Accounting Grade 12 NSC November 2016 Memo (English)

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING NOVEMBER 2016 MEMORANDUM MARKS: 300 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 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 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). Note: If figures are stipulated in memo for components of workings, these do not carry the method mark for final answer as well e.g. R715 500 in Q1.2.1 would be 2 marks in final answer, not 3. 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 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’. Note: Check operation means must be +, –, x or ÷ per memo, but some items can be + or – such as Prov for bad debts adj. 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. This memorandum consists of 15 pages. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 2 DBE/November 2016 NSC – Memorandum QUESTION 1 1.1 1.1.1 Administration cost  Accept recognisable abbreviations 1.1.2 Direct material cost  1.1.3 Selling and distribution cost  1.1.4 Factory overhead cost  4 1.2.1 Calculate direct labour cost. one part correct one part correct one part correct 384 000  31 500  44 160   one part correct; must be x 5 (1 920 x 5 x R40) + (90 x 5 x 70) + (384 000 x 11,5%) = R459 660 OR 76 800 6 300 8 832 5 x [(1 920 x R40) + (90 x 70)] + (76 800 x 11,5%)] = R459 660 one mark one mark one mark one mark one m/mark one m/mark one m/mark one m/mark one part correct; must be x 5 one part correct one part correct one part correct 8 Calculate direct material cost. R106,00 four marks 715 500 two marks 131 500 + 584 000 x 5 500 = 583 000 One part correct 1 350 + 5 400 6 750 two marks 6 OR Total VC – DLC – S&DC 1 260 000 two marks see 1.2.1; one method mark two marks one method mark; one part correct [4 200 x 300] – 459 660 – 217 340 = 583 000 OR OS + P – (CS x R106) – (Theft x R106) one mark one mark two marks one mark one method mark; one part correct 131 500 + 584 000 – 99 640 – 32 860 = 583 000 1.2.2 Production Cost Statement for the year ended 29 February 2016: No abbreviations accepted *Direct material cost (need not be first) See 1.2.1 583 000  *Direct labour cost See 1.2.1 459 660  Prime cost If = DMC + DLC 1 042 660  *Factory overhead cost 343 340  Cost of production of finished goods 1 386 000  Operation one part correct 8 *Must be correctly placed to get the mark for details; method mark for figure marked independently Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 DBE/November 2016 NSC – Memorandum 1.2.3 Calculate the break-even point for 2016. 570 000 two marks 343 340 + 226 660 450  – 300  150 two marks = 3 800 units One part correct; cannot be negative; cannot be R or c 5 Explain whether the owner should be concerned or not. Provide figures. Yes / No is part of the explanation (No marks) Comment comparing BEP to level of production  Comparative figures (Refer to answer above; must compare BEP to production) Possible answers: • The owner should not be concerned as the business produced (4 200 – 3 800) 400 units more than the break-even point. • The owner should be concerned as the business produced (4 200 – 3 800) only 400 units more than the break-even point. • Owner should be concerned because they make a profit on 400 units only. 3 1.2.4 The owner is not satisfied with the internal control of the raw material (fabric). STOREROOM: FACTORY: Raw material stolen Raw material wasted 6 750 two marks two marks for both 4 200 x 1,25 1 350  + 5 400  5 500  – 5 250  – 5 500  – 940  = 250 metres  One part correct CALCULATION: = 310 metres  One part correct OR 200 units two marks one mark one m/mark metres of fabric Answer must be less than 6 750 [(5 500 / 1,25) – 4 200] X 1,25 = 250 m 4 400 metres one mark Total: 5 marks Answer must be less than 5 500 Total: 4 marks Improve physical security / Train workers to improve Regular stock counts / efficiency / STRATEGY Foreman to supervise / sign Use new updated equipment One point each / account for all raw (new technology) /   materials taken from the Be alert to storeroom / division of Use templates in cutting alternative valid fabric to reduce offcuts / responses. duties. recycle the offcuts. Improve supervision. Do not accept theft. 11 TOTAL MARKS 45 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 4 DBE/November 2016 NSC – Memorandum QUESTION 2 2.1.1 Simply Traders have the telephone numbers 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. Do not accept Telephone number of debtor Can award two marks if information & reason is in same sentence Information to be Reason   obtained   Salary advice slip / Proof To set credit limits for each possible debtor Point 1 of income To determine affordability 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 check Point 2 / Address on each new debtor Constant reminders of amount owed To ensure that statements are sent to correct addresses Contact details of family / To track the debtor if other information is OR friend incorrect / changes To check how the debtor is managing his OR Bank statement / balance finances Ensure that correct personal details of OR Identity document customers are on record Credit references / To check that they will not sell to bad debtors OR Credit history To check credit worthiness Prompt communication of statements of OR Email address account 4 2.1.2 Calculate the correct closing balance of the Debtors' Control Account on 31 October 2016. 179 500 + 2 500– 900+ 500 = 181 600One part correct 21 000 – 20 100 Signs cannot be reversed as this is Dr / Cr OR: T-account with figures on correct sides Debit (plus) Credit (minus) 179 500 *900 2 500 Balance c/d 181 600 500 *OR 21 000 credit with 20 100 debit 6 Calculate the correct amounts owing by debtors. Calculations Balance 8 500 two marks J Ramsay (D2) 37 500 – 4 300+ 8 350+ 150 *41 700 + 3 600 – 6 300 both for two marks W Smith (D3) 19 500 + 2 500– 2 700 *19 300 10 200 two marks C Prince (D5) 3 900 + 4 300+ 5 100 + 5 100 *18 400 *One part correct for method mark 12 Copyright reserved Please turn over

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Downloaded from hlayiso.com Accounting 6 DBE/November 2016 NSC – Memorandum 2.1.3 Calculate the percentage of debtors complying with the credit terms. 58 600 two marks ignore 142 600 – not applicable to compliance 35 300 + 23 300 OR 142 600 = 70,9% one mark 201 200 201 200 one mark = 29,1 %  One part correct Complying = 29,1% Accept 29% one method & one accuracy mark OR 17,5% one mark + 11,6% one mark = 29,1% one method & one accuracy mark 4 Explain TWO measures to improve the collection from debtors. Any TWO relevant measures   Part-marks for unclear / incomplete answers Possible responses for two marks: Accept alternative valid responses • Monthly statements must be sent out / emailed on time. • Offer higher discounts for early payments. • Add interest on overdue accounts. • Do not sell to debtors exceeding the credit limit / not up to date with payments. • Send SMS reminders to debtors. • Employ services of an attorney or debt collector / sue the debtor. • Encourage debtors to pay by debit order. Possible responses for one mark: Interest / discount / SMS No mark for: Get debtors over 60 days to pay quicker or reduce credit limit of such debtors 4 2.2 Calculate the amount receivable from or payable to SARS for VAT on 31 August 2016. Mark one line only. Cannot mix signs. Inspect candidates’ responses. Award highest mark.        One part correct 14 250 – 27 720 + 2 940 – 1 120 – 1 330 + 40 880 = 27 900 40 880 – 1 120 = 39 760 three marks OR – 14 250 + 27 720 – 2 940 + 1 120 + 1 330 – 40 880 = – 27 900 1 120 – 40 880 = –39 760 three marks OR Balance at beginning = 14 250 Output 40 880 – 1 120 – 1 330 = 38 430 Input 27 720 – 2 940 = (24 780) 27 900 OR VAT CONTROL 27 720 14 250 *1 120 *2 940 *1 330 40 880 27 900 58 070 58 070 Receivable/Payable: Payable  Do not accept Receivable (irrespective of workings) TOTAL MARKS 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 7 DBE/November 2016 NSC – Memorandum QUESTION 3 3.1 3.1.1 Expense  Accept recognisable abbreviations 3.1.2 Current asset  3.1.3 Current liabilities  3.1.4 Net working capital  4 3.2 AUDIT REPORT 3.2.1 To whom is the audit report addressed? Shareholders 1 3.2.2 Who has to ensure that the financial statements are prepared and presented at the annual general meeting? Directors / Management / CEO / CFO  1 3.2.3 Fralezi Ltd received a/an (qualified/unqualified/disclaimer of opinion) audit report. Mark the two parts independently. Unqualified  Explain your choice. Any valid response  Fair presentation / Clean audit / Did not state any shortcomings in the financial statements / In accordance with IFRS or Companies Act. 2 3.2.4 Explain why the independent auditors referred to page numbers 11–29 in the report. Any valid explanation  Part-marks for unclear / incomplete answers • Auditors are responsible for only parts / certain pages of the annual report. • They are not accountable for the other information in the annual reports. • Financial statements on pages 11–29 were subjected to audit / examination. • Additional information, such as corporate social investment matters, is not audited. Do not accept statistical sampling as a reason. 2 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 8 DBE/November 2016 NSC – Memorandum 3.3 FRALEZI LTD INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2016 Sales (4 777 300 – 35 700 ) One part correct  4 741 600 Cost of sales Award 3 marks if = Sales + 297 200 ÷ 1,7  (2 964 000) Gross profit One part correct, COS must be subtracted  1 777 600 7 Other income Operation one part correct  110 640 Rent income (101 900  + 6 000  – 8 300 ) One part correct  99 600 107 900 three marks OR -2 300 four mark Bad debts recovered  10 540 ** Provision for bad debts adj. (3 732– 3 232 ) One part correct  500 Could be an expense if error made Gross operating profit Operation  1 888 240 12 Operating expenses Operation  (1 177 000) Directors' fees  375 000 Salaries and wages  365 540 Sundry expenses Any figure less than Op Exps total; ignore brackets  129 406 Beware of inappropriate figures being inserted in this line e.g. discount, insurance Depreciation (124 260 – 6 300 + 5 040) –1 260 three marks One part correct;  123 000 –14 700 + 13 440 three marks -for old; + for new Audit fees (23 000  + 7 250 )  30 250 Repairs (100 000  + 6 000 )  106 000 Packing material (13 600 – 3 700 )  9 900 +1 900 two marks –152 one mark Advertising (20 596  + 1 748 ) One part correct  22 344 Loss due to theft (9 300  + 1 260 ) See depr adj above; opposite sign OR (28 560 one m/mark – 18 000 one mark) One part correct  10 560 ** Trading stock deficit One part correct but not 225 500  5 000 32 (209 500  + 21 000  – 225 500 ) Could be a surplus if error made Operating profit Check = Sales x 0,15  711 240 Interest income Profit before interest expense – Operating profit  28 480 Profit before interest expense Operation from bottom up  739 720 Interest expense Must be correctly placed & subtracted; brackets not essential  (39 720) Net profit before tax Operation; must be more than R504 000  700 000 Income tax for the year Ignore brackets  (196 000) 9 Net profit after tax 504 000 Foreign items –1 (max –2) ** Award marks to workings if item misplaced; -1 for placement; max -2 TOTAL MARKS 60 70 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 9 DBE/November 2016 NSC – Memorandum QUESTION 4 4.1 4.1.1 C  Solvency 4.1.2 D  Liquidity 4.1.3 B  Return on equity 4.1.4 A  Gearing 4 4.2.1 ORDINARY SHARE CAPITAL: AUTHORISED SHARE CAPITAL 1 500 000 ordinary shares ISSUED SHARE CAPITAL Presentation, incorrect or no details -1 (max -1) 900 000 Ordinary shares on 1 July 2015 9 180 000 (75 000) Shares re-purchased (Average: R10,20)  (765 000) 125 000 Shares issued (R10,80 per share) 1 350 000 950 000 Ordinary shares on 30 June 2016 Operation one part correct; Repurchase deducted & Issued added 9 765 000 7 RETAINED INCOME: Presentation, incorrect or no details -1 (max -2) Balance on 1 July 2015 360 000 Net profit after tax 444 500 Funds used for repurchase of shares (37 500)  75 000  x 0,50  (10,70–ASP used) OR (802 500–figure from OSC) Do not accept 0 One part correct Ordinary share dividends Must be in brackets or subtracted (481 250)  One part correct Interim (434 250 – 162 000) One part correct 272 250 OR 481 250 one mark – 209 000 one mark Do not accept 162 000 Final 209 000  Balance on 30 June 2016 Operation, one part correct 285 750 Must subtract repurchased shares and OSD 9 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 10 DBE/November 2016 NSC – Memorandum 4.2.2 Calculate the change in loan for the Cash Flow Statement. 8 000 000 – 4 500 000 = 3 500 000  No part marks 2 Calculate the income tax paid for the Cash Flow Statement. 23 400  + 190 500  – 6 200  = 207 700  One part correct OR – 23 400 – 190 500 + 6 200 = –207 700 OR T-account with figures on correct sides Debit Credit 207 700 23 400 6 200 190 500 4 4.2.3 Net change in cash and cash equivalents  808 000 Cash and cash equivalents (beginning of year)  (603 000) –610 500 one mark +7 500 one mark Cash and cash equivalents (end of year)  205 000 4 4.2.4 Calculate the acid-test ratio on 30 June 2016. 1 015 000 one mark – 564 000 one mark 451 000 two marks (246 000  + 205 000 ) : 635 200  = 0,7 : 1 One part correct; must be y:1 4 Calculate the debt-equity ratio on 30 June 2016. 8 000 000  : 10 050 750  = 0,8 : 1 One part correct; must be y:1 Accept 0,79 : 1 3 Calculate the % return on average shareholders' equity (ROSHE) for the year ended 30 June 2016. 444 500  x 100 ½  (10 050 750 + 9 540 000) 1 9 795 375 (3 marks) = 4,5% One part correct; cannot be Rands, cents, units etc 5 Calculate the net asset value per share (NAV) on 30 June 2016. 10 050 750  x 100 = 1 058 cents One part correct OR R10,58 OR 1057,9 cents 950 000 See 4.2.1 Must be Rands or cents 3 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 11 DBE/November 2016 NSC – Memorandum 4.2.5 The liquidity of the company has improved. Quote THREE financial indicators to support this statement. Provide figures and trends. THREE valid indicators    Figures and trends    Current ratio – 0,3 : 1 to 1,6 : 1 Acid-test ratio – 0,1 : 1 to 0,7 : 1 see 4.2.4 Debtors' collection period – 43 days to 36 days Do not accept creditors' payment period and stock turnover rate If more than three indicators shown, -1 for superfluous / foreign indicator; max -2 6 4.2.6 Provide calculations to show the change in the dividend pay-out policy. Comparison of DPS to EPS for 2015  Calculation / implied calculation  Comparison of DPS to EPS for 2016  Calculation / implied calculation  Possible calculations for two marks each: • 2015: 35/58 = 60,3% OR 0,6:1 OR Paid out most of earnings/more than 50% • 2016: 55/51 = 107,8% OR 1,1:1 OR Paid out more than earnings Possible responses for one mark each: • 2015: Paid out 35c of 58c earnings / retained 23c of 58c earnings • 2016: Paid out 55c of 51c earnings / paid out 4c from previous earnings 4 Explain why the directors decided to change the policy. State ONE point with figures. Any ONE valid explanation  Relevant figures  Responses for two marks: To satisfy shareholders for: • ROSHE decreased (from 6,2%) to 4,5%. see 4.2.4 • Market price decreased (from 1 030 cents) to 1 000 cents. • EPS decreased (from 58 cents) to 51 cents. Do not accept NAV going down; this is a result of the decision. Responses for one mark: • Satisfy shareholders / Encourage new shareholders • To get directors re-elected at AGM 2 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 12 DBE/November 2016 NSC – Memorandum 4.2.7 (a) Calculate Mary's % shareholding on 1 October 2015 after repurchase of shares. Do not award this mark if another figure added 420 000 x 100 = 50,9% One part correct Accept 51% (900 000 – 75 000) Must be below 100%; % sign not essential 825 000 two marks 4 (b) Explain how Mary has benefitted from the decision to repurchase the shares. Explanation  Part-mark for unclear / incomplete answer Mary became the majority shareholder 2 (c) The independent auditor discovered that Mary had made the decision to repurchase the shares without informing the board of directors. Why should the independent auditor be concerned about this? Responses for two marks:  Part-mark for unclear / incomplete answer • Not good corporate governance / Not in accordance with King Code • CEO cannot make these decisions without getting board approval • Considered to be insider trading / Abuse of position for personal benefit • Unethical / Not transparent Responses for one mark: Not good / not right / King Code / Corporate governance / Could have outvoted other shareholders or directors 2 4.2.8 The Cash Flow Statement reflected fixed assets purchased to the amount of R4,5 million. Mark source first. If this correct, decision must match source. Explanation must be relevant to the source. Major sources of funding with figures Good/Bad Explanation with financial indicators/figure (over R1 000 000 decision Explanation   Figures   each) Bad  The company is negatively geared. ROTCE (8,2%) Source 1: is lower than the interest rate on loans (12%). Must Increase in loan compare interest rate to ROTCE. OR - R3 500 000 Source  Figures  Financial risk increased. The debt-equity ratio increased from 0,5 : 1 to 0,8 : 1 (See 4.2.4). Must be Reference can be made regarded as bad as there is negative gearing. to 2015 indicators. Good  Shares were sold for R10,80 per share which is Source 2: greater than the market price of R10,30 (2015) or Issue of shares - R10,00 (2016) or NAV of R10,60. R1 350 000 OR Source  Figures  If this amount was borrowed, interest of 12% will be payable / Has reduced the risk as D/E ratio would have been higher than 0,8:1. OR Mary is no longer the majority shareholder; owns 44% of the shares. OR ROSHE decreased from 6,2% to 4,5% See 4.2.4 EPS decreased from 58c to 51c Bad NAV could have been higher than 1058c 10 TOTAL MARKS 75 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 13 DBE/November 2016 NSC – Memorandum QUESTION 5 5.1 INVENTORY VALUATION 5.1.1 Explain the FIFO valuation method. Any valid explanation, e.g. Part-marks for incomplete explanation It is assumed that the first items bought are the first items sold.  OR Stock on hand is valued at the latest cost prices. Explain the specific identification valuation method. Any valid explanation, e.g. Part-marks for incomplete explanation Each item of stock is valued at its original cost to the business.  4 5.1.2 Calculate the cost price per laptop on hand on 1 October 2015. R413 000/118 = R3 500  No part marks 2 5.1.3 Calculate the value of the closing stock on 30 September 2016. PREFERRED METHOD 202 500 three marks 502 200 four marks         One part correct [3 750 x (410 – 356)] + [4 650 x (630 – 20 – 502)] = R704 700 54 two marks 108 three marks 610 two marks 128 two marks ALTERNATIVE METHOD WITH TOTALS one mark two marks one mark one mark two marks one mark & one method mark (1 537 500 – 1 335 000) + (2 929 500 – 93 000 – 2 334 300) = 704 700 202 500 502 200 three marks four marks ALTERNATIVE METHOD USING COST OF SALES Candidates must know that opening stock has all been sold to get 3 marks on net purchases: Net purchases – Cost of Sales = Closing stock 1 335 000 two marks 2 334 300 two marks + 4 374 000 – [(356 x R3 750) + (502 x R4 650)] = R704 700 one or three marks one mark one mark one mark one mark one mark & one method mark -403 000 & +403 000 = 0 9 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 14 DBE/November 2016 NSC – Memorandum 5.2 MANAGEMENT OF INVENTORIES 5.2.1 What decision did Kyle take regarding the selling price of the desks? Provide figures. Decision  Figures  • He increased the mark-up from 60% to 80%. • He increased the selling price from R1 920 to R2 520 / by R600 / by 31%. 2 How has this decision affected the business? State TWO points. Provide figures. Any two valid points   Figure   • Gross profit increased from R259 200 to R336 000 / by R76 800 / by 29,6%. • Stock turnover rate decreased from 7,2 to 6,0 times. • Orders of desks decreased to 300 units / by 70 units / by 19%. • Sales of desks decreased to 300 units / by 65 units / by 18%. 4 5.2.2 Was it a good idea for Kyle to change to a cheaper supplier of chairs? YES/NO: No Explain TWO points. Provide figures. Any two valid points   Figure   • The gross profit decreased from R148 920 to R95 200 / by R53 720 / by 36%. • The returns increased from 0 to 90 units / the customers are not satisfied with the quality of the product / Resulted in lower net sales 680 compared to 730. • The cheaper price of R490 did not affect the stock turnover rate which remained constant at 4,0 / chairs did not appear to be popular with customers. 5 5.2.3 Based on the information given, provide TWO separate suggestions to Kyle to improve the profit on printers in 2017. One valid point for pricing  Figure  One valid point for orders  Figure  Suggestion 1 (with figures): • Kyle should increase the price; Any figure between R975 and R1 200 OR • Kyle should increase MU%; Figures: Any % between 25% and 70%. Suggestion 2 (with figures): • Kyle must plan purchase of printers / must follow up on orders to meet the demand of 925 units (i.e. 200 more than current sales) OR • Kyle must maintain / improve stock turnover rate of 11,8 times Responses for one mark only: Find a cheaper supplier / Request deposits from customers / Payment in advance / Follow up on orders from customers / Negotiate a trade discount on purchases. 4 TOTAL MARKS 30 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 15 DBE/November 2016 NSC – Memorandum QUESTION 6 6.1.1 TWO items recorded incorrectly in the Cash Budget: Any TWO of:   If more than two items given, -1 for invalid item; max -1 Discount received Depreciation Bad debts 2 6.1.2 TWO items in the Cash Budget that would NOT appear in a Projected Income Statement: Any TWO of:   If more than two items given, -1 for invalid item; max -1 Cash from debtors Fixed deposit matures Payments to creditors Repayment of loan 2 6.2 DEBTORS' COLLECTION SCHEDULE MONTHS CREDIT SALES SEPTEMBER OCTOBER July 120 000 8 400 August 151 200 60 480  10 584 September 172 800 86 400  69 120 October  198 720 50% of credit sales  99 360 Operation one part correct 155 280  179 064 9 6.3 AMOUNTS FOR THE CASH BUDGET WORKINGS AMOUNT (a) Cash sales for September 288 000  x 40% 3 R115 200 172 800 one mark x 40/60 one mark One part correct OR 132 480 x 100/115 one mark one mark (b) Payments to creditors for October 252 000  x 100/ 180 x 96/ 100  4 R134 400 One part correct 140 000 two marks – 5 600 one mark 241 920 two marks (c) Directors' fees for October 216 000  x 2/ 3  x 135/ 100  5 R194 400 144 000 three marks +50 400 one mark One part correct (72 000 + 25 200) x 2 one mark two marks one mark (d) Interest on loan for October Could use solve for x method     6 875 – (12,5% x 52 800 ÷ 12) 6  550 three marks 6 600 two marks 4 400 two marks R6 325 One part correct one mark one mark one mark one mark (660 000 – 52 800) x 12,5% ÷ 12 607 200 two marks 18 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 16 DBE/November 2016 NSC – Memorandum 6.4.1 The directors changed the method of payment to the salespersons. Explain how this has benefitted the salespersons. Quote figures. Explanation  Figures  Although the salaries were reduced from R40 000 to R12 000, they received a commission of R66 150 (total: R78 150) / 95,4% or R38 150 more than their previous salaries. Explain how this has benefitted the business. Quote figures. Explanation  Figures  Actual sales are higher than the budgeted sales by R201 600 (489 600 – 288 000); sales are 70% higher than budget. 4 6.4.2 The directors are not concerned about the overspending on packing material. Explain why this is so. Quote figures or calculations. Explanation  Both items i.e. Sales & Packing materials must be mentioned Figures   Candidates must quote percentages – if totals are quoted, award only one mark for each item Candidates must compare percentages of these two items to earn full marks Sales were 70% over budget, while packing materials were only 20% over budget. OR Packing materials were budgeted at 5% of sales, while actual packing materials were only 3,5% of sales. Response for one mark: Packing materials will increase if sales increase. 5 TOTAL MARKS 40 TOTAL: 300 Copyright reserved