expected to be R 150000 on 31 January. 2. All wages are paid in cash. 3. Creditors are paid one month after materials have been received. 4. Sales are 60% cash and 40% credit sales. 5. Credit sales are paid after one month. 6. The overheads include a R40 000 depreciation charge. 7. Overheads are paid in the month in which they are incurred

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