GP Accounting Grade 11 November 2023 Paper 1 PDF

Downloaded from Stanmorephysics.com PROVINCIAL EXAMINATION NOVEMBER 2023 GRADE 11 ACCOUNTING PAPER 1 TIME: 2 hours MARKS: 150 11 pages + 1 formula sheet and an 8...

Downloaded from Stanmorephysics.com PROVINCIAL EXAMINATION NOVEMBER 2023 GRADE 11 ACCOUNTING PAPER 1 TIME: 2 hours MARKS: 150 11 pages + 1 formula sheet and an 8-page answer book  Downloaded from Stanmorephysics.com INSTRUCTIONS AND INFORMATION Read the following instructions carefully and follow them precisely. 1. Answer ALL the questions. 2. A special ANSWER BOOK is provided in which to answer ALL the questions. 3. A FORMULA SHEET for financial indicators is provided at the back of this question paper. 4. Show ALL workings to earn part-marks. 5. You may use a non-programmable calculator. 6. You may use a dark pencil or blue/black ink to answer the questions. 7. Where applicable, show all calculations to ONE decimal point. 8. Learners will forfeit marks for: The use of non-standardised abbreviations Overwriting of figures or words Superfluous/Foreign entries 9. Write neatly and legibly. 10. Use the information in the table below as a guide when answering the question paper. Try NOT to deviate from it. QUESTION TOPIC MARKS TIME IN MINUTES 1 GAAP & Fixed Assets Note 30 24 minutes 2 Income Statement 45 36 minutes 3 Balance Sheet 50 40 minutes 4 Analysis and Interpretation 25 20 minutes TOTAL: 150 120 minutes  Downloaded from Stanmorephysics.com QUESTION 1: GAAP & FIXED ASSETS NOTE (30 MARKS; 24 MINUTES) 1.1 CONCEPTS State whether the following statements are TRUE or FALSE. Write only TRUE or FALSE next to the question numbers (1.1.1 to 1.1.5) in the ANSWER BOOK. 1.1.1 Carrying value is the remaining value of an asset after it has been fully depreciated. 1.1.2 GAAP makes it possible to compare the financial results of different companies. 1.1.3 The materiality principle states that all incomes earned, and expenses incurred must be shown for the same financial period. 1.1.4 Accumulated depreciation is an expense. 1.1.5 Depreciation is a negative asset. (5) 1.2 FIXED ASSETS NOTE GOODY SHOE TRADERS You are provided with the following information from the records of Goody Shoe Traders. The financial year end is 31 December 2023. REQUIRED: 1.2.1 Calculate the total depreciation on equipment for the year ended 31 December 2023. (4) 1.2.2 Complete the Fixed Assets Register for the vehicle sold. (5) 1.2.3 Calculate the depreciation on the old vehicles for the year ended 31 December 2023. (4) 1.2.4 Complete the Fixed Assets Note to the Financial Statements on 31 December 2023. (12)  Downloaded from Stanmorephysics.com INFORMATION: A. Extract of a Pre-adjustment Trial Balance of Goody Shoe Traders. List of balances on 31 December 2023 Vehicles 2 680 000 Equipment 810 000 Accumulated depreciation on vehicles 1 060 000 Accumulated depreciation on equipment 240 000 B. Equipment New equipment with a cost price of R120 000 was purchased on 1 October 2023. No entries have been made. Equipment is depreciated at 20% p.a. using the cost price method. C. Vehicles One of the delivery vehicles was sold for R190 000 on 1 July 2023. The vehicle was purchased on 1 July 2021 for R320 000. Vehicles are depreciated at 10% p.a. using the diminishing balance method. 30 QUESTION 2: INCOME STATEMENT (45 MARKS; 36 MINUTES) PLUMSTEAD HARDWARE You are provided with information relating to Plumstead Hardware. The financial year ends on 28 February 2023 and they use the perpetual stock system. REQUIRED: Prepare the Statement of Comprehensive Income for the year ended 28 February 2023. (45)  Downloaded from Stanmorephysics.com INFORMATION: Pre-adjustment Trial balance on 28 February 2023 Balance Sheet Accounts Section Debit Credit Fixed deposit: Prosper Bank 50 000 Vehicles 200 000 Capital 538 610 Drawings 280 080 Equipment 56 000 Accumulated depreciation: Vehicles 75 000 Accumulated depreciation: Equipment 23 100 Trading stock 352 800 Debtors' control 35 600 Provision for bad debts 1 086 Bank 111 996 Cash float 1 052 Loan: ABSA 90 000 Creditors' control 45 170 Nominal Accounts Section Sales 1 797 600 Cost of sales 1 027 200 Debtors' allowances 9 860 Rent expense 59 850 Advertising 10 800 Stationery 3 490 Salaries and wages 324 000 UIF contributions 3 240 Bad debts 5 670 Bad debts recovered 1 342 Insurance 10 560 Water and electricity 17 724 Telephone 12 336 Discount received 2 340 Discount allowed 1 990 2 574 248 2 574 248 A. Adjustments and additional information (i) On 27 February 2023 a debtor, L. Abbas, returned goods with a selling price of R1 575. The business uses a mark-up of 75% on the cost price of goods. (ii) The owner, F. Madhi, took trading stock with a cost price of R1 300 for personal use. (iii) No entries have been made with regards to stock stolen on 3 February 2023. The insurance company has informed Plumstead Hardware that they have transferred R9 600 into the business’s bank account in respect of the insurance claim. Plumstead Hardware bears 20% of the stock loss. Downloaded from Stanmorephysics.com (iv) On 28 February 2023 a physical stock count was done. It showed that the following were on hand: (a) Trading Stock, R340 740 (b) Stationery, R480 (v) Several debtors had long overdue accounts. The partners decided to write-off accounts totalling R3 425. (vi) The provision for bad debts must be adjusted to 3% of outstanding debts. (vii) Rent expense is paid one month in advance. The rent was increased by 10% p.a. on 1 January 2023. (viii) On 1 January 2023, an amount of R720 was paid for the placement of an advertisement for the first three months of 2023. (ix) The following accounts were still payable on 28 February 2023: (a) Water and electricity, R1 098 (b) Telephone, R662 (x) An employee, Mr Martha, has been left out of the February 2023 salaries journal. His salary is as follows: Net salary R10 500 Deductions R 1 500 UIF contribution 1% of his gross salary (xi) The following information appeared on the Bank Statements received from Nedbank: Service fees, R1 120 Internet banking fees, R320 Interest on credit balance, R170 (xii) The following statement was received from Prosper Bank with regards to the fixed deposit: Balance on 1 March 2022 R50 000 Interest capitalised ? Balance on 28 February 2023 R53 250 (xiii) Provide for depreciation of R13 987. 45  Downloaded from Stanmorephysics.com QUESTION 3: BALANCE SHEET (50 MARKS; 40 MINUTES) 3.1 CONCEPTS Match the concept in COLUMN A with the example in COLUMN B. Write only the letters (A – E) next to the question numbers (3.1.1 to 3.1.4) in the ANSWER BOOK. COLUMN A COLUMN B 3.1.1 Going concern A Does the partnership have enough assets to cover all debt? 3.1.2 Solvency B Analysis of the financial position of the 3.1.3 Balance sheet partnership 3.1.4 Liquidity C The partnership reflects trading stock in the Balance Sheet at R60 000, even though they are planning on having a sale next month. The stock will then be sold for R40 000. D The partnership must use the same inventory system from one financial year to another. E Is the partnership able to pay off all short-term debt? (4) 3.2 HOPPITY POPPITY TRADERS REQUIRED: Prepare the Equity and Liabilities section of the Statement of Financial Position on 28 February 2023. Show all the calculations relating to the notes in brackets. (21)  Downloaded from Stanmorephysics.com < INFORMATION: The following balances appeared amongst others in the General Ledger of Hoppity Poppity Traders on 28 February 2023. Capital: Hoppity (1/03/2022) 200 000 Capital: Poppity (1/03/2022) 170 000 Current Account: Hoppity (Debit) 1 690 Current Account: Poppity (Credit) 10 360 Loan: ABSA Bank (12%) 40 000 Trading stock 58 040 Debtors' control 70 000 Accrued income 3 000 Cash float and petty cash 7 000 Creditors' control 24 070 SARS: PAYE 3 500 Bank overdraft ? Pension fund 500 Income received in advance 700 A. Adjustments and additional information (i) On 28 February 2023 Poppity contributed equipment to the value of R30 000 to equalise her capital contribution. This entry was not recorded. (ii) The following statement was received from ABSA Bank regarding the loan: Balance on 1 March 2022 R49 000 Repayments including interest 12 000 Interest capitalised ? Balance on 28 February 2023 R40 000 The business will pay off the same capital portion of the loan in the next financial year as the current year. (iii) The current ratio is 2 : 1. 3.3 IRONMAN TOY STORE The following information was extracted from the accounting records of IronMan Toy Store. The store is a partnership between Mr Iron and Mr Man.  Downloaded from Stanmorephysics.com REQUIRED: Prepare the Current Account Note as it would appear in the notes to the financial statements for the year ending 28 February 2023. (25) INFORMATION: A. The following balances appeared in the ledger of IronMan Toy Store on 28 February 2023. Capital: Iron R360 000 Capital: Man R760 000 Current account: Iron R2 300 (DR) Current Account: Man R4 500 (CR) Drawings: Iron R25 000 Drawings: Man R30 000 B. Additional information: (i) Iron took stock to the value of R35 000. This was donated to a local charity in his personal capacity. (ii) On 1 March 2022 Iron increased his capital by R175 000. No entry has been made for this transaction. (iii) The partnership agreement stipulated the following: Partners are entitled to interest at 15% p.a. on their capital balance at the end of the financial year. On 1 January 2022 Iron received a 10% increase on his monthly salary of R26 500. No further increases were given. Man’s salary for the year amounted to R425 000. At the end of the financial year only Man received a bonus equal to 12% of his annual salary. Iron and Man shared the remaining profits or losses in the ratio 3 : 2. (iv) Iron received a bonus of R12 000 at the end of the financial year. (v) Man’s portion of the final distribution of profit amounted to R125 000. 50  Downloaded from Stanmorephysics.com QUESTION 4: ANALYSIS AND INTERPRETATION (25 MARKS: 20 MINUTES) NOTA CLOTHING BOUTIQUE You are provided with information relating to Nota Clothing Boutique for the year ended 31 December 2023, together with comparative figures for 2022. The business is owned by partners, Nombeko and Thandi. REQUIRED: 4.1 Calculate the following financial indicators for 2023. Show all calculations and round-off your answer to one decimal place where necessary. 4.1.1 Percentage operating expenses on turnover (2) 4.1.2 Acid-test ratio (4) 4.1.3 Debt-equity ratio (3) 4.1.4 Percentage returns on average partners’ equity (4) 4.2 Comment on the liquidity position of the business for 2023. Quote ONE financial indicator and figures to support your answer. (4) 4.3 The business changed their policy with regard to the profit mark-up from 2022 to 2023. What was the change in policy? What are the risks in this regard and what effect did this change have on the business income? (4) 4.4 Does the business have good control over their expenses? Quote ONE financial indicator and figures to support your answer. (4) INFORMATION: Extract from the Statement of Comprehensive Income: 2023 2022 Turnover 3 213 000 3 004 400 Cost of sales 2 142 000 2 146 000 Operating expenses 512 640 520 000 Interest on loans (14% p.a.) 53 200 70 000 Net profit 505 160 279 376  Downloaded from Stanmorephysics.com Extract from the Statements of Financial Position: 2023 2022 Non-current assets (fixed assets) 647 200 631 000 Current assets 430 560 262 300 Inventories 357 660 175 600 Trade and other receivables 31 700 29 800 Cash and cash equivalents 41 200 56 900 Partners’ equity 496 610 273 500 Non-current liabilities (Loans) 380 000 500 000 Current liabilities 201 150 119 800 Financial indicators: 2023 2022 Percentage gross profit on cost of sales 50% 40% Percentage operating expenses on turnover ? 17,3% Current ratio 2,1 : 1 2,2 : 1 Acid-test ratio ? 0,7 : 1 Stock turnover rate 8 times p.a. 12,2 times p.a. Stock holding period 45 days 30 days Debtors' collection period 34 days 36 days Creditors' payment period 30 days 30 days Debt : Equity ratio ? 1,8 : 1 Percentage returns on partners’ equity ? 102,1% 25 TOTAL: 150  Downloaded from Stanmorephysics.com GRADE 11 ACCOUNTING FINANCIAL INDICATOR FORMULA SHEET Gross profit 100 Gross profit 100 Net profit 100    Sales 1 Cost of sales 1 Sales 1 Operating expenses 100 Operating profit 100   Sales 1 Sales 1 Total earnings by partner 100 Net profit 100   Average partners' equity 1 Average partners' equity 1 Current assets: Current liabilities Current assets – Inventories: Current liabilities Trade and other receivables + Cash and cash equivalents: Current liabilities Average debtors 365 12 Average creditors 365 12  or  or Credit sales 1 1 Credit purchases or Cost of sales 1 1 Average inventorie s 365 12 Cost of sales  or Cost of sales 1 1 Average inventorie s Non-current liabilities: Partners’ equity Total assets: Total liabilities Total fixed costs Selling price per unit − Variable costs per unit  Downloaded from Stanmorephysics.com PROVINCIAL EXAMINATION NOVEMBER 2023 GRADE 11 ACCOUNTING PAPER 1 ANSWERBOOK Name of school: Name of learner: Date: Question Topic Possible Obtained Moderated marks marks marks 1 GAAP & Fixed Assets 30 Note 2 Income Statements 45 3 Balance Sheet 50 4 Analysis and Interpretation 25 150 8 pages  Downloaded from Stanmorephysics.com QUESTION 1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 5 1.2.1 Depreciation on equipment AMOUNT Old Equipment: New Equipment: Total depreciation for the year: 4 1.2.2 EXTRACT OF FIXED ASSET REGISTER OF GOODY SHOE TRADERS FOR VEHICLES SOLD DELIVERY VEHICLE (SOLD) COST PRICE = R320 000 Current Accumulated Carrying Date Calculation depreciation depreciation value 31 Dec 2021 16 000 16 000 31 Dec 2022 1 Jul 2023 5  Downloaded from Stanmorephysics.com 1.2.3 Depreciation on old vehicles AMOUNT SOLD OLD Total depreciation for the year: 4 1.2.4 FIXED/TANGIBLE ASSETS VEHICLES EQUIPMENT Carrying value at the beginning of the year Cost 2 680 000 810 000 Accumulated depreciation (1 060 000) (240 000) Movements Additions at cost Disposals at carrying value Depreciation Carrying value at end of the year Cost Accumulated depreciation 12 TOTAL 30  Downloaded from Stanmorephysics.com QUESTION 2 PLUMSTEAD HARDWARE STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 28 FEBRUARY 2023 Sales Cost of sales Gross profit Other operating income Bad debts recovered 1 342 Discount received 2 340 Gross operating income Operating expenses Discount allowed 1 990 Insurance 10 560 Rent expense Advertising Stationery Salaries and wages UIF contributions Bad debts Water and electricity Telephone Bank charges Operating profit Profit before interest expense Net profit for the year 45 TOTAL 45  Downloaded from Stanmorephysics.com QUESTION 3 3.1 3.1.1 3.1.2 3.1.3 3.1.4 4 3.2 HOPPITY POPPITY TRADERS Extract of the Statement of Financial Position on 28 February 2023 EQUITY AND LIABILITIES Partners' Equity Capital Current accounts Non-current liabilities Current liabilities Trade and other payables Total equity and liabilities 21 3.3 IRONMAN TOY STORE CURRENT ACCOUNTS Iron Man Profit per Income Statement Partners’ salaries Partners’ bonus Interest on capital Primary distribution of profits Final distribution of profits 125 000 Drawings during the year Retained income for the year Retained income at the beginning of the year Retained income at end of the year  Downloaded from Stanmorephysics.com Calculations: Interest on capital : Iron Interest on capital : Man Salary : Iron Bonus: Man Final distribution : Iron 25 TOTAL 50  Downloaded from Stanmorephysics.com QUESTION 4 4.1 CALCULATION OF FINANCIAL INDICATORS FOR 2023 4.1.1 Percentage operating expenses on turnover: 2 4.1.2 Acid-test ratio: 4 4.1.3 Debt-equity ratio: 3 4.1.4 % returns on average partners' equity: 4  Downloaded from Stanmorephysics.com 4.2 Comment on the liquidity position of the business for 2023. Quote ONE financial indicator and figures to support your answer. 4 4.3 The business changed their policy with regard to the profit mark-up from 2022 to 2023. What was the change in policy? What are the risks in this regard and what effect did this change have on the business's income? 4 4.4 Does the business have good control over their expenses? Quote ONE financial indicator and figures to support your answer. Yes/No 4 TOTAL 25 TOTAL: 150  Downloaded from Stanmorephysics.com PROVINCIAL EXAMINATION NOVEMBER 2023 GRADE 11 MARKING GUIDELINES ACCOUNTING PAPER 1 9 pages  Downloaded from Stanmorephysics.com MARKING PRINCIPLES: 1. Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item (no penalty for misplaced items). No double penalty is applied. 2. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item. 3. Give full marks for correct answer. If the answer is incorrect, mark the workings provided. 4. If a pre-adjustment figure is shown as a final figure, allocate the part-mark as a working mark for that figure (not the method mark for the answer). 5. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. If no + or – sign or bracket is provided, assume that the figure is positive. 6. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates. 7. Where penalties are applied, the marks for that section of the question cannot be a final negative. 8. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer and at least one part must be correct before awarding the mark. 9. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part. Indicate with an . 10. Be aware of candidates who provide valid alternatives beyond the marking guidelines. 11. Codes: f = foreign item; p = placement/presentation.  Downloaded from Stanmorephysics.com QUESTION 1 1.1 1.1.1 True √ 1.1.2 True √ 1.1.3 False √ 1.1.4 False √ 1.1.5 False √ 5 1.2.1 Depreciation on equipment AMOUNT Old Equipment: 162 000√ 810 000 x 20% New Equipment: 6 000  120 000 x 20% x 3/12 √= Total depreciation for the year: 168 000  4 1.2.2 EXTRACT OF FIXED ASSET REGISTER OF GOODY SHOE TRADERS FOR VEHICLES SOLD DELIVERY VEHICLE (SOLD) COST PRICE = R320 000 Current Accumulated Carrying Date Calculation depreciation depreciation value 31 Dec 2021 16 000 16 000 304 000 √ 31 Dec 2022 30 400 46 400  273 600 304 000 x 10/100 √ 60 080  259 920 273 600 x 10/100 x 1 Jul 2023 13 680 6/12 √ 5  Downloaded from Stanmorephysics.com 1.2.3 Depreciation on old vehicles AMOUNT SOLD 13 680 See 1.2.2 above OLD 1 060 000 – 46 400 = 1 013 600 134 640  2 360 000 – 1 013 600 = 1 346 400 √√ x 10% = Total depreciation for the year: 148 320  4 1.2.4 FIXED/TANGIBLE ASSETS VEHICLES EQUIPMENT Carrying value at beginning of the year 1 620 000 √ 570 000 √ Cost 2 680 000 810 000 Accumulated depreciation (1 060 000) (240 000) Movements Additions at cost 120 000 √ Disposals at carrying value see 1.2.2 above (259 920)  Depreciation (148 320)  (168 000)  Carrying value at end of the year 1 211 760  522 000  Cost 2 360 000  930 000  Accumulated depreciation (1 148 240)  (408 000)  12 TOTAL 30  Downloaded from Stanmorephysics.com QUESTION 2 PLUMSTEAD HARDWARE STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 28 FEBRUARY 2023 Sales (1 797 600 – 9 860 √ – 1 575 √) 1 786 165  Cost of sales (1 027 200 – 900 √√) (1 026 300)  Gross profit 759 865  Other operating income 4 190  Bad debts recovered 1 342 Discount received 2 340 Trading stock surplus (352 800 + 900 √ – 1 300 √ – 12 000 √√ – 340 740 √) 340  Provision for bad debts adjustment (1 086 – 918) 168 √√ Gross operating income 764 055  Operating expenses (479 122)  Discount allowed 1 990 Insurance 10 560 Rent expense (59 850 – 4 950 √√) 54 900  Advertising (10 800 – 240 √) 10 560  Stationery (3 490 – 480 √) 3 010  Salaries and wages (324 000 + 12 000 √) 336 000  UIF contributions (3 240 + 120 √) 3 360  Bad debts (5 670 + 3 425 √) 9 095  Water and electricity (17 724 + 1 098 √) 18 822  Telephone (12 336 + 662 √) 12 998  Bank charges (1 120 + 320) 1 440 √√ Depreciation 13 987 √ Loss due to theft 2 400 √√ Operating profit 284 933  Interest income 170  Profit before interest expense 285 103  Interest expense (53 250 – 50 000) (3 250) √ Net profit for the year 281 853  45 TOTAL 45  Downloaded from Stanmorephysics.com QUESTION 3 3.1 3.1.1 C√ 3.1.2 A√ 3.1.3 B√ 3.1.4 E√ 4 3.2 HOPPITY POPPITY TRADERS Extract of the Statement of Financial Position on 28 February 2023 EQUITY AND LIABILITIES Partners' Equity 408 670  Capital (200 000 √ + 170 000 √ + 30 000 √) 400 000  Current accounts (10 360 √ – 1 690 √) 8 670  Non-current liabilities 31 000 Loan: ABSA (40 000 – 9 000) 31 000 √√ Current liabilities total CA/2 69 020 √√ Trade and other payables (24 070 √ + 3 500 √ + 500 √ + 700 √) 28 770  Bank overdraft balancing 31 250 √ Short term loan see loan above 9 000  Total equity and liabilities 508 690  21 3.3 IRONMAN TOY STORE CURRENT ACCOUNTS Iron Man Profit per Income Statement 629 550 715 000 Partners’ salaries 349 800 √ 425 000 √ Partners’ bonuses 12 000 √ 51 000 √ Interest on capital 80 250 √√ 114 000 √√ Primary distribution of profits 442 050 590 000 Final distribution of profits 187 500 √ 125 000 Drawings during the year *(25 000 + 35 000) *(60 000) √√ (30 000) √ Retained income for the year 569 550 685 000 Retained income at beginning of the year (2 300) √ 4 500 √ Retained income at end of the year 567 250 689 500  Downloaded from Stanmorephysics.com Calculations: Interest on capital: Iron Interest on capital: Man 535 000 x 15/100 = 80 250 760 000 x 15/100 = 114 000 Salary: Iron Bonus: Man 110/100 x 26 500 = 29 150 x 12 12/100 x 425 000 = 51 000 = 349 800 Final distribution: Iron 125 000 = 2/5 125 000 x 3/2 = 187 500 25 TOTAL 50  Downloaded from Stanmorephysics.com QUESTION 4 4.1: CALCULATION OF FINANCIAL INDICATORS FOR 2023 4.1.1 Percentage operating expenses on turnover: 512 640 x 100 3 213 000 1 = 15,96% √√ 2 4.1.2 Acid-test ratio: 430 560 √ – 357 660 √ : 201 150 √ of 31 700 + 41 200 72 900 two marks : 201 150 0,36 : 1 4 4.1.3 Debt-equity ratio: 380 000 √ : 496 610 √ 0, 77 : 1 3 4.1.4 % returns on average partners' equity: 505 160 √ x 100 (496 610 + 273 500) / 2 √√ 1 385 055 (two marks) = 131,19%  4 4.2 Comment on the liquidity position of the business for 2023. Quote ONE financial indicator and figureS to support your answer. Ratio ✓ Trend ✓ Conclusion ✓✓ The business is facing liquidity problems. The acid test ratio has decreased from 0,7 : 1 in 2022 to 0,36 : 1 in 2023. The current ratio has decreased form 2,2 : 1 in 2022 to 2,1 : 1 in 2023. This is an indication that too much of the business’s assets is tied up in trading stock and the business might face liquidity problems should the stock become obsolete. 4  Downloaded from Stanmorephysics.com 4.3 The business changed their policy with regard to the profit mark-up from 2022 to 2023. What was the change in policy? What are the risks in this regard and what effect did this change have on the business's income? The business increased their profit mark-up from 40% in 2022 to 50% in 2023. √ The increase in mark-up resulted in an increase in price. This may force customers to go elsewhere to buy./The effect on the change resulted in the net profit increasing in 2023. √√ 4 4.4 Does the business have good control over their expenses? Quote ONE financial indicator and figures to support your answer. Yes √ The business’s operating expenses on profit decreased from 17,3% in 2022 to 15,96% in 2023. √ This is a clear indication that the business is managing its expenses better in the current year. √√ 4 TOTAL 25 TOTAL: 150