Accounting-Grade-12-NSC-MEMO-P1-May-June-2025-Limpopo.pdf

LAM POPrRO®O PROVINCIAL GOVERNMENT REPUBLIC OF SOUTH AFRICA DEPARTMENT OF EDUCATION NATIONAL SENIOR CERTIFICATE PCO eee ee eee eee eee eer Cee eee eee eee 4 ACCOUNTING P1 i! JUNE 2025 u i w MARKS: 150 MARKING PRINCIPLES: Unless otherwise stated, give full marks for correct answer. If answer is incorrect, mark workings. 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). Note: if figures are stipulated in memo for components of workings, these do not carry the method mark for final answer as well. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. lf 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. If candidates provide more that the required number of responses, inspect all responses to give benefit to the candidate. Penalties may be applied for foreign entries if candidates earn full marks on a question (max -2 per Q). This memorandum is not for public distribution; as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions. Where penalties are applied, the marks for that section of the question cannot be a final negative. Where method marks are awarded for operation, marker must inspect reasonableness of answer. Operation means 'check operation’. 'One part correct’ means operation and one part correct. Note: check operation must be +, -, x, +, or per memo. In calculations, do not award marks for workings if numerator & denominator are swapped — this also applies to ratios. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part. Indicate with a Kl. Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one comment could contain different aspects. Codes: f = foreign item; p = placement/presentation. These marking guidelines consist of 10 pages. Copyright reserved Please turn over

Marking Guidelines QUESTION 1 HE-LECTRIX LTD Statement of Comprehensive Income for the year ended 28 February 2025 1.1 Limpopo DoE/June 2025 Sales (15 900 000 — 420 000 + 7 500) 15 487 500 Vv M* | Cost of sales (5 300 000 + 2 500 v) (6 302 500) Trading stock deficit (695 000-6 200M- 2 500 M- 672 000v) Gross profit Gfemnen ss 10 185 000M Operating income 512 864 Fee income Balancing figure 369 800 M Rent income (89 200 + 8 400 vv) 97 600 M* Discount received (45 500 — 800) 44 700 v Provision for bad debts adjustment (23 500 — 22 736 ) 764 Vv Operating gross profit (GP +01) operation 8 10 697 864M Operating expenses operation (8 687 674)M1 Insurance . oe 62 400 Sundry expenses 3 392 585 Employers contributions 136 740 Salaries & wages 4 094 100 Discount allowed 23 850 Consumable stores (45 700 + 1 250V — 2 250v — 1 960v) 42740M Water Account (79 400 + 7 200) 86 600 v Bank charges (4 290 + 390) 4 680 v Advertising (516 000 + 32 000) 548 000 v 91600 x 55/100 50 480 M* Bad debts (45 200 + 5 280 v) Donations 6 200 vm* 14 300M* Depreciation (1 160 000-935 000 — 1) 224 999 vv M* Operating profit 19 Interest income Operating profit before interest expense Interest expense Net profit before tax Income tax 3 5 550 000 v x 26c V Net profit after tax (4 800 000+1 000 000-250 000) a Copyright reserved 1 443 000M 35 Please turn over

1.2 1.3 Limpopo DoE/June 2025 Marking Guidelines RETAINED INCOME Balance at the beginning 16 420 000 Net profit after tax Ea 1 443 000 M4 Buy back of shares (250 000 x 1,95 vv) ignore brackets ila Ordinary share dividends ‘operation, ignore brackets (1 972 000)¥ Interim dividends 928 000 Final 5 800 0007 % 18 conts _ 1 044 000M Inspect, operation from.top, must subtract SBB and OSD 15 403 500M ; EQUITY AND LIABILITIES SHAREHOLDER EQUITY Spain 59 803 500M Ordinary share capital 44 400 000 Retained Income see 1.2 15 403 500M 2 NON - CURRENT LIABILITIES 3 288 000 Loan 312 000 v — 24 000V 288 000M* CURRENT LIABILITIES ‘operation 1 845 600M Trade & other Payables 714 000Y +8 000 v +32 000v -7 500Y + 7200v) 753 700M* Deposit: Rent income 9 000Y Current portion of loan 24 000V Shareholders for dividends sep4,2 1 044 000M SARS (Income tax) 14 900V TOTAL EQUITY AND LIABILITIES 412 61 937 100M 17 TOTAL MARKS 60 Copyright reserved Please turn over

Marking Guidelines Limpopo DoE/June 2025 QUESTION 2 2.1. DISKOMLTD 2.1.1. | ORDINARY SHARE CAPITAL 2100000%70% | | h 1 May 2024 4 704 000VV 1.470 000” issued shares on jay 20 04 000 300 000 ¥ Shares issued during the year 2 022 000M Balancing figure 230 000 874 000)M ( ) Repurchase of shares. ASP: R3,80VM Ec’ 1540 000M | Issued shares on 30 April 2025 5 852 000 ] 9 2.1.2 Complete the following section of the Cash Flow Statement: CASH EFFECTS FROM OPERATING ACTIVITIES 3 24 360 M Cash generated by operations 1 317 100 Interest paid must be in brackets (78 000)” Dividends paid 318 600 V+ 265 000¥ 583 600)k OR -318 600 — 265 000 Taxation paid (637 G30 x s)two marks 36 600Y +273 270¥vV + 21270V¥ aT OR -36 600 — 273 270- 21 270 10 CASH EFFECTS FROM INVESTING ACTIVITIES (487 900) 41* Purchase of fixed assets (830 400)v* Proceeds from the sale of fixed assets 152 500 M 4 094 900Y + 413 000 Y - 830 400V - 3 830 000 v¥ -4 094 900 — 413 000 + 830 400 + 3 830 000 | Be alert to alternative methods of calculations e.g. Ledger format. Change in financial assets 190 000 7 “must be in brackets Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines 2.1.3. Calculate the following Financial Indicators on 30 April 2025: Current ratio WORKINGS ANSWER all 3 figures for 2 marks, 2 or nothing 28:14 [720 800+ 240 000 + 56 600]Y v: 360 700 ¥ 1017 400 two marks % Return on average total capital employed (ROTCE) WORKINGS ANSWER 637 630 x (100+70) two marks (910 900 + 78 000) three marks 988 900V¥V 4 x 100 15,1% MJ ¥4(7 100 000Y +6 000 800v) 6 550 400 two marks *100 is not one part correct Sons Do not award marks if numerator and denominator are swapped 6 Interim dividends per share WORKINGS ANSWER 318 600Y 100 (1 470 000Msee 2a + 300 000 V) * 18c 1770 000 two marks *100 is not one part correct Do not award marks if numerator and denominator are swapped 4 TOTAL MARKS 40 Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines QUESTION 3: INTERPRETATION OF COMPANY INFORMATION 3.1 Match the concepts listed in COLUMN A with an explanation provided in COLUMN B. Write only the letter (A—G) next to each number (3.1.1-3.1.5) in the ANSWER BOOK. 3.1.1 | Dv 3.1.2 [Av 3.1.3 | Gv 3.1.4 | Bv 3.4.5 | Cv 3.2.1 | The CEO of Anna Ltd believes that the company has shown a positive improvement in their liquidity situation because the current ratio has increased significantly to 3,6 : 1. Explain whether he is correct or not by quoting ONE other financial indicator, with figures, to support your answer. Financial indicator v (with figures and trend) ~ Comment vv The acid test ratio is consistent at 1,5: 1. Anna Ltd is not managing stock effectively. Whilst they would not experience cash flow problems, they are holding too much stock which may contribute to low profitability. 3.2.2 | Calculate and compare the dividend pay-out policy of each company. Dividend pay-out rate is 52% (45/86) in 2025, compared to 81% ELSALTD — | (65/80) in 2024 vv Dividend pay-out rate is 86% (60/70) in 2025 and 86% (62/72) in SRRACTE 2024. Anna Ltd has maintained the dividend pay-out rate at 86% Vv 4 Give a possible reason why one company opted to adjust their policy. Any ONE reason v¥ Part marks forincomplete/partial answers SSCS Elsa Ltd is retaining earnings to concentrate on growth. Elsa Ltd wants to ease cash-flow problems and continue managing expenses to improve profitability. Elsa Ltd wants to sustain the trend of increasing profitability and return on equity so shareholders can see the long-term prospects of the company. 2 Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines 3.2.3 | Elsa Ltd decided to increase their loans during the current financial year, whilst Anna Ltd chose to maintain their existing loans. Quote ONE financial indicator and comment on the degree of gearing of each company. ELSA LTD ROTCEY ROTCE increased from 12% to 15% (do not accept debtiequity ratio) with figures & trendy Comment: The loan is being effectively used to improve profitability. The interest Interest rate & rate on loans is 13%. Business is positively geared so the decision Positively geared v Interpretation ~ was appropriate. ANNA LTD ROTCEv ROTCE decreased from 13% to 11,7% (donot accept debt:equity ratio) with figures & trend” Comment: The loan is not being effectively used as the business is negatively Interest rate & geared with the interest on loans at 13%. It would be wise to start Negatively geared ¥ Interpretation v paying back the loan or improve strategies to improve profitability. 3.2.4 | A shareholder of Anna Ltd is worried because the value of the company's shares has gone down. Describe the reason for his concern. Quote and explain TWO financial indicators to support your answer. Comparing market price and NAV of Anna Lid v v The market price of 582 cents is lower than the net asset value (NAV) of 610 cents/ the market price is 28 cents lower than the net asset value (NAV)/ NAV is 28 cents higher than the market price. Comment ¥ ¥ This reflects that public demand for shares is low/ public confidence in the company has decreased. Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines 3.2.5 | Clarify why Olaf's decision was a mistake. Discuss his % shareholding and provide TWO additional reasons, supported by figures or calculations, to support your explanation. %SHAREHOLDING: His %shareholding dropped from 48% ~v(528 000/ 1 100 000) to 44% vv (528 000/1 200 000). TWO POINTS: point’ v _ figure/calculationv v ¢ The additional shares would have made him the majority shareholder with 612 000 shares = 51% (612 000/1 200 000) of the total shares issued. ¢ His net worth/potential profit/ investment would have increased because the shares offered at 410 cents are 172 cents below the market price of 582 cents, and he would gain 84 000 x R1,72 = R144 480. e« He had enough money to buy the 84 000 new shares x R4,10 = R344 400. TOTAL MARKS 35 Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines QUESTION 4: GAAP, AUDIT REPORT AND CORPORATE GOVERNANCE 41 GAAP PRINCIPLES Match the GAAP principles listed in COLUMN A with an explanation provided in COLUMN B. Write only the letter (A-E) next to each number (4.1.1-4.1.4) in the ANSWER BOOK. 4.1.1 Dv 4.1.2 Ev 4.1.3 Bv 4.1.4 Aw 4 4.2 AUDIT REPORT AND CORPORATE GOVERNANCE 4.2.1 | Explain the SIG of the independent auditor. Valld explanatior ve He/she is expected to express an unbiased opinion on the reliability of the financial statements of a company after conducting an audit. = 4.2.2 | Did Barbi Ltd receive a qualified, unqualified, or a disclaimer audit report? Explain your choice. Qualified Report v An exception to fair presentation was noted in the form of the marketing expenses/ Not everything in the report was 100% correct/ the financial statements were fairly represented except for the marketing expenses. LAny valid explanation for qualified, 2 4.2.3. | To whom is the audit report addressed? The shareholdersv pease eter Copyright reserved Please turn over

Limpopo DoE/June 2025 Marking Guidelines 4.2.4 | The marketing expense on the Statement of Comprehensive Income relates to a spa and beauty treatment day arranged by the CEO and her friends. The CEO recommended to the external auditor that this transaction be excluded. e The external auditor was not willing to do this. Briefly explain why he feels this way. anaes Professional integrity / reputation of the auditing firm / agreeing to corruption/ he does not want to be unethical/ this is against the law. 2 e Provide TWO consequences for the auditor if he agrees to the recommendation of the CEO 0 Vi uence Hae Same type o e May face disciplinary action (hearing/ suspension/ dismissal/ fine). e Bad reputation/ image. e May be struck off the roll and will not be able to practice in the future. e Legal action can be taken against the auditor. 4 TOTAL MARKS 15 TOTAL: 150 Copyright reserved