# Accounting Grade 12 Paper 1 FS Prelim 2022 Memo > Grade 12 Accounting Paper 1 memorandum from the FS Prelim 2022, 11 pages. Read online or get the free PDF download, question paper linked when available. - Page: https://www.hlayiso.com/library/2022-fs-p1-memo/bf5cc3ef-ca32-47ed-8ff5-8b7e0fcfb622 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Document type: Memorandum - Year: 2022 - Exam period: FS Prelim - Paper: 1 - Curriculum: CAPS - Pages: 11 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 12](https://www.hlayiso.com/library/grade-12) › [Accounting](https://www.hlayiso.com/library/grade-12/accounting) › [Accounting Grade 12 Paper 1 FS Prelim 2022 Memo](https://www.hlayiso.com/library/2022-fs-p1-memo/bf5cc3ef-ca32-47ed-8ff5-8b7e0fcfb622) ## About this document Accounting · Grade 12 · FS Prelim · 2022. Memorandum, 11 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com PREPARATORY EXAMINATION GRADE 12 ACCOUNTING P1 SEPTEMBER 2022 MARKS: 150 MARKING GUIDELINES 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 foreign item penalty for a misplaced item). No double penalty 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. Full marks for the 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 for the working 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 different qualities of answers from candidates. 7. This memorandum is not for public distribution as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions. 8. Where penalties are applied, the marks for that section of the question cannot be a final negative. 9. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark. 10. 'Operation' means 'Check operation'. 'One part correct' means 'Operation & one part correct'. 11. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect, at least in part. In such cases, do not award the method mark. Indicate by way of . 12. Be aware that some candidates provide valid alternatives beyond the memorandum. 13. Codes: f = foreign item; p = placement/presentation. These marking guidelines consist of 10 pages. Copyright reserved Please turn over ### Page 2 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 2 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines QUESTION 1 1.1 Choose the description from COLUMN B that matches the Formatted: Justified concept in COLUMN A. Write only the letter (A–D) next to the question numbers (1.1.1 to 1.1.4) in the ANSWER BOOK. 1.1.1 C  Formatted Table 1.1.2 A  1.1.3 D 1.1.4 B 4 1.1 Calculate the correct net profit after tax for the year ended Formatted: Font: Bold 30 June 2022. Indicate a + for an increase and a – for a Formatted Table decrease. Formatted Table 4 4 Complete the following for the year ended 28 February 2022: 1.2.1 Statement of Comprehensive Income (30) 1.2.2 Notes to the Statement of Financial Position for:  Ordinary share capital (7)  Retained income (7) 1.2.3 Equity and Liabilities section of the Statement of Financial Position. (12) 1.2 GLOBAL TRADING LTD 1.2.1 Calculation of the correct net profit after tax Accept bracket instead of – If no sign, accept + Positive/Negative effect & figure must be correct. Foreign entries –1 (max -2) Incorrect net profit 1 089 238 i. 10 600 – 7 800  + 2 800 22 Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 3 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines Cost (8 712 ÷ 90% ÷ 160%) = 6 050 ii. 8 712  – 6050   + 2 662 Operation, one part correct iii. 5 600 + 5 600  + 11 200 iv.  + 5 400 648 000 ÷ 54 x 6  OR v. 648 000 ÷ 4,5 ÷ 2  - 72 000 Operation, one part correct vi.  - 30 000 vii.  - 3 300  x 4  viii. 7 200 ÷ 6 = 1 200 Operation,  + 4 800 one part correct Correct net profit before tax  1 010 800 Operation, one part correct Income tax  (333 564) Net profit after tax Check operation, NP – tax  677 236 1.2.2 SHARE CAPITAL Shares issued at the beginning of 3 000 000 the year 3 900 000 one part correct   (250 000) Shares bought back @ R1,30  (325 000)   1 000 000 Shares issued at R3,20  3 200 000 one part correct  3 750 000 6 775 000 7 1.2.3 RETAINED INCOME Balance at the beginning of the year 1 190 264  Net profit after tax see 1.2.1 677 236 250 000 shares repurchased at R1,20   One part correct, must be negative/brackets (300 000)  Dividends One part correct, must be negative/brackets (385 000)  Interim 110 000  Final (0,10 x 2 750 000 ) One part correct 275 000 Balance at the end of the year  Operation, one part correct 1 182 500 8 1.2.4 GLOBAL TRADING LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 4 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines EQUITY AND LIABILITIES  ORDINARY SHAREHOLDERS' EQUITY Operation 7 957 500 Ordinary share capital 6 775 000 See 1.2.3  Retained income (2) 1 182 500  NON-CURRENT LIABILITIES 243 000  Loan: Custom Bank (354 000  – 111 000) (4) 243 000  CURRENT LIABILITIES Operation 669 714 Trade and other payables (166 800 + #5 450 +  72 000+ 2 600 + #3 300 ) *250 150 directors fee deb led rent income Operation, one part correct SARS – Income tax (333 564 – 300 000)  Operation, one part correct *33 564  Shareholders' for dividends See 1.2.3 *275 000  Shortterm loan *111 000 TOTAL EQUITY AND LIABILITIES  (13) *Items under CL may be combined 8 870 214 19 60 #In come received in avance (5 450 + 3 300 = 8 750) two marks Foreign entries –1 (max –2) Presentation/Incorrect or incomplete details –1 (max –2) Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 5 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines QUESTION 2 2.1 2.1.1 Internal auditor  2.1.3 Director  2.1.2 Independent auditor  2.1.4 Cash Flow Statement  4 2.2.1 (i) Calculate the mark-up % for the year 9 000 000  – 5 625 000  x 100 5 625 000  two marks 3 375 000 x 100 = 60% Operation, one part correct 5 625 000 4 (ii) Calculate the % return on shareholders' equity 931 000________ x 100 ½  (6 450 000 + 7 500 000 ) = 931 000_ x 100 = 13,4% Operation, one part correct 6 975 000 three marks 5 (iii) Calculate the net asset value per share 7 500 000  x 100 700 000  = 1 071,4 / cents per share/ R10,71 per share Operation, one part correct 3 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 6 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines 2.2.2 Calculate the missing amounts in the Cash Flow Statement represented by letters (a) to (d). Indicate whether the amount is an inflow or outflow. No Workings Answer (a) Bal 18 000 I/tax 399 000  Bank 349 000 (349 000) Operation, one Bal 32 000 part correct and the answer must 18 000  – 399 000  + 32 000  OR be in brackets – 18 000 + 399 000 – 32 000 mark line 5 (b)  4 326 000  + 380 000  – 3 357 000  – 140 000 1 489 000 OR Operation, one 1 489 000 + 3 357 000 – 380 000 – part correct and the answer must 4 326 000 mark line be without brackets 5 (c)  5 950 000 + 425 000  – 5 200 000  1 175 000 Operation, one part correct and OR the answer must be without 100 000 x 11,75  brackets 4 (d)  (587 500) 50 000  x 11,75  Operation, one part correct and the answer must be in brackets 3 2.2.3 (i) The total dividends for the financial year. 201 500  + 105 000 – 71 500 = 235 000  one part correct OR 4 one mark one mark one mark one part correct 1 250 000 + 931 000 – 162 500 – 1 550 000 = 468 500 (ii) The balance of the loan on 30 June 2022. 950 000 + 850 000 = 1 800 000 OR 7 500 000 x 0,24 = 1 800 000 2 Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 7 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines 2.2.4 The Cash Flow Statement highlights some important decisions taken by the directors. Explain TWO of these crucial decisions. Quote figures to support your answer. Explain how these decisions would benefit the company. TWO decisions with figures   Explanation of decisions benefiting the company   Decisions (with figures) Explanation of benefits Fixed assets purchased for Improve profit-earning R3 357 000 capacity/existing tangible assets may be obsolete. Issue of additional shares for To finance the purchasing of R1 175 000 tangible assets. Buy back of shares for Keeps existing shareholders R425 000 happy/ Dissatisfied shareholders can leave the company. Increase in loan by R850 000 To finance the fixed assets/ purchases of tangible assets. 6 45 Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 8 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines QUESTION 3 3.1.1 Zee Ltd is more liquid than Ryan Ltd. Quote and explain TWO financial indicators (with figures) to prove your agreement. Quoting of indicator   Explanation by Zee   Comparison with Ryan    Current ratio of Zee Ltd is 1,7 : 1 and of Ryan Ltd is 5,8 : 1. Zee Ltd has enough current assets to cover its current liabilities, whereas Ryan Ltd is holding too much of its funds in the form of current assets, which may not result in a return for the business.  Acid test ratio of Zee Ltd is 0,8 : 1, and of Ryan Ltd is 3,7 : 1. Even if Zee Ltd is not able to sell all of his trading stock, he should still be able to cover his short term debt. Ryan Ltd is holding much of his current assets in the form of trading stock (stockpiling).  Debtors' collection period for Ryan Ltd is 55 days whereas Zee Ltd is collecting from their debtors within 26 days. Debtors are paying Zee Ltd much sooner than the debtors of Ryan Ltd. 6 3.1.2 Which company uses more loans? Quote and explain a financial indicator to support your answer. Explain whether this is a good idea or not. Zee Ltd  Debt/equity ratio is 1,9 : 1 for Zee Ltd and 0,2 : 1 for Ryan Ltd Explain whether this is a good idea or not. It is not a good idea.  Return on capital employed for Zee Ltd is 12,4 % which means that the return he is earning is lower than the interest he is paying on the loan, 14% (negative gearing)  6 3.1.3 Explain why you think the market price of Ryan Ltd's shares is much better than that of Zee Ltd. Quote and explain TWO financial indicators to support your answer. Comparing market price and NAV of Zee Ltd   Comparing market price and NAV of Ryan Ltd   Market price of Zee Ltd is 590 cents which are lower than the net asset value of 625 cents, OR the market price is 35 cents lower than the net asset value. Market price of Ryan Ltd is 755 cents which are higher than the net asset value of 605 cents, OR the market price is 150 cents higher than the net asset value. Ryan Ltd is thus able to fetch a price higher than the value of the shares in the books of the company. 4 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 9 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines 3.1.4 Which company is more likely to expand its business? Explain your answer by using relevant calculations. Dividend pay-out rate of Zee Ltd: 182 x 100 = 101,7%  179 Dividend pay-out rate of Ryan Ltd: 537 x 100 = 66,1%  813 Ryan Ltd is giving 66,1% and Zee Ltd 101,7% of their profit as dividends; therefore, Ryan Ltd will be more likely than Zee Ltd to expand their business.  5 3.1.5 Ryan Ltd has a better percentage return, earnings and dividends than Zee Ltd. Explain THREE financial indicators to support this opinion. Financial indicator    Figures    Explanation     % ROSHE for Ryan Ltd (28,5%) is much higher than that of Zee Ltd (11,5%).  EPS for Ryan Ltd is 813 cents whereas Zee Ltd is only earning 179 cents per share.  DPS for Ryan Ltd is 637 cents whereas Zee Ltd it is only 182 cents per share 9 30 Copyright reserved Please turn over ### Page 10 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 10 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines QUESTION 4 4.1 Comment on the audit reports of both companies. If you want to buy shares in a company, explain how the report will affect your decision concerning the shares you would purchase in the company. Metsi Ltd: Comment on  Explanation  Metsi Ltd received an unqualified report which means that you can rely on the financial information in the financial statements decide on purchasing the shares. Just Water Ltd: Comment on  Explanation  Just Water Ltd received a disclaimer audit report. It means that Peter cannot rely fully on the financial statements in deciding on investing in the company. In which company should you rather invest? Metsi Ltd  5 4.2 4.2.1 C  4.2.3 D  4.2.2 A  4.2.4 B  4 4.3 The purpose of a business rescue plan is to provide a company with temporary supervision and protection against its creditors, to give them a 'breathing space' to reorganise and restructure its financial affairs. Name TWO parties who might be affected by a business rescue plan. Any 2  (one mark each) Creditors, shareholders, employees, trade unions, SARS, Banks, Directors 2 4.4 Who is the audit report addressed to? Give a reason for your answer. The shareholders.  They are the owners of the company and have appointed the auditors.  2 Copyright reserved Please turn over ### Page 11 Downloaded from hlayiso.com Downloaded f rom St anmorephysics. com Accounting P1 11 FS/September 2022 Grade 12 Prep. Exam. Marking Guidelines 4.5 Give TWO examples of audit evidence that the auditors would have required to complete the audit. 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