Accounting Grade 12 Paper 2 KZN June 2022 Memo

Downloaded from hlayiso.com KWAZULU-NATAL PROVINCE EDUCATION REPUBLIC OF SOUTH AFRICA � �---------------------------------------------�� �-=-� � ,, ACCOUNTING II MARKING GUIDELINE JUNE 2022 NATIONAL SENIOR CERTIFICATE MARKS: 150 MARKING PRINCIPLES: [ GRADE 12 ] 1. 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. 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 correct answer. If answer incorrect, mark the workings provided. 4. 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. 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. 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. 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'. Note: check operation must be+, -, x, -:-, or per candidates operation. 11. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect, indicate with a�- Note: do not award marks for workings if numerator and denominator are swapped-this also applies to ratios. 12. Be aware of candidates who provide valid alternatives beyond the marking guideline. 13. Codes: f=foreign item; p=placement. This memorandum consists of 10 pages

Downloaded from hlayiso.com June common test 2022 QUESTION 1 1.1 DEBTORS RECONCILIATION 1.1.1 Mention TWO actions that the bookkeeper must follow when he/she discovers differences between the Debtors Control Account and the Debtors List. Any TWO valid actions✓ ✓ • Reconciling debtors' list with debtors' control account. • Identify if the error affects the control account or the DL or both. • Identify if one, two or more accounts are affected. • Make GJ entries to correct posting errors (wrong debtors/ amounts over or under cast/ wrong general ledger accounts) 83 • For single entry errors (amounts), make the necessary correction and adjust the balances. 1.1.2 Calculate the correct balance of the Debtors Control Account and the Debtors List by completing the table provided. DEBTORS CONTROL ACCOUNT 11 020 (i) -120✓ (ii) +90✓ (iii) +80✓ 83 (iv) +530 ✓ 11 600 0 One part correct DEBTORS LIST: Show the adjustment amount next to each debtor. M. Malinga (4 510 + 90✓ - 1 320✓ - 50✓) 3 230 Ii'. One part correc D. Zondi (3 270 + 80✓) 3 350✓ P. Mshibe ( 940 + 530✓ ) 1470✓ M. Tuko (2 230 + 1 320✓) 3 550✓ One part correct 11600 0 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounswnioaded from Stanmorephysics.com June common test 2022 1.2 DEBTORS’ AGE ANALYSIS 1.2.1 | Explain why you would be concerned about the management of debtors in this business. Quote relevant figures in your answer. SAA e 11 600/23 200 = 50% of debtors are more than 60 days overdue. e Only 20% (4 640/23 200) of debtors are current. e¢ 10% (2 320/23 200) of debtors are likely to be written off as irrecoverable. e Debtors are not taking advantage of the 5% discount for early payments. e Collection policy needs to be more vigilant (Collect more within 30 days). 1.2.2 | Provide TWO internal control measures that the business can use to improve the collection of money from debtors. Any TWO valid explanations. vv vv e Shared responsibilities in preparing documents (statements, receipts, invoices) and depositing of money. e If the organisation is big, could assign a set number of debtors per employee. Could result in personalised service and constant monitoring. e Aseparate screening department (follow-up and approval of credit). e Computerised messages to inform debtors not up to date with payments. e Send SMS and reminders. e Charge interest on late payments (overdue accounts) e Give more discounts for early payments/remind them of discounts e Division of duties 4 pb Copyright reserved Please turn over

Accouns@wnloaded from Stanmorerhysics.com 1.3 1.3.1 1.3.2 1.3.3 Downloaded from hlayiso.com CREDITORS’ RECONCILIATION Reconcile the Creditors Ledger account of ZZ Suppliers in the books of Masiya Traders with the statement received. Commence with the opening balances as provided in the ANSWER BOOK. June common test 2022 CREDITORS' LEDGER STATEMENT OF ACCOUNT 47 064 40 271 (i) 11 808 — 10 296 (1 512) vv ” One Y) 816 + 816 (1 632) vv (iii) 1000 v (2532) v¥ (iv) (6 929) v (v) (981) v (vi) 29 v 4526 v 12 One part correct 9652 4 Onepartconet 39.652 I 12 Name TWO benefits of using electronic funds transfer (EFT) system. Any TWO suitable valid responses ¥ ¥ e Cheaper than debit orders e Less fraud and theft. e Payments can be made at any time 2 e Funds available quicker 2 State TWO consequences for the business if they do not pay the amount due to creditors on time. Any TWO suitable valid responses vv e Business can be charged interest e Credit rating of the business can be affected 2 ¢ The business can be blacklisted 2 TOTAL MARKS 40 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accouswnloaded from Stanmorephysics.com June common test 2022 QUESTION 2 2.1 2.1.1 | CY 2.1.2 | AY 3 v 2.1.3 |B 3 2.2.1 Calculate the value of the closing stock for the two stock items: . Cricket Pads (using the FIFO-method): e | (70x R750) ¥ + (180 x R720) ¥ + (170 x R690) ¥ = R299 400 M OR onemark = onemark == one mark 52 500 + 129 600 + 117 300 = R299 400 one method mark 4 4 . Cricket Balls (using the weighted average method). 3 310 x 18,50 5 250 Vv + 61 235 VV +12 115 Vv x 660 ¥ 350 V+ 6 200 v six one 12 X 660 = R7 920 [2] one part conect 8 8 2.2.2 Calculations the following for Cricket Pads: e| Cost of sale 75 0OOY + 418 800Y — 299 400 M1 = 194 400 M7 bne part conect 4 4 e| Gross profit ‘See COS 274 500 Y — 194 400 M1 = 80 100 M1 One part correct 3 3 e| Mark up percentage 80 100 M/194 400M x =100/1 = 41.2% MI 3 3 e| Stock holding period in days 75 000 + 299 400 Ye V (374 400) 4 Xx 365 194 400 M1 See cos 1 = 351,5 days M1 One partcorrect Accept 351/352 days 4 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accouswnloaded from StanmorephYsics.com June common test 2022 2.2.3. The owner suspects that there is no sufficient control over the stock. Provide figures from the information to confirm his suspicions. Show calculations to support your answers. e} He suspects that the Cricket Pads being sold are not very popular amongst clients. rAny relevant comment with figures 77 e The stock holding period is 351.5 days/ Only 305/725 stock sold. e New brands of Cricket Pads will make stock on hand of 420 irrelevant. e The business is purchasing 600 units of additional stock with the older stock of 125 still unsold. 2 He suspects that Cricket Balls are being stolen. Balls missing 350 V+ 6 200Y — 5 700Y — 660 Y=190 M1 One part comect 2.2.4 | Explain TWO changes you would make to the business should you decide to become a partner. Refer to specific information taken from the question for each of the suggested changes. Any TWO valid changes ¥¥ Vv" e Implement stricter control measures to cut down on theft. e Prevent pile up of Cricket Pads. e Advertise more and do better marketing to increase sales. e See if Cricket balls can’t be purchased locally in order to prevent import tax and the influence of increasing exchange rates. e Consider importing Cricket Pads as it seems that clients do not like the local products. 4 > TOTAL MARKS 40 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accouswnloaded from Stanmorephysics.com June common test 2022 QUESTION 3 3.1 THE SHOE FACTORY 3.1.1 | Direct Materials Cost Opening stock 464 000Y Net purchases 990 000Y Carriage on purchases (85 000 + 5 000) Two or nothing 90 000v¥ 1 544 000 Less: Closing stock (403 650 — 72 000) Two ornothing | (331 650) VY 7 Direct material cost One partcorrect } 1 212 350M 7 3.1.2 | Factory Overhead Cost Indirect salary: Factory manager 180 000 ¥ Indirect material / Consumable stores 63 800 (22 400 + 57 200 Y— 5 200 Y— 10 600 VY) One part correct Water and electricity (285 200 + 24 000) X 60% — Twoornothing 185 520V¥ Factory insurance((17 400 x 70 / 30) Two or nothing 40 600V ¥ Sundry factory expenses(205 000 — 5000) Two or nothing 200 000V ¥ Depreciation on factory plant (72 000 + 20000) =‘ Twoornothing 92 000VY 7 One part correct 761 920M |{ 14 Copyright reserved Please turn over

Accouswnloaded from Stanmorephysics.com Downloaded from hlayiso.com June common test 2022 3.1.3 | Production Cost Statement on 28 February 2022 Direct Materials Cost See 3.1.1 1 212 3504 Direct Labour Cost 957 922M (908 000 + 45 800 “ + 458 v +3 664 v) One part correct Prime Cost Operation 2170 272M Factory Overhead Cost See 3.1.2 761 920M Total Cost of Production Operation 2 932 192M) Work-in Process at the beginning of the year 44 000” 2 976 192 Work-in Process at the end of the year —_ One part correct (21 792) Zi rF Cost of Production of Finished Good (R1 200 x 2 462) 2954 400vv || 42 Copyright reserved Please turn over

Downloaded from hlayiso.com Accouswnloaded from Stanmorephysics.com June common test 2022 3.2 ZONDI’S MANUFACTURERS 3.2.1 | Calculate the break-even point for the year ended 31 May 2022. 118 800 two marks 67 200 ¥_+51 600 ¥ 910 V-577v (180 + 252 + 145) one mark -180 — 252 - 145 one mark 333 two marks = 356,7 OR 357 M1 units One part correct Accept 356 5 ol 3.2.2 | Compare and comment on the break-even point and the production level achieved over the last two years. Quote figures. Comparison of the BEP with the level of production of 2022 v Business produced 63 units (15%) more than the BEP (420 — 357) see The business made a profit on only 63 units (420 — 357) compared to 105 units last year (540 — 435) vv BEP decreased from 435 units in 2021 to 357 units in 2022 (78 units; 17,9%). The business produced 120 units (22,2%) less than last year (540 — 420). 4 hb 3.2.3 | Give TWO reasons for the increase in direct material cost. Suggest ONE way to control this cost. Anytwo valid reasons, Y ¥ e Inflationary increases / transport costs / increase in fuel price / scarcity. e Wastage due to poor workmanship. e Theft of material (in the factory) due to poor internal controls. e Change in exchange rate (if raw materials imported) e Changed suppliers (more expensive) / Better quality raw materials e Look for cheaper suppliers without compromising quality. e Negotiate transport and delivery discounts. e Take advantage of bulk discounts. e Recycle waste material / use off-cuts e Train and supervise workers to minimise wastage. e Control stock regularly to identify shortages. e Buy stock as required to avoid stock piling and possible theft. 3 ow TOTAL MARKS 45 45 Copyright reserved

Downloaded from hlayiso.com Accouwnloaded from Stanmorgghysics.com June common test 2022 QUESTION 4 4.1.1 | The management is not satisfied with control and management of fixed assets. Explain THREE internal control measures to be applied to correct the situation. Any THREE explanations: vv e There must be efficient control over storage and use of fixed assets. e Asset registers must be updated regularly. e Records must be kept for all fixed assets. e Fixed assets must be procured with proper authorisation. « Physical counting and inspection of assets. e Rotation of employees involved in fixed asset management and control. vv vv e Division of duties in fixed asset management and control. = 4.1.2 Asset Disposal 2021 | 30 | Equipment “ | 60 000¥ |] 2021 | 30 | Accumulated depreciation 27 744M Sept Sept on Equipment One part correct (25 440 V+ 2 304v) Bank ¥ 12 256V Loss on sale of an asset 20 000M 10 v Operation 60 000 Operation Both totals M1 60 000 10 4.2 | Identify ONE problem in relation to each branch, quoting figures/amounts to support the problem. In each case, offer the owner advice on how to solve the problem. Branch Comment and figures Advice VV VV VV vvv HLATHI Theft occurring. There are 40 | Improve internal control (SIFISO) cameras missing (380 — 340) Value of shortage of Do regular physical stock takings R320 000 (8 000 x 40) and stock checks THOLENI Too much stock on hand. Restrict amount of stock on hand (NOLWAZ]I) | Only 300 out of 1 600 have as this could lead to theft or out of been sold. date stock. Stock will become obsolete / | Instead of paying Nolwazi a set out of date, 1 280 left over monthly income he should pay her on commission based on sales. MAQANDA | R640 000 cash was stolen Improve internal control/Use EFT 9 (XOLANI) to reduce cash handling/ Py Copyright reserved TOTAL MARKS Division of duties $$ 25 25 Please turn over