Accounting Grade 12 KZN June 2021 Memo

| MARKS: 100 | MARKING PRINCIPLES: | 1. | | ke | J 12. | 13. KWAZULU-NATAL PROVINCE EDUCATION REPUBLIC OF SOUTH AFRICA NATIONAL SENIOR CERTIFICATE Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item. No double penalty applied. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item. Full marks for correct answer. If answer incorrect, mark the workings provided. If a pre-adjustment figure is shown as the final figure, award one mark. Not the method mark for the answer. Note: |] if figures are stipulated in memo for components of workings, these do not carry the method for final answer. | 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. | Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from | candidates. | This memorandum is not for public distribution, as certain items might imply incorrect treatment. The adjustments | made are due to nuances in a certain question. | Where penalties are applied, the marks for that section of the question cannot be a final negative. | Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer | before awarding the mark. | Operation’ means ‘Check operation’. ‘One part correct’ means ‘Operation & one part correct’. Note: check | operation must be +,-,x,+, or per candidates operation. | In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect, indicate | with a EJ. Note: do not award marks for workings if numerator and denominator are swapped-this also applies to | ratios. Be aware of candidates who provide valid alternatives beyond the marking guideline. Codes: f=foreign item; p=placement l This memorandum consists of 9 pages CE EEE

Downloaded from hlayiso.com Accountins Common Test June 2021 QUESTION 1 1.1 | Indicate whether the following statements are TRUE or FALSE. Write only ‘True’ or ‘False’ next to the question number. 1.1.1 | True ¥ 1.1.2 | True v 1.1.3 | False v 1.2.1 | How can the preparation of a debtor’s collection schedule and Debtor’s | age analysis assist Njabulo in controlling of debtors. Debtor’s collection schedule: ree Project anticipated receipts from debtors. Ensure that debtors keep to terms of their accounts. Act if the debtors do not comply with credit terms Compare anticipated budget with actual budgets. Debtor’s age analysis assist: pees e Effective method of credit control. e Action can be taken against debtors who do not comply by charging interest/ legal action. e Bad debts can be minimized. e __Make decision based on age analysis of the debtor(s). 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 Common Test June 2021 NSC 1.2.2] Sobantu Traders have the pay slip of all their debtors. What other information should they obtain before allowing customers to open accounts? State TWO points with a reason in each case. Information to be obtained Yo Reason Vv v Prompt communication of statement of account. To be able to trace debtors not adhering to credit terms and conditions. To avoid fictitious debtors. Proof of residence To be able to do a proper background / Address check on each new debtor. Constant reminders of amount owed. To ensure that statements are sent to correct addresses. : , To track the debtor if other information is Contact details of family / friend incorrect / changes. To check how the debtor is managing his Telephone numbers Bank statement / balance finances. Ensure that correct personal details of Identity document customers are on record Cradit references’ Ll on that they will not sell to bad Credit history To check credit worthiness Prompt communication of statements of Email address account 1.2.3] Calculate the percentage of debtors complying with the credit terms. 60 040 v OR 240 160_ =80% 300 200v 300 200 = 20% WM Onepart correct 100% — 80% = 20% OR 12% + 8% = 20% 1.2.4] Explain TWO measures to improve collection from debtors Patina una won vv Monthly statements must be sent out/ emailed on time Offer higher discount for early payments. Add interest on overdue account. Do not sell to debtors exceeding the credit limit/ not up to date with payments. « Send SMS reminders to debtors. Employ service of an attorney or debt collector / sue the debtor. « Encourage debtors to pay by debit order. Copyright reserved Please turn over

Accounting 1.3.1 Downloaded fram hlayiSo.comanmon test June 2021 Provide THREE points for good internal control over creditors vv Vv e Assess the efficiency of the creditors clerk in order to prevent errors from occurring Ensure that creditors are paid on time to make use of discounts Make full use of credit terms to assist cash flow Division of duties amongst members of the accounting department so that one person serves as a check on another Reconcile the balance on the creditors control account with the total of creditors’ list to ensure accuracy on a monthly basis Th ment of int of individual credi m nciled agreed) wi ir unts in ledger Conduct internal audits to minimise the possibility of fraud or error / Check documents (e.g. invoices and credit notes) to ensure accuracy of calculations and entries Ensure that items ordered from creditors are correctly received (i.e. quantities, condition, price) ' Ensure that all purchases are correctly authorized (i.e. procurement policy) | 3 1.3.2 CREDITORS LEDGER OF STATEMENT FROM NGUBANE MATHEBULA TRADERS SUPPLIERS 17 925 29 400 A. +2100V B. + 875 v Cc. - 500 vv (8100 +3 100) D. +6 200 vv E. - 7000v 24 500 4 24 500 M1 | 9 Copyright reserved ‘pe TS RSTO oO SG a TS TOSS STATES 30 Please turn over

Downloaded from hlayiso.com Accounti-~ Common Test June 2021 QUESTION 2: INVENTORY SYSTEMS a1 Calculate the value of closing stock using the FIFO method of stock valuation. 120 units OR 80 x 7875 = R630 000 5 80 x R6 500 = R520 000 v 40 000 x 6875 = R275 000 R905 000 40 x R5500 = R220 000 ¥ 120x1375 = R165000 Vv = R905 000,21 Operation one part correct 2.1.2 | Calculate Cost of Sales using the FIFO method. O/S + purchases + Import duties - closing stock 70 000¥ + R1930000¥ + 522500V -905 000M See21 R1 617 500 WZ Operation one part comect 5 2.1.3 | Calculate the stock turnover rate of air conditioner (use the average stock). Using units 1617 500Y OR _258 YY (70 000Y + 905 000v) ¥A20 +120) 487 500 Three marks 3.6 times 5 3 timesf Operation one part correct 2.1.4 Calculate the number of units missing. 20¥ + 380¥ = 400 available for sale 5 - 258” sold -120V physical count = 22 missing Copyright reserved Please turn over

____——C Downloaded from hlayiso.com Accounting 6 Common Test June 2021 NSC 2.1.5 | What solutions would you offer to the CEO to help solve the problem of the missing units? Provide TWO good solutions. Solution 1: Convert to Perpetual ~ Regular stock counts and better internal control over stock. Solution 2: Documentation _——» proper authorisation, receiving of goods ¥ Do not accept installation of security cameras and division of duties 2 2.1.6 | Cool Traders uses the Periodic Stock system. Briefly explain to the CEO how the Perpetual Stock System works. In your explanation state TWO main advantages of the Perpetual Stock System. Explanation: ¥ Cost of sale is recorded with each sale. Advantages: V¥ Trading Stock balance is adjusted immediately. Deficits can be identified timeously through physical stock taking. Gross profit can be calculated at any point in time without physical stock taking. 2.1.7 |e In your opinion, why do you think CEO wants to increase the value of cost of sales in the financial statements? It decreases gross profit / net profit and therefore decreases tax liability.“ e Provide ONE reason why the bookkeeper says that alternating between two methods of valuing stock does not comply with the requirements of GAAP | Any acceptable answer 7 e The business must stay consistent from year to the next in order to compare results. e Not ethically correct to manipulate profit by changing policies Copyright reserved Please turn over

Downtoaded from hiayiso.com Accour Common Test June 2021 2.2 GYMSLIM 2.2.1 | Calculate the number of days of stock on-hand for Gym Bags. Gym Bags are sold at a mark-up of 25% on cost. The average stock amounted to R153 600. OR using number of 153 600% x 365 units 260 400V 1 %(290 + 804) x 365 215 days 21 onepartcomect accept 216 days 930 1 215 days 2.2.2 | Identify ONE different problem in respect of the manner in which each product is managed. Quote figures to support your answer. In each case offer practical advice. Problem and figures | Possible solution’ Vv ¥ ¥YVvv One per item los | Sweatbands | 120 + 5 600-4 800 Internal control measures to = 920-810 =110 safeguard the stock e.g. missing Security tags, cameras, display close to paying point, physical stock-taking on a continuous basis Towels 840 X R125 = e Investigate and apply R105 000 disciplinary measures. R105 000 —R100 00 = |* Check at exit that the payment R5 000 cash missing for the towels appears on the pay slip / invoice. Check money before banking. * Division of duties Gym Bags Too much stock on e Revisit sales policy and hand - 215/216 days implement measures to encourage sales. © Discontinue selling gym bags since sales are low even though the mark-up percentage is only 25%. 35 Copyright reserved Please turn over

———— Bownloaded from htayiso.com—_—_WH—— ACCOUM ay o Common Test June 2021 NSC QUESTION 3 3.1.1 | Production Cost Statement on 28 February 2021 Direct Materials Cost 510 100 | ¥ (16 400 + 529 575v — 19 000 v — 21 600 V+ 4 725v) Direct Labour Cost ( 115 200” + 77 600Y + 17 280”) 210 080 | M1 Prime Cost 720 180 | Mi Factory Overhead Cost —] 63 230 | Ml Total Cost of Production Operation 783 410 | Work-in Process at the beginning of the year 19 400 802 810 Work-in Process at the end of the year (22 810) Cost of Production of Finished Good 780 000 | MJ (25 600 + 782 700v — 28 300~ ) | Operation one part comect 16 3.1.2 |_ Abridged Income Statement for the year ended 28 February 2021. Sales 9 78 375 Cost of sales (782 700) ¥ Gross profit 195 675 Selling and distribution cost (86 000 — 1 000) (85 000) vv Administration cost (25 000 + 1 000) (26 000) vv 6 Net profit Operation one part correct 84 675M 3.2.1 | Calculate the break-even point for the year ended 28 February 2021. ‘348 500 two marks 246 000 + 102 500v 150¥ -70Vv 80 three marks 4356 or 4 357! units Operation one part corect 3.2.2 | Should the business be satisfied with the number of units that are pad aceite ole ‘Compare BEP with units produce and sold see 3.2.1 They are producing 4 100 and the break-even is 4 356/4 357 units. oR Produce 256/257 units less than what is required to break-even. 3 Copyright reserved Please turn over

Accounting Downloaded from hlayiso.Corfemmon Test June 2021 3.2 . e price of direct material, the direct material cost per unit decreased from R32 to R27. Give valid reasons for the decrease. vv e Better training of workers resulted to less wastage. e Raw material obtained at a cheaper price. e Greater care or efficiency in the use of raw material resulted to less wastage. e Hise control over use of raw material. e Training of workers. e Less wastage. 3.2.4 | Despite the fact that there was no increase in wages during the year, the direct labour cost per unit increased from R20 to R28. Give a valid reason for the increase. Vv More overtime Decrease in productivity, working slower, demotivated or lazy workers Poor supervision of workers. e Unproductive workers due to power cuts TOTAL MARKS 35 Copyright reserved