# Accounting Grade 12 Paper 1 GP Prelim 2023 Memo (English) > Grade 12 Accounting Paper 1 memorandum from the GP Prelim 2023 (English), 10 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-p1-english-memo/ec961189-996f-42af-b086-cc25813efb5f - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Language: English - Document type: Memorandum - Year: 2023 - Exam period: GP Prelim - Paper: 1 - Curriculum: CAPS - Pages: 10 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 12](https://www.hlayiso.com/library/grade-12) › [Accounting](https://www.hlayiso.com/library/grade-12/accounting) › [Accounting Grade 12 Paper 1 GP Prelim 2023 Memo (English)](https://www.hlayiso.com/library/accounting-p1-english-memo/ec961189-996f-42af-b086-cc25813efb5f) ## About this document Accounting · Grade 12 · GP Prelim · 2023 · English. Memorandum, 10 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 PREPARATORY EXAMINATION 2023 MARKING GUIDELINES ACCOUNTING PAPER 1 (10711) 10 pages 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 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 workings 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. Where penalties are applied, the marks for that section of the question cannot be a final negative. 8. Operation means 'check operation'. 'One part correct' means operation and one part correct. Note: Check operation must be +, -, x, ÷, or per memo. 9. Where method marks are awarded for one part correct, the marker must inspect the reasonableness of the answer and at least one part must be correct before awarding the mark. If a figure has earned a method-mark, this will be regarded as ‘one part correct’. 10. In calculations, do not award marks for workings if numerator and denominator are swapped – this also applies to ratios. 11. 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 . 12. Be aware of candidates who provide valid alternatives beyond the marking guideline. 13. Codes: f = foreign item; p = placement/presentation. ### Page 2 Downloaded from hlayiso.com 10711/23 QUESTION 1 1.1 Calculate: Value of closing stock WORKINGS ANSWER 78 + 631 – 602 10 500 x 100/125 898 800  107  x 8 400  one part correct OR 5 955 600 – 5 056 800 two marks two marks 5 1.2 (i) Calculate: Accumulated depreciation on vehicles # ignore brackets * one part correct WORKINGS ANSWER 814 000 – 519 200 294 800  # 2 (ii) Calculate: Depreciation on equipment for the year WORKINGS ANSWER Old 561 000 × 10% = 56 100 CV is only 50 000 50 000 – 1 49 999 * (If R50 000 or R1 is shown) 52 749 * # New 55 000 × [10% × 6/12] 2 750 * one component must be correct 5 (iii) Calculate: Disposal at carrying value on vehicles WORKINGS ANSWER one component must be correct 99 000 x [20% x 9/12] 165 000  – (66 000  + 14 850 *) 84 150 *  99 000 two marks 5 1.3 RETAINED INCOME NOTE ON 30 JUNE 2023 *one part correct $ bracket to earn full marks Balance at beginning of the year Balancing figure 794 000  Net profit after tax 721 000  Shares repurchased (1 500 000 – 1 300 000) (2 025 000 – 1 755 000) (30 000) $ 200 000  x 15/100 OR R270 000 x 0,15/1,35 Do not accept R300 000 Ordinary share dividends (440 000) Interim dividends 1 500 000 x 12/100 180 000  Final dividends 260 000  10 Balance at the end of the year 1 045 000 2 ### Page 3 Downloaded from hlayiso.com 10711/23 1.4 Statement of Financial Position on 30 June 2023 * one part correct ASSETS NON-CURRENT ASSETS TA – CA 3 119 800  Fixed assets NCA – FD 2 537 800  Fixed deposit 2 582 000 CURRENT ASSETS CL x 1,2 1 407 600  Inventory see 1,1 898 800  Trade and other receivables 364 600 * (Dep. W & E) (transfer) (Dir. fees) (SARS I/T) 209 100 + 11 000 – 1 500 + 96 000 + 50 000  Cash and cash equivalents balancing figure 144 200  TOTAL ASSETS TA must be the same as TE&L 13 4 527 400  EQUITY AND LIABILITIES ORDINARY SHAREHOLDERS' EQUITY 2 800 000 Ordinary share capital 1 755 000 Retained income 1 045 000 NON-CURRENT LIABILITIES 554 400 Mortgage loan (609 840 + 83 160) (693 000 x 20%) 554 400 693 000  – 138 600  four marks OR 487 872 + 66 528 4 CURRENT LIABILITIES 1 173 000 * Trade and other payables (transfer) (acc exp Rent) 774 400 * 763 860  – 1 500  + 12 040  Shareholder for dividends 260 000 & Current portion of loan 138 600 & TOTAL EQUITY AND LIABILITIES 9 4 527 400 * 28 & inspect if included with T&OP -1 foreign items max -2 -1 presentation max -2 TOTAL MARKS 55 3 ### Page 4 Downloaded from hlayiso.com 10711/23 QUESTION 2 2.1 2.1.1 Non-current liability  2.1.2 Outflow of cash  2.1.3 Current asset  3 *Accept alternative methods such as ledger/reversal of signs #Ignore brackets 2.2.1 Calculate: Inventory amount at the end of the financial year. WORKINGS ANSWER 1 450 000 + 390 000 1 840 000  2 Calculate: Income tax paid WORKINGS ANSWER 102 000  + 358 440  – 72 000  OR –102 000 – 358 440 + 72 000 388 440 *# one part correct one mark one mark one mark OR SARS (Income Tax) 72 000 102 000 Paid 388 440 358 440 4 Calculate: Dividends paid WORKINGS ANSWER (3 500 000 x 5/100) one mark OR (490 000 – 315 000) one mark 240 000 *# one part correct 175 000  + 65 000  3 Calculate: Total purchases of fixed assets WORKINGS ANSWER Vehicles three marks 44 175  x 100/15 x 12/6  589 000 651 000 # Equipment 62 000  5 4 ### Page 5 Downloaded from hlayiso.com 10711/23 *one part correct #must be in brackets 2.2.2 CASH EFFECTS OF FINANCING ACTIVITIES 1 849 900 * Proceeds from shares issued (300 000 x 4,2) 5 000 000 * 13 440 000  + 1 260 000 * – 9 700 000  Repurchase of shares (1 500 000) # Repayment of loans (4 500 500 – 2 850 400) (1 650 100) # 8 2.2.3 NET CHANGE IN CASH AND CASH EQUIVALENTS 862 700 – 3 132 600 + 1 849 900  see 2.2.2. (420 000) *# –2 299 900 two marks Cash and cash equivalents at the beginning 382 000  Cash and cash equivalents at the end operation (38 000)  6 2.2.4 Calculate: % Net profit before tax on sales WORKINGS ANSWER 1 194 800  x 100 14,5%  8 240 000  1 one part correct 937 880 x 100 11,4% 8 240 000 1 one part correct 3 Calculate: Current ratio WORKINGS ANSWER 1 430 000  : 650 000  2,2 : 1  one part correct shown as x : 1 3 Calculate: Dividends per share WORKINGS ANSWER (315 000/3 500 000) 14c  5c  + 9c  OR 0,05 + 0,09 one part correct accept R0,14 4 Calculate: % Return on shareholders’ equity WORKINGS ANSWER 836 360  x 100 6,9%  12 126 925  1 one part correct ½ (13 941 500 + 10 312 350) 4 TOTAL MARKS 45 5 ### Page 6 Downloaded from hlayiso.com 10711/23 QUESTION 3 3.1.1 Cruz has been concerned about the company’s working capital over the years. He proposed a new approach to directors by converting assets into cash quickly. Quote TWO financial indicators and explain why his concern is justify. Financial indicator   Explanation with figures   • Acid test ratio decreased from (0,9 : 1) to 0,7 : 1/by 0,2:1 • Stock turnover rate dropped from (8 times) to 5,2 times/by 2,8 times 4 3.1.2 A shareholder has proposed that Cruz, the CEO, to acquires a loan from his wife, who is a bank consultant. Cruz did not agree to this proposal. Explain why you agree with him. Provide TWO points. Financial indicators   trend and figures   Explanation   (mention risk/ gearing/compare with interest rate) Debt equity ratio ROTCE increased from (0,4: 1) to 0,5: 1 / by decreased from 20% to 13% / by 7% 0,1:1 base point Increased (high) risk as compared to Negative gearing previous year. / lower than the interest paid on the loan of 14% / the company is not making a good use of loans to generate profit. 6 3.1.3 Provide a calculation which agrees with their decision • In 2022: 90/93 x 100 = 96,8%  of EPS was distributed as dividends OR: retained 3,2% two marks • In 2023: 57/81 x 100 = 70,4%  of EPS was distributed as dividends OR: retained 29,6% two marks OR: 96,8% – 70,4% = 26,4% four marks 4 Give ONE reason why they took this decision. Valid explanation  • They decided to retain funds for future developments in the business. • They want to improve cash flow. • Equalisation of dividends for the future 2 6 ### Page 7 Downloaded from hlayiso.com 10711/23 3.1.4 Comment on the % return and earnings per share of the company. (a) Quote TWO financial indicators with figures. Financial indicator (with trend)   explanation with figures   • ROSHE declined from 9,2% to 5% (by 4,2%)/compared to alternative investments. (Fixed deposits offer 6% in 2021 and 7% in 2022). • EPS declined from 93 cents to 81 cents (by 12 cents; or by 12,9%)/ representing a drop in profitability OR Earnings yield: 93/820 (11,34%) to 81/785 (10,31%) – using NAV 93/840 (11,07%) to 81/760 (10,65%) – using MP 4 Comment on the share price on the JSE and how the % return and (b) earnings per share have affected the share price. Quote figures. Comment on the market price (MP)  (with figures)  • The decline in earnings has led to a decline in the share price on the JSE from (840 cents) to 760 cents (by 80 cents/9,5%) / a drop in demand for shares/investor confidence OR Comparison of MP with net asset value (NAV)  (with figures)  • The MP (760c) is lower than the Net Asset value (785c) by 25 cents/which was 20c higher than NAV in 2022/indicating declining demand. 2 3.1.5 State TWO different points to justify their concern. Quote figures or (a) financial indicators Any TWO valid points (with figures)   POINT 1 • Cruz has given himself a 25% increase. • R500 000 increase is more than the fees of the other directors as they did not receive an increase (maintained at R1 000 000 each). POINT 2 • EPS dropped from 93c to 81c or (by 12c) • ROSHE dropped from 9,2% to 5% or 4,2 base points 4 7 ### Page 8 Downloaded from hlayiso.com 10711/23 (b) Explain why the other directors were unhappy with the price paid for the shares repurchased from C. Cruz. State TWO points. Quote financial indicators and figures to support EACH point. Figures   Explanation   POINT 1 The shares were repurchased for R4,80 above the net asset value per share (1 300c – 820c) / 59% above NAV / received an inflated price / compromised the cash flow of the business. POINT 2 The shares repurchase price is R4,60 more than the market price of the shares (1 300c – 840c) / this is an unreasonable price as there is no demand for the shares. 4 (c) Provide a calculation and comment on whether the repurchase of these shares affected C. Cruz's shareholding status or not. WORKINGS ANSWER 55,4%  1 795 000 x 100 one part correct 3 240 000 1 must be a % Comment He is still the majority shareholder/shareholding decreased from 57,2% to 55,4%  3 (d) Explain why the public was not interested in buying the new shares issued at R7,90 per share. Quote ONE financial indicator with a figure. (excluding EPS AND ROSHE). Financial indicator with figure  Explanation  • DPS dropped from (90c) to 57c – shareholders not receiving a reasonable return. • R7,90 is not a good deal when compared to the market price of R7,60/ (R8,40), especially if they were then prepared to sell the shares at R6,70. It indicates the company's desperate attempt to raise capital 2 TOTAL MARKS 35 8 ### Page 9 Downloaded from hlayiso.com 10711/23 QUESTION 4 4.1 Provide TWO key functions for which the human resources division may be responsible. Any TWO valid points   • Recruiting, hiring and retaining talent. • Development and training of employees. • Compensation and benefit of employees. • Compliance and workplace safety. • Ensure fairness in the workplace. • Investigate misconduct and unethical behaviour. • Handling disciplinary measures. • Induction of newly appointed workers. 2 List TWO qualities that they may consider in a prospective candidate for a management position. Any TWO valid points   • Leadership skills • Professional experience / Track record of previous position held. • Good communication skills • Time management skills • Good administration skills • Good decision maker and resolve conflicts promptly 2 Explain the role of a CEO in a company. Valid explanation  part-mark for unclear/incomplete answer CEO is responsible for making major corporate decisions and managing the overall operations and resources of the company. 2 What impact would the image of the company have on the market price of shares? Explain ONE point. Valid explanation  part-mark for unclear/incomplete answer Good image Bad image • Increase the share price and • Decrease the share price and invite potential investors to buy existing shareholders will sell shares. their shares/discourage potential investors from buying shares. 2 9 ### Page 10 Downloaded from hlayiso.com 10711/23 4.2 Provide TWO possible questions that a concerned stakeholder may have raised at the meeting with human resources. Valid explanation   • How has this headline affected the company? • Why was a disciplinary hearing not conducted with the CEO? • What action will be taken against the CEO if he continues to mistreat other stakeholders? • Does the company have a policy guiding senior managers on how to treat other stakeholders? • What measures can be implemented to prevent such behaviour in future? 2 Explain ONE strategy that Mangray Limited can use to involve its employees in collective decision-making. Provide a reason to motivate your answer. Explanation  Reason  • Conduct employee opinion Yield better ideas and improved surveys to provide feedback on results/Employees inputs can be corporate decisions. taken into account. • Create employee councils that Employees will be represented in all act as representatives on structures/Promote open door employee-related matters / Get policies/Promote common financial staff representation on the board. language. • Focus on treating employees Enhance better teamwork/Promote fairly without expecting any transparency and honest favours. suggestions/inputs. • Send employees to workshops Increase productivity/Increase that promotes the future vision of confidence, skill and compete with the company. current trends. 3 “Good corporate governance helps companies to thrive and compete.” Provide TWO points to show why you agree with this statement. Any TWO valid explanations   • It creates a clear vision of the future and gives targets • Facilitates the attraction of potential investors. • It improves performance and achieves better financial results. • Unleashes new ideas and respond to new opportunities. • Conduct employee opionion surveys to provide feedback on corporate decisions. 2 TOTAL MARKS 15 TOTAL: 150 10 ## Related documents - [ACCOUNTING P1 GR12 MEMO JUNE 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-memo-june-2023-english/b15a4456-2317-4298-9022-fc735fdc6214) — Accounting · Memo · 2023 · Eng - [ACCOUNTING P1 GR12 AB JUNE 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-ab-june-2023-english/bd3063b8-4a97-4989-8498-a76ffb82e60a) — Accounting · QP · 2023 · Eng - [ACCOUNTING P1 GR12 QP SEPT 2023 English](https://www.hlayiso.com/library/accounting-p1-gr12-qp-sept-2023-english/86b103e1-05b3-4ddd-9077-02c461ae7d17) — Accounting · QP · 2023 · Eng - [Gr 12 Accounting P1 (English) June 2024 Possible Answers](https://www.hlayiso.com/library/gr-12-accounting-p1-english-june-2024-possible-answers/11d6484c-77b1-4a71-8799-a6e1177c4dbc) — Accounting · Memo · 2024 · Eng - [ACCOUNTING P2 GR12 ANSWER BOOK JUNE 2023 English](https://www.hlayiso.com/library/accounting-p2-gr12-answer-book-june-2023-english/11493bdc-95ff-4293-b727-2b3a22027be3) — Accounting · Addendum · 2023 · Eng - [ACCOUNTING P2 QP GR12 SEPT 2023 English](https://www.hlayiso.com/library/accounting-p2-qp-gr12-sept-2023-english/eb464289-6949-44e1-9c80-4e527d6a3926) — Accounting · QP · 2023 · Eng ## More from Grade 12 Accounting - [Accounting](https://www.hlayiso.com/library/accounting/8f42a6a4-9593-4d36-86b1-d890dd1bb1bf) — Guide - [ACCOUNTING P1 GR12 AB JCT ENG D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-ab-jct-eng-d-watermark/77ae8297-53f7-47b3-8e29-57bd38f30483) — Addendum · 2025 · Eng - [ACCOUNTING P1 GR12 QP JCT 2025 ENG D watermark](https://www.hlayiso.com/library/accounting-p1-gr12-qp-jct-2025-eng-d-watermark/84d92eb0-f5bd-4442-bb6d-c55cdc52e25d) — QP · 2025 · Eng - [ACCOUNTING P2 QP GR12 JCT 2025 ENG D watermark](https://www.hlayiso.com/library/accounting-p2-qp-gr12-jct-2025-eng-d-watermark/13425f71-aba6-4328-b084-d9b108884315) — QP · 2025 · Eng - [Accounting P1 (English) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p1-english-june-2025-answer-book/7e96e433-56f8-43a1-9a38-c68c465746dd) — Addendum · 2025 · Eng - [Accounting P2 (English ) June 2025 Answer Book](https://www.hlayiso.com/library/accounting-p2-english-june-2025-answer-book-1/73bffe7c-1c96-49bd-af78-abb8db8c6618) — Addendum · 2025 · Eng ## Collection - [Grade 12 past papers](https://www.hlayiso.com/grade-12/past-papers) --- Hlayiso: free CAPS and IEB past papers, memos, notes and study guides for South African learners. 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