Accounting Grade 12 NSC November 2019 Memo (English)

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 ACCOUNTING NOVEMBER 2019 MARKING GUIDELINES MARKS: 300 00 MARKING PRINCIPLES: 1. Unless otherwise stated in the marking guidelines, penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item (no 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 answer 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. 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. 10. Operation means 'check operation'. 'One part correct' means operation and one part correct. Note: check operation must be +, -, x, ÷, or per memo. 11. In calculations, do not award marks for workings if numerator & denominator are swapped – this also applies to ratios. 12. 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 . 13. Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one comment could contain different aspects. 14. Codes: f = foreign item; p = placement/presentation. These marking guidelines consist of 17 pages. Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 2 DBE/November 2019 NSC – Marking Guidelines QUESTION 1 1.1 1.1.1 False  1.1.2 True  1.1.3 True  3 1.2 DESKS FACTORY 1.2.1 Factory Overhead Cost Note Indirect labour R 296 500 Depreciation on factory plant 166 000 Water and electricity (248 000 + 18 000) x 80% OR – 53 200 212 800* 198 400 + 14 400 Factory rent (345 600 x 810/1080) or – 86 400 259 200* Insurance (12 600 x 75/25) or x 3 OR 50 400 – 12 600 37 800* Factory sundry expenses 107 700 -1 (Foreign items) Advertising *one part correct 1 080 000* 8 1.2.2 Calculate the total cost of production of finished goods. Workings Answer 9 000 x 160 two or no marks 3 060 000 + 1 440 000 + 1 080 000 R5 580 000    see 1.2.1  OR: units DMC/u DLC/u FOHC/u one part correct 620 three marks three marks 9 000 x (340 + 160 + 120) (see 1..2.1 ÷ 9 000) + 500 one mark one mark one mark one method mark 5 1.2.3 Sihle wants to produce an additional 1 500 desks. Calculate the additional profit he can expect. Workings Answer Extra units x Contribution per unit Correct operation & one part correct 750 one mark – 580 one mark [340+160+80]  1 500  x 170  R255 000 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 3 DBE/November 2019 NSC – Marking Guidelines 1.3 CHAIRS FACTORY 1.3.1 Provide a calculation to confirm the break-even point for 2019. Workings Answer 16 000 x 96 or 1 536 000 two marks 1 216 000  + 320 000  390  – 305  85 two marks OR: Sales VC FC 7 047 690 – 5 511 655 – 1 536 000 = 35 or 0 one mark each 4 1.3.2 Comment on the break-even point and the production level achieved. Quote figures. If differences are shown for figures, this carries two marks Comment on BEP Figures Comment on production Figures Reponses for four marks: • Produced 16 000 units but BEP is 18 071(or see 1.3.1) units so they will make a loss • Produced 2 071 less than BEP so they will make a loss. • Production increased from 15 000 to 16 000 units (by 1 000) and BEP increased from 12 400 to 18 071 units (by 5 671). • In 2018 they made a profit on 2 600 units. 4 1.3.3 Sihle feels that wood raw material was not well controlled. Provide a calculation. METRES Actual issue: 22 000m  Budget: 16 000  x 1,2  = 19 200m  OR: Wastage = 2 800m four marks Choose one line OR: Expected: 22 000 one mark /1,2 one mark =18 334 one mark Actual: 16 000 one mark UNITS OR 2 334 fewer chairs made four marks Choose one line OR: 22 000 one mark x 120 16 000 one mark x 1,2 one mark x 120 one mark TOTAL Expected: = R2 640 000 Actual = R2 304 000 COSTS OR Extra cost = R336 000 four marks Choose one line OR: UNIT Expected: 1,2 one mark x R120 one mark = R144 one mark Actual= R165 one mark COSTS OR Extra unit cost = R21 per unit extra four marks Choose one line OR: DMC increased by 33% (R165 –R124; 41÷124) two marks % PROD Units produced increased by 7% (1 000 ÷ 15 000) two marks 4 Identify TWO possible causes of this problem. Provide a solution for EACH. POSSIBLE CAUSES SOLUTION FOR EACH Wastage / unskilled Train workers; supervise regularly   TWO valid workers Use technology (stencils / templates) & different Damage (fire / water) Secure storage / check deliveries causes with Internal controls / stock counts / supervision / solutions Theft of wood buy in smaller quantities / install cameras   4 Poor quality wood Source other suppliers / check deliveries 1.3.4 Give TWO reasons for the increase in direct labour cost. Provide a solution for EACH. REASONS SOLUTION FOR EACH Load shedding Generator or solar power   Workers dissatisfied TWO valid Engagement / communicate with union with increase / Protests & different reasons Inflation / wage Improve productivity with increase / bonus solutions Overtime Restrict overtime / more workers (avoid overtime)   Inefficient / slow Pay per unit produced / improve monitoring workers procedures / training programme 4 TOTAL MARKS 40 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 4 DBE/November 2019 NSC – Marking Guidelines QUESTION 2 2.1.1 State THREE advantages of EFTs. Less fraud Convenient or easy to use    THREE Can be done from business; not restricted to business hours / different & time-saving valid Payment/receipts are instant / account is updated immediately / advantages no long queues to deal with Cheaper bank charges 3 2.1.2 Janet, the bookkeeper, has been assigned the duty of processing and controlling all EFTs. Explain TWO reasons why the internal auditor was concerned about this. Part marks for unclear answer. Too many related job functions / No division of duties (no checks and   balances) / Possible fraud. TWO She may be negligent in performing her duties. different & valid reasons Lack of supervision can result in abuse / payments not made on time If Janet is absent, there may not be any continuity. 4 2.2 Show the changes in the Cash Journals for June 2019. CASH RECEIPTS CASH PAYMENTS JOURNAL JOURNAL Provisional 27 470 32 400 totals For one mark: -1 if 1 125 entered here and entered only once in CPJ R1 125 in CRJ & 1 125  R1 125 x 2 in CPJ 1 500  1 400  1 200  Two marks or 0 (7 950 – 5250) 2 700  7 950 CRJ one mark 5 250 CPJ one mark 175  2 800  130  36 000 TOTALS 34 900 11 -1 foreign or superfluous items max -1 e.g. 9 500 2.3 Calculate: Bank Account balance Workings Answer 9 200 + 36 000 – 34 900 one part correct    10 300 see 2.2 see 2.2 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 5 DBE/November 2019 NSC – Marking Guidelines 2.4 BANK RECONCILIATION STATEMENT ON 30 JUNE 2019 DEBIT CREDIT Balancing figure Cr Balance per bank statement Could be Dr or Cr 12 550  Cr Outstanding deposit 9 675  Cr Incorrect entry 1 125  Dr Outstanding cheques / EFTs 444 4 670  522 4 580  EFT 14 3 800  see 2.3 Dr Balance per bank account 10 300  Do not accept 9 200 23 350 23 350 8 If DEBIT/CREDIT columns not indicated, assume first column Debit Brackets not acceptable for two column method -1 Foreign items (if marks scored elsewhere for the amount) -1 max -1 max Presentation (if no / incorrect details) OR: VERTICAL METHODS (choose one): Balance per bank statement 12 550 Balance per bank account 10 300 Outstanding deposit 9 675 Outstanding deposit (9 675) Incorrect entry 1 125 Incorrect entry (1 125) Outstanding cheques/EFTs Outstanding cheques/EFTs 444 (4 670) 444 4 670 522 (4 580) 522 4 580 EFT 14 (3 800) EFT 14 3 800 Balance per bank account 10 300 Balance per bank statement 12 550 TOTAL MARKS 30 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 6 DBE/November 2019 NSC – Marking Guidelines QUESTION 3 CABINETS 3.1 Calculate the value of closing stock using FIFO. Workings Answer If 280 – units in first part one part correct (230  x 1 100 ) + (50  x 990 ) R302 500  253 000 49 500 6 3.2.1 Calculate the % mark-up achieved in 2019. Workings Answer 3 480 000 – 2 170 500 one part correct 1 309 500  x 100 2 170 500  60,3%  4 3.2.2 Provide TWO points (with figures) to prove that this decision achieved its aims.   Sales increased to R3 480 000 (from R3 375 000) / by R105 000 / TWO different by 3,1% & valid points   Figures Number of customers increased to 37 (from 26) / by 11 / by 42% 4 3.2.3 The CEO feels that this decision also negatively affected the company. Provide TWO points (with figures) to support his opinion. Do not accept Mark-up % here Gross profit decreased to R1 309 500 (from R1 425 000) / by   R115 500 / by 8,1% / Cost of sales increased to R2 170 500 TWO different (from 1 950 000) / by R220 500 / by 11,30% & valid points   Average units per customer dropped to 63 (from 96) (2 500/26) Figures (2 320/37) / by 33 / by 34% Units sold dropped by from 2 500 to 2 320 / by 180 / by 7,2% 4 Give the directors advice to solve this problem. Explain TWO points. Restrict (be selective with) trade discounts to good customers only Find a cheaper supplier (to compensate for keeping selling   prices low) TWO different & valid points Increase marketing / advertising in areas outside the current areas targeted Provide other incentives such as after-sales services, maintenance or free deliveries 2 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 7 DBE/November 2019 NSC – Marking Guidelines LAMPS 3.3 Calculate the stockholding period for lamps (use closing stock). Workings Answer OR one part correct one method mark 59 625  x 365 265 one mark x 365 23,4 days  OR 0,8 months 930 375  1 3 675 one mark 1 OR 26,3 days OR 0,9 months 3 3.4 Calculate the number of missing lamps. Workings Answer Op.stock Purchases Clos.stock Sales one part correct 600 + 3 800 – 265 – 3 675 460  5     Give TWO suggestions to solve this problem. Divide duties / delegate to different employees   TWO valid & Threaten strong disciplinary action (in future) / recover cost from culprit different Increase supervision at regular intervals / random physical inspection of suggestions stock part-marks for partial or Change to the perpetual inventory system to record stock incomplete answers CCTV as an internal control measure Insist on proper documents for all stock supplied 4 TELEVISION SETS 3.5 Calculate the value of the closing stock of TV sets on 30 September 2019 using the specific identification method. Workings Answer 7 800 000  – 2 580 000  = R5 220 000 (4 800 000 + 3 000 000) (430 x 6 000) three marks [(800 + 500) x 6 000] LYN: OR 870 two marks x R6 000 one mark one part correct (1 300 – 430) R11 772 000 10 440 000  – 3 888 000  = R6 552 000  (6 840 000 + 3 600 000) (540 x 7 200) three marks (1 450 x R7 200) KYA: OR 910 two marks x R7 200 one mark (1 450 – 540) 7 3.6 Explain THREE different concerns George would have about this problem. THREE Directors engaging in fraud and corruption / bribes / conflict of interests different & valid Unethical behaviour of CFO places the company placing at risk concerns Image of the company negatively affected / will affect the share price and    further investments from potential investors part-marks for partial or High stock value is tied up in stock / Obsolete / Affects liquidity incomplete Shareholders may want to sell their shares answers It will negatively affect the audit report Business will lose goodwill as it is unethical 6 TOTAL MARKS 45 Copyright reserved Please turn over

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Downloaded from hlayiso.com Accounting 9 DBE/November 2019 NSC – Marking Guidelines QUESTION 4 4.1 4.1.1 C 4.1.2 E 4.1.3 D 4.1.4 A 4.1.5 B 5 4.2 VISIV LTD 4.2.1 Calculate: (i) Depreciation for the current year Workings Answer one part correct 225 000  x 25% x 8/12  R37 500  (ii) Carrying value of vehicle sold Workings Answer   Two marks 225 000 – 37 500 see (i) above R187 500 If wrong, mark workings 100 000 + 75 000 + 37 500 Cannot get full marks if OR: 400 000 – 212 500 superfluous workings 5 Calculate: Profit/Loss on sale of asset Workings Answer Two marks   R7 500 If wrong, mark workings 195 000 – 187 500 see (ii) above Cannot get full marks if superfluous workings 2 Calculate: Fixed assets carrying value on 28 February 2019 Workings Answer   see (i) above  see (ii) above 10 190 000 – 37 500 – 187 500 225 000 two method marks OR: 10 190 000 – (400 000 – 212 500 + 37 500) one mark one method mark one method mark one part correct Also accept ledger account format R9 965 000 10 190 000 37 500 187 500 9 965 000 4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 10 DBE/November 2019 NSC – Marking Guidelines 4.2.2 Calculate the correct net profit after tax for the year ended 28 February 2019. Indicate (+) for increase and (–) for decrease. Workings Answer Incorrect net profit before tax 822 700 Provision for bad debts adjustment (65 000)  Advertising 9 800  Rent income [(334 000 – 9000) / 13] + 3 000 (28 000) * Additional depreciation see 4.2.1 (i) (37 500)  Profit on sale of asset see 4.2.1 7 500 Income tax (155 000 + 43 000) (198 000) * Correct net profit after tax 511 500 * *One part correct 9 4.2.3 RETAINED INCOME NOTE: Balance at beginning 865 300 Net profit after tax see 4.2.2 511 500  Shares repurchased 360 000x R0,30 ignore brackets (108 000)  4,10 – 3,80 Ordinary share dividends ignore brackets (783 200) * Interim 295 200  Final 2 440 000 x R0,20 488 000 * Balance at end Check operation; 485 600 * shares repurchased and share dividends must be subtracted 9 *one part correct Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 11 DBE/November 2019 NSC – Marking Guidelines 4.2.4 VISIV LTD STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) ON 28 FEBRUARY 2019 ASSETS Non-current assets (TA – CA) 10 624 000 Fixed assets see 4.2.1 9 965 000 Fixed deposit Balancing figure 3 659 000 Current assets CL x 0,8 accuracy marks 2 320 000 Inventories 1 102 000 Trade and other receivables # (1 090 000 – 65 000 + 9 800 + 7 600) 1 042 400* Advertising Cash and cash equivalents Balancing figure 175 600 TOTAL ASSETS see total equity and liabilities 9 12 944 000 EQUITY AND LIABILITIES Ordinary shareholders' equity Operation 8 637 600 Ordinary share capital 8 152 000 Retained income See 4.2.3 2 485 600 Non-current liabilities 1 406 400 Mortgage loan (1 758 000  – 351 600 ) 3 1 406 400* See CL below Current liabilities 2 900 000 Trade and other payables (1 906 800  + 28 000 + 7 600 + 75 000) 2 017 400* Rent income see 4.2.2 SARS: Income tax may be part of T&OP 43 000 Shareholders for dividends may be part of T&OP see 4.2.3 488 000 Current portion of loan Balancing figure 10 351 600 TOTAL EQUITY AND LIABILITIES 12 944 000* 27 * One part correct -1 for presentation in each case (i.e. max -2) Foreign items –1 max –1 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 12 DBE/November 2019 NSC – Marking Guidelines 4.3 AUDIT REPORT 4.3.1 What type of audit report did the company receive? Disclaimer  Accept ‘withheld’ or a valid description. 1 4.3.2 Give TWO examples of audit evidence that the auditors would require.   TWO valid & asset registers source documents e.g. invoice different examples journals ledgers Be aware of other valid debtors’ statements creditors’ statements examples that are physical inspections bank statements related to income or contracts (signed) EFT voucher (proof of payment) expenses 2 4.3.3 Apart from the current ratio, identify and calculate ONE other financial indicator that the auditors would have used in deciding on this opinion. Acid test ratio  2 320 000 –1102 000 / or T&OR + C&CE see 4.2.4 1 218 000  : 2 900 000  = 0,4 : 1  one part correct; must be x:1 4 Explain what the directors could have done to prevent this comment by the auditors. Provide TWO points. Cash in the investments Postpone repurchase of shares (to another time when liquidity improves) Ensure that the auditors and directors comply with the latest Companies Act   TWO valid & Try to convince auditors that solvency ratio is good different Issue more shares to the public or existing shareholders explanations Offer rights issue to shareholders rather (than pay more dividends) Company offers higher dividends to shareholders rather than repurchasing of shares Reduce the dividends paid to improve liquidity Re-negotiate loan repayments / credit terms Promote more cash sales / off-load stock 2 TOTAL MARKS 70 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 13 DBE/November 2019 NSC – Marking Guidelines QUESTION 5 5.1 5.1.1 B 5.1.2 A 5.1.3 C or A  5.1.4 B 4 5.2 SUNSET LTD 5.2.1 Calculate: Income tax paid Workings Answer 477 900 – 63 000 – 18 000     one part correct R396 900 – 477 900 + 63 000 + 18 000 mark one line / accept brackets one mark one mark one mark 4 Calculate: Dividends paid Workings Answer 195 000 + 420 000 1200 000 x 0,35    one part correct OR: 195 000 + 792 000 – 372 000 R615 000 – 195 000 – 792 000 + 372 000 mark one line / accept brackets one mark one mark one mark 4 Calculate: Proceeds of shares issued Workings Answer 300 000 one mark x R6,20 two marks 9 300 000 – 1 860 000 – 7 724 000     one part correct 1 860 000 9 300 000 R284 000 7 724 000 284 000 6 Calculate: Fixed assets purchased Workings Answer     Choose one line only 10 658 000 – 490 000 – 408 000 – 11 835 100 OR 11 835 100 + 490 000 + 408 000 – 10 658 000 one part correct 10 658 000 408 000 R2 075 100  2 075 100 490 000 11 835 100 5 5.2.2 Calculate financial indicators for the year ended 28 February 2019: % operating profit on sales Workings Answer 2 033 900  x 100 check operation; one part correct 23,3%  8 725 000  Accept 23% 4 Net asset value per share Workings Answer 695,6 cents 8 625 000  x 100 check operation; one part correct Accept 696 cents 1 240 000  or R6,96 4 Debt-equity ratio Workings Answer   check operation; one part correct 3 500 000 : 8 625 000 must be x: 1 0,4 : 1  4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 14 DBE/November 2019 NSC – Marking Guidelines 5.3 HORIZON LTD and OPTIMA LTD 5.3.1 Explain why directors should be interested in the price of their companies' shares on the JSE. Any ONE valid comment  one mark for partial or incomplete answer Responses for 2 marks: • It shows public confidence in the company. • It can be compared to other companies / an external indicator. • Shareholders will want to have capital growth on their investment. • Directors will be judged on the performance of the shares as this reflects the performance of the company. 2 Calculate the number of additional shares in Horizon Ltd that Mike was able to buy on the JSE in 2019. Workings Answer    one part correct R420 000 ÷ R8,40 50 000 shares 3 Comment on the price that Mike paid for these shares and provide TWO reasons why he might have been satisfied to pay this price. Compare price paid to NAV Figures Reasons   HORIZON Ltd: JSE Price exceeds NAV by 90 cents (R8,40 – R7,50) Valid reasons for HORIZON: • He wants to be the majority shareholder • More influence over decisions by board of directors • JSE price reflects public demand for the shares • Potential for high returns in future 6 5.3.2 Explain your opinion on which company has the better dividend pay-out policy. Quote figures. Choice of company: Either Horizon Ltd OR Optima Ltd  Reason: Either retaining funds OR rewarding shareholders  Figures: Horizon Ltd pays out 67% (65c of 97c earned)  quote two figures or % While Optima Ltd pays out 96% (80c of 83c earned)  quote two figures or % Be aware of alternative ways of explanation and calculation e.g. amount or % retained 6 Compare and comment on the % return on equity earned by EACH company. Quote figures. Horizon Ltd earns 6,2% Award two marks for the difference 12% Optima earns 18,2% Comparison (may be implied)  Compare to interest rate (6,5%)  4 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 15 DBE/November 2019 NSC – Marking Guidelines Mike feels that the earnings per share (EPS) of Optima Ltd is much better than that of Horizon Ltd. Explain why he feels this way. Quote figures or calculations. Quote EPS of Horizon Ltd 97 cents  Quote EPS of Optima Ltd 83 cents  Compare EPS of both companies to: Share value OR to number of shares owned OR % ROSHE OR Net Profit  Identify figures for any one comparison below  Horizon Ltd Optima Ltd • Cost of shares is high 750c or 840c Cost of shares is low 445c or 400c (Earnings yield is 12,9% or 11,5%) (Earnings yield is 18,7% or 20,8%) • EPS is earned on 580 000 shares EPS is earned on 1 430 000 shares • % ROSHE is 6,2% % ROSHE is 18,2% • NP after tax is R1 202 800 NP after tax is R2 158 000 (97c x 1 240 000 shares) (83c x 2 600 000 shares) 5 5.3.3 Explain TWO decisions taken by the directors of Horizon Ltd in response to the state of the economy, and how these decisions will affect the company in future. Decisions: TWO valid decisions   Figures   • Sold fixed assets R1 800 000 / No new fixed assets bought (R0) • Investments reduced R900 000 • Loan repaid R1 600 000 Effect on Horizon Ltd in future: Any one valid comment:  one mark for partial or incomplete answer • The infrastructure / size of the company is decreasing which will affect future profit • The reduced infrastructure / size of the company could lead to cost savings (or increased profit) Response for 1 mark: • Saving on interest / less risk 6 Explain TWO decisions taken by the directors of Optima Ltd that affect risk and gearing. Quote and comment on TWO financial indicators. Decisions: Two valid decisions   Figures   • Loan increased R3 800 000 • Shares issued R200 000 Quote and comment on TWO financial indicators that affect risk and gearing.   Quote indicators with figures: Debt-equity ratio: 0,7 : 1; ROTCE 15,1%;   Comments on: increased risk / positive gearing (ROTCE exceeds interest rate) 8 TOTAL MARKS 75 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 16 DBE/November 2019 NSC – Marking Guidelines QUESTION 6 6.1 Foreign CASH BUDGET PROJECTED INCOME entries STATEMENT -1 max -2 Nov. Dec. Jan. Nov. Dec. Jan. 2019 2019 2020 2019 2019 2020 Printer 40 800  bought Depreciation 680 680 Insurance 48 000 4 000 Loan 100 000 received Loan *5 000 repayments Interest *1 000 1 000 11 Calculate the % of debtors who settle their accounts in the 2nd month following 6.2 the credit sales transaction month Workings Answer 67 500  or 75 000 or 90 000 x 100 One part correct 90 000  100 000 120 000 1 75% 3 rd Calculate the % of debtors written off as bad debts at the end of the 3 month following the credit sales transaction month. Workings Answer 90 000 – 67 500 – 19 800 (2 700  ÷ 90 000 ) x 100 OR: 100 000 – 75 000 – 22 000 (3 000 ÷ 100 000) x 100 One part correct two marks one mark 3% see above 19 800/90 000 or 22 000/100 000 OR: 100% – 75% – 22% –97% two marks one mark one m.mark one mark 4 6.3.1 The office workers are unhappy with the increase that Thembi gave them on 1 October 2019. Explain what she should say to them. Provide TWO points. Quote figures or a calculation. Only one figure required per point. They received a (large) increase of 20% (unbudgeted; which is more than inflation) (1 840 / 9 200 = 20%) part-marks for partial or ‘Large’ need not be mentioned if 20% is provided. incomplete answers Sales target (under by R110 000) / GP target (under by   R32 000) not reached but increase in wages (20%) Any two valid and granted different points The director took a R10 000 drop in pay / reduced from   R50 000 to R40 000 / by 20% Figures/Calculations They received training costing R40 000 (R25 000 over budget) which will benefit them in future 6 Copyright reserved Please turn over

Downloaded from hlayiso.com Accounting 17 DBE/November 2019 NSC – Marking Guidelines 6.3.2 Thembi pays her son, Jacob, on a part-time basis to deliver and install carpets for customers. She budgets R2,80 per metre for this. Comment on the control of this expense. Quote figures or a calculation. Comment on poor control / ethics in September  Figure/s  Comment on good control in October  Figure/s  Expected responses for September: He was overpaid in September (even though he did not meet target) Figures: R14 000 / R10 640 / R3 360 Expected responses for October: He was paid correctly (although it was over-budget; due to improved sales) Figures: R 16 800 / R14 000 / R2 800 Workings: September: Workings: October: Budget: 5 000 x 2,80 =R14 000 Budget = R14 000 Actual should be 3 800 x 2.80 = R10 640 but spent R14 000 Actual should be : 6 000 x 2.80 = R16 800 4 6.3.3 A new competitor commenced trading in the area on 1 September 2019. Provide figures to illustrate the impact on sales in September. Comment  Figure/s Compare budgeted Sales to actual Sales Sales budget was R490 000 and the actual was R380 000 / R110 000 under the budgeted amount / 22,4% drop from expected OR: Compare expected metres to actual metres Two marks Sales dropped from 5 000m2 budgeted to 3 800m2 actual / 1 200m2 under budget / 24% less than expected. 2 Explain THREE decisions that Thembi took in October in response to the new competitor. Quote figures or a calculation. Explanation (with figures) Promoted credit sales R296 000 above budget (R326 000 increase    in actual) with incentives as opposed to cash sales (e.g. discount or Any THREE valid extended payment period) and different Reduced the selling price per m to R88 per m (from R100) / decisions Reduced mark up from 67% to 47%    Spent R40 000 on training but budgeted only R15 000 / Training Figures increased to R40 000 in October (over-budget by R25 000) Changed the salary structure of the salesman from a fixed salary of R20 000 pm to a commission of R52 800/10% of sales 6 6.3.4 Calculate the amount she will actually have to pay the creditors in November 2019. Workings Answer 528 000 X 60/88    R171 000 360 000 x 50% x 95% one part correct Oct COS 4 TOTAL MARKS 40 Copyright reserved