# Accounting Grade 11 Eastern Cape November 2018 Memo (Eng) > Grade 11 Accounting memorandum from the Eastern Cape November 2018 (English), 12 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-gr11-memo-nov2018-english/b587ec23-d849-4bd9-8c45-cf7742f8fa4a - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 11 - Language: English - Document type: Memorandum - Year: 2018 - Exam period: Eastern Cape November - Curriculum: CAPS - Pages: 12 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 11](https://www.hlayiso.com/library/grade-11) › [Accounting](https://www.hlayiso.com/library/grade-11/accounting) › [Accounting Grade 11 Eastern Cape November 2018 Memo (Eng)](https://www.hlayiso.com/library/accounting-gr11-memo-nov2018-english/b587ec23-d849-4bd9-8c45-cf7742f8fa4a) ## About this document Accounting · Grade 11 · Eastern Cape November · 2018 · English. Memorandum, 12 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 NATIONAL SENIOR CERTIFICATE GRADE 11 NOVEMBER 2018 ACCOUNTING MARKING GUIDELINE MARKS: 300 GENERAL PRINCIPLES: 1 Where calculations are required, award full marks for the final answer. If the answer is incorrect, mark the workings provided. If the working amount is shown as a final answer, award the relevant marks allocated for workings (Income statement), and not the method mark for the answer. 2 Method marks are denoted by .  For calculations and final totals, at least one part of the workings must be correct for the method mark to be earned. For totals – inspect operation and reasonableness of answer before awarding the mark.  In cases where answers of previous questions must be used (carried forward answers), check the transfer.  Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. If no sign (+/-) or bracket is provided, assume that the figure is positive.  In awarding method marks, ensure that full marks are not awarded for any item that is incorrect at least in part. 3 For questions requiring explanations and comments (2 marks or more), award part-marks for incomplete answers. A good comment will normally mention and explain a point. Be aware of candidates who provide valid alternatives beyond the marking guideline, and of different ways to say the same thing. Note that the marking guideline only offer suggested answers. 4 Where penalties are applied (such as foreign items, misplaced items, omitted details, etc.), the marks for that section cannot be a negative. Penalties will be indicated next to the relevant questions where applicable. 5 Educators are advised to work through the question paper and compare with this guideline, before marking. If adjustments are necessary, do so within the framework of the mark allocation. This marking guideline consists of 12 pages. ### Page 2 Downloaded from hlayiso.com 2 ACCOUNTING (EC/NOVEMBER 2018) QUESTION 1: RECONCILIATIONS 1.1 1.1.1 True  1.1.2 True  1.1.3 False  1.1.4 False  4 1.2.1 CASH RECEIPTS JOURNAL CASH PAYMENTS JOURNAL SUNDRY ACCOUNT AMOUNT SUNDRY ACCOUNT AMOUNT Drawings  4 000  Bank charges  1 120  Interest income  450  Debtors control  6 250  Creditors control  1 080  * 10 1.2.2 BANK RECONCILIATION STATEMENT ON 31 OCTOBER 2018 DEBIT CREDIT Dr balance as per statement 12 190  Outstanding deposit: * 15 300  17/10/2018 13 220  29/10/2018 10 400  Outstanding cheques: No. 1265 9 700  No. 1460 4 280  No. 1496 5 730  Cr error on statement 530  Balance as per bank account 7 550  Balancing figure 39 450 39 450  one part correct 10 * If concept of Prudence is considered, the deposit of R15 300 can be entered in the CPJ to be cancelled and NOT shown as outstanding deposit in the BRS. (1 mark) Adapt totals and Balance as per Bank account. 1.2.3 PROBLEM IDENTIFIED SOLUTION     Deposits are not being done Check deposits regularly / Poor internal control of Arrange bank notification for all cash. transactions Create rules and procedures for staff to follow. Monitor. The cashier has no supervision/ is Division of duties. in charge of too many related Authorisation for transactions functions. Regular and random audit of records. 6 Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com (EC/NOVEMBER 2018) ACCOUNTING 3 1.3 CREDITORS RECONCILIATION Creditors Ledger Account Statement 20 000 21 500 A (5 450 – 4 450) – 1 000  B + 230  C (520 x 2) – 1 040  D – 4 190  E - 5 500  15 000  one part correct 15 000  one part correct 10 Accept brackets for negative amounts (if used). -1 on each line for foreign items (only if a mark is scored on that line). Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com 4 ACCOUNTING (EC/NOVEMBER 2018) QUESTION 2: INCOME STATEMENT VUZI TRADERS Income Statement for the year ended 28 February 2018 Sales 2 362 575  + 17 425  2 380 000  Cost of Sales 1 389 750  + 10 250  (1 400 000) * GROSS PROFIT 980 000 * 8 Other income 17 000 * Trading stock surplus 58 680 – 10 250  – 49 540  1 110 * Bad debts recovered 2 180  + 820  3 000  Provision for bad debts adjustment 3 070 – 2 480 590 * Rent income 30 750  – 18 450  12 300 * Gross income 997 000 * 14 Operating expenses (442 000) * Packing material 27 300  Bad debts 8 770  + 2 730  11 500 * Telephone 15 675  + 1 245  16 920  Insurance 23 720  - 840  22 880 * Advertising 19 660  – 1 160  18 500 * Salaries and wages 285 200  Water and electricity 27 360  Sundry expenses 32 340  Operating profit 555 000 * 21 Interest income 240 000 x 8% x 10/12 16 000 * Profit before interest expense 571 000 * Interest expense 210 500 – 179 500 (31 000) * Net profit for the year 540 000 * 7 50 -1 each for foreign items (all balance sheet accounts) Max. -2 *one part correct Misplaced items must be marked wrong. Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com (EC/NOVEMBER 2018) ACCOUNTING 5 QUESTION 3: PARTNERSHIPS 3.1 CURRENT ACCOUNT NOTE THANDI XOLA TOTAL Salaries 148 800  152 520  301 320 Interest on capital 64 000  74 000  138 000 Bonus 10 680  0 10 680 Total primary distribution 223 480 226 520  450 000  Final distribution of profits 10 000  11 250  21 250  Net profit for the year 233 480  237 770  471 250 Drawings (148 800) (127 100) (275 900) Retained income for the year 84 680  110 670  195 350 Balance (1 March 2017) 22 320  (17 670)  4 650 Balance (28 February 2018) 107 000  93 000  200 000  25 Accept alternative formats/presentations. *one part correct. Check operation for all totals. Allocate the marks accordingly. 3.2 Calculate the following financial indicators: 3.2.1 CURRENT RATIO 407 340  : 226 300  = 1,8 : 1  one part correct 3 3.2.2 AVERAGE DEBTORS COLLECTION PERIOD 193 250 three marks ½  (219 200  + 167 300 ) x 365 = 44 days  one part correct 6 1 602 000  3.2.3 PARTNER XOLA’S RETURN ON EQUITY 237 770  x 100 ½  (900 000  + 1 000 000  + 93 000  3.1. – 17 670 ) 1 900 000  two marks 75 330  two marks  987 665 four marks 7 = 24,1 or 23%  one part correct 3.2.4 DEBT/EQUITY RATIO 2 000 000 800 000 : (1 800 000 + 200 000  3.1.) = 0,4 : 1  one part correct 4 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com 6 ACCOUNTING (EC/NOVEMBER 2018) 3.3 Comment on the liquidity of the business. Quote TWO financial indicators (with figures) to support your comment. Financial indicators with trends   (any TWO) General comment  Current ratio decreased from 2,2 : 1 to 1,8 : 1 (see 3.2.1) Acid test ratio decreased from 1,2 : 1 to 0,8 : 1 Debtors average collection period worsened from 40 days to 44 days. (see 3.2.2) The financial indicators suggest that the liquidity position was satisfactory but is moving towards an unsatisfactory position. At this trend, the business may experience problems in meeting its short term debts in the future. The acid test ratio indicates that the business holds too much stock; debtors are taking too long to settle their accounts. 6 3.4 3.4.1 Explain Thandi’s concern about the “unlimited liability” principle. Explanation of unlimited liability  part marks for unclear/incomplete answers A partnership business is not recognised as being separate from the owners. The partners are therefore responsible for all debts of the business. This liability may extend beyond their investment (equity) in the partnership. He is concerned that his private possessions (assets) may be used to settle the debts of the business. 3 3.4.2 Provide TWO points to support Xola’s suggestion. Quote ONE financial indicator (with figures) in your motivation. TWO valid points   ONE relevant financial indicator (with figures)  The debt/equity ratio improved from 0,5 : 1 to 0,4 : 1 (see 3.2.4) The business is lowly geared (not making extensive use of loans) Increasing the loan by R200 000 will cause the debt/equity ratio to move to 0,5 : 1 (which is still reasonable). If the extensions to the business contributes to greater profitability and the return on capital employed is greater than the interest on the loan, then Xola’s suggestion can be supported. 6 Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com (EC/NOVEMBER 2018) ACCOUNTING 7 QUESTION 4: COST ACCOUNTING 4.1.1 Calculate: Direct material cost 23 400 + 342 600 – 15 700 + 155 000 + 19 400 – 38 700 = 486 000        one part correct 7 Calculate: Direct labour cost 4 x 1 440 x R35 201 600  one part correct Contributions (201 600 x 10%) 20 160  one part correct Overtime 33 600  TOTAL 255 360  one part correct 5 4.1.2 GENERAL LEDGER OF STRUMPHER MANUFACTURERS WORK-IN-PROGRESS STOCK balancing figure 2017 2018 Mar 1 Balance 45 300  Feb 28 Finished goods stock  1 000 000  2018 Feb 28 Direct material cost  486 000 * Balance c/d 60 000  Direct labour cost  255 360 * Factory overhead cost  273 340  1 060 000 1 060 000 2018 Mar 1 Balance b/d 60 000 *see 4.1.1 10 FINISHED GOODS STOCK 2017 1 Balance b/d 27 000  2018 28 Cost of sales  1 005 000  Mar Feb Balancing figure 2018 28 Work-in-progress  1 000 000  Balance c/d 22 000  Feb See above 1 027 000 1 027 000 2018 Mar 1 Balance b/d 22 000 6 Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com 8 ACCOUNTING (EC/NOVEMBER 2018) 4.1.3 The owner is concerned about the control of workers in production. Provide TWO points that justify his concern. Quote relevant figures. TWO valid points   figures   Point 1: Figures Normal hours worked is below the They should be working 1 800 contracted hours. hours (40 x 45) but only 1 440 hours are worked (80%). Point 2: Figures Overtime hours are relatively high. 640/1 440 (44,4%) 640/1 800 (35,5%) 6 4.2 JOLENE AND JUANE DOLLS 4.2.1 Calculate the break-even point. 76 500 two marks 30 600  + 45 900  = 2 550 units  one part correct 95  – (23 + 14 + 28 ) 30 four marks 7 Comment on findings ` Comparison of units produced to BEP  comment  The number of units produced and sold is equal to the BEP of 2 550 The business managed to break-even but was not able to make a profit. 3 4.2.2 Did the business achieve the targeted gross profit on sales? Provide a calculation to support your opinion. Yes/No  Or: if unit costs are used. DMC + DLC + FOHC (71 400 + 58 650 + 45 900) x 150%  (28 + 23 + 18) x 150% 175 950  one part correct one part correct = 263 925 expected sales  = 103,50 expected selling price 242 250 actual sales  95,00 actual selling price 6 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com (EC/NOVEMBER 2018) ACCOUNTING 9 QUESTION 5: BUDGETING 5.1 Calculate the percentage of goods sold on credit during December 2018. 72 000  x 100 = 60%  one part correct 120 000  72 000 + 48 000 two or nothing 4 5.2 Complete the Debtors Collection Schedule for December 2018. MONTH CREDIT SALES NOVEMBER DECEMBER October 57 600 23 040 10 368  November 64 800 24 624 25 920  December 72 000 72 000 x 40% x 95% 27 360 * CASH FROM DEBTORS 63 648 * 8 *one part correct 5.3 CASH BUDGET FOR DECEMBER 2018 RECEIPTS DECEMBER 2018 Cash Sales 48 000  Cash from debtors see 5.2.2 63 648  Rent income 139 680/12  x 105%  12 222 * Interest on fixed deposit 9 600/3 3 200  TOTAL RECEIPTS 127 070 * 8 PAYMENTS Payments to creditors (43 200 + 64 800)  x 100/150  72 000 * Salaries (10 100 x 180% x 2) + 10 100  46 460 * 36 360 one part correct Drawings 1 800  Operating expenses 18 000  Bank charges 1 620  Advertising 3 600 Repairs and maintenance 5 000 TOTAL PAYMENTS 148 480 * 12 SURPLUS/(SHORTFALL) (21 410) * Bank (Opening Balance) 98 330  BANK (CLOSING BALANCE) (76 920) * 3 23 -1 Foreign entries (max -2) any non-cash item *one part correct Copyright reserved Please turn over ### Page 10 Downloaded from hlayiso.com 10 ACCOUNTING (EC/NOVEMBER 2018) 5.4 ITEM   REASON   Well controlled: Drawings: The owner is considerate of the Drawings cash flow situation. Advertising The business was in a shortfall position. Advertising: This budget was well used. Only R50 over. The business expects sales to increase during November and December so they must advertise. Not well controlled: Repairs: It is always wise to use the Repairs and maintenance maintenance budget so that equipment/assets Rent income work more efficiently over a longer period. Rent: Poor collection policy. Tenant is taking advantage. Affecting the cash flow. 6 Provide the owner with different internal control measures he can use to exercise better control over any TWO items on this list. ONE point on each item.   Repairs and maintenance: Have regular inspections on assets needing maintenance. Take out a contract to ensure that this is done regularly. Rent income: Stipulate a fixed date for payment – or interest will apply. Suggest a debit order to ensure payment is made. Send reminder before due date. 4 Copyright reserved Please turn over ### Page 11 Downloaded from hlayiso.com (EC/NOVEMBER 2018) ACCOUNTING 11 QUESTION 6: CLUBS AND FIXED ASSETS 6.1.1 GENERAL LEDGER OF MOUNT COKE HIKING CLUB MEMBERSHIP FEES ACCOUNT 2017 2017 Jan 1 Accrued income 5 400  Jan 1 Deferred income 1 500  Dec 31 Bank  (refund) 450  Dec 31 Bank 61 500  Fees written off  Deferred income  2 700  1 800  5 400 – 3 600 Income and Expenditure  66 150 * Honorarium  300  Accrued income  9 600  Balancing figure 74 700 74 700 201 x 300 + 3 x 150 + 14 x 300 + 8 x 150 60 300  450  4 200  1 200  20 6.1.2 Explain why they feel this way. Provide ONE point.  The constitution provides for ½ or full amount payable. It would be unfair to a new member who joins in November. Some members will benefit more than others depending on the number of months in the club. 2 Provide a solution to solve this problem. ONE point  The club can use a pro-rata system whereby members only pay for the unexpired months in the first year. The club can calculate a monthly fee and make the fees payable monthly. 2 6.2.1 Calculate: Total depreciation on vehicles 924 000  x 20% = 184 800  one part correct 1 090 000 – 924 000 = 166 000  x 20% x 9/12  = 24 900  one part correct Total: 209 700 one part correct 6 Calculate: Total depreciation on equipment (380 000 – 167 000 ) x 15% = 31 950  one part correct 213 000 two marks 3 Copyright reserved Please turn over ### Page 12 Downloaded from hlayiso.com 12 ACCOUNTING (EC/NOVEMBER 2018) 6.2.2 FIXED ASSETS NOTE VEHICLES EQUIPMENT CARRYING VALUE (1 March 2017) 369 600  213 000 Cost 924 000 380 000 Accumulated Depreciation (554 400) (167 000) Movements: Additions 166 000  0 Disposals 0 (11 390) Depreciation see 6.2.1 (209 700) (31 950) CARRYING VALUE (28 February 2018) 325 900 169 660 Cost 1 090 000 335 000 Accumulated Depreciation (764 100) (165 340) 9 6.2.3 Provide TWO points to justify her concern. Quote figures. TWO valid points (with figures)   related to sales increase  Petrol and oil cost is now 48 900 (75% more than last year); Sales only increased by 192 400 (26%). Repairs and maintenance increased by 12 920 (40%). 6 Give Shirley TWO points of advice on how she can exercise better control over the use of the vehicles. TWO points   Install tracking devices on vehicles. Use a logbook to keep records on mileage. Make provision for all vehicles parked at business after finishing time. Allocate vehicles to drivers on a daily basis. 4 6.2.4 The six drivers are dissatisfied with their salary increase and are planning a strict. Are they justified? Explain. Yes/No  Explanation  It is only 5% which is below the inflation rate. 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