Accounting Grade 10 P1 Eastern Cape November 2018 Memo (Eng)

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 10 NOVEMBER 2018 ACCOUNTING P1 MARKING GUIDELINE This marking guideline consists of 10 pages.

Downloaded from hlayiso.com 2 ACCOUNTING P1 (Marking guideline) (EC/NOVEMBER 2018) GENERAL RULES: 1. Award full marks for the correct final answers. If the answer is incorrect, mark the workings provided. If workings figure/amount is shown as a final answer, allocate the working mark. 2. “Method” marks are denoted by  • In calculations and final totals, at least one part of the workings must be correct to earn the mark. • In cases where answers of previous questions must be used, check the transfer. • Ignore brackets on statements, but check the operation before awarding marks. 3. Where penalties are applied, the marks for that section cannot be a negative. (foreign items) 4. For questions requiring explanations and comments, award part-marks. A good explanation will normally mention and explain a point. Beware of alternative wording reflecting the same points. This marking guideline provides some explanations – they are not conclusive. Read the candidates’ responses and give credit for their interpretations. 5. Where appropriate/acceptable, accept recognisable abbreviations. 6. Educators are expected to work through the entire paper and make reasonable adjustments within the framework of the mark allocation. Copyright reserved Please turn over

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(EC/NOVEMBER 2018) Downloaded from hlayiso.com ACCOUNTING P1(Marking guideline) 3 QUESTION 1: ACCOUNTING CONCEPTS AND ACCOUNTING EQUATION 1.1 ACCOUNTING CONCEPTS 1.1.1 C  1.1.2 A  1.1.3 B  1.1.4 A  1.1.5 A  5 1.2 ACCOUNTING EQUATION INTERNAL GENERAL LEDGER INFLUENCE ON No DOCUMENT ACCOUNT DR ACCOUNT CR ASSETS EQUITY LIABILITIES 1.2.1 Bank statement  Bank  Capital  +180 000 +180 000 1.2.2 Cheque Equipment  Bank  ± 3 800 counterfoil 1.2.3 Duplicate invoice Debtors Control  Sales  + 2 800  + 560  Cost of sales  Trading stock  - 2 240 1.2.4 Original invoice Trading stock  Creditors control  +5 100 + 5 100  1.2.5 Duplicate Bank  Debtors control  -2 660  - 2 660  receipt Discount allowed  Debtors control  - 140  - 140  30 QUESTION 1 35 Copyright reserved Please turn over

Downloaded from hlayiso.com 4 ACCOUNTING P1(Marking guideline) (EC/NOVEMBER 2018) QUESTION 2: ETHICS, INTERNAL CONTROL AND WAGES JOURNAL 35 marks; 30 minutes 2. ETHICS 2.1 2.1.1 C  2.1.2 G  2.1.3 D  2.1.4 A  2.1.5 F  5 2.2.1 Why does the government set minimum wages? Any relevant answer  • To protect the interests of the poor • To reduce poverty 2 2.2.2 Would you regard the actions of these small businesses as ethical? Motivate your answer. No,  It is against the labour law  3 Copyright reserved Please turn over

(EC/NOVEMBER 2018) Downloaded from hlayiso.com ACCOUNTING P1(Marking guideline) 5 2.3 INTERNAL CONTROL AND WAGES JOURNAL 2.3.1 B Mills is frequently late for work and leaves early on a Friday. What steps should the owner of Super Clean Cleaning Services take to prevent this from becoming a habit of his staff? Any relevant answer Excellent  Good  Fair  • Supply each employee with a code of conduct • Investigate the reason • Give Mills a written warning 3 2.3.2 Name TWO internal control measures that the owner of Super Clean Cleaning Services can implement in reaction to the complaints about smoking in public areas and poor productivity of his employees. Any relevant answer   • Appoint a supervisor • Convene a meeting with employees about the complaints • Do regular spot checks at clients’ premises 4 2.3.3 WAGES JOURNAL OF SUPER CLEAN CLEANING SERVICES FOR THE WEEK ENDING 26 OCTOBER 2018 BASIC OVERTIME GROSS DEDUCTIONS NETT CONTRIBUTIONS EMPLOYEE WAGE HOURS R/h R/c WAGE PAYE UIF PENSION TOTAL WAGE UIF PENSION Kunene  800 5  30  150  950 171 95  64 330  620  95  128 Xaxa 800  800  144 80 64 288  512 80 128 Mills 700  700  126  70  56 252  448 70  112 18 QUESTION 2 35 Copyright reserved Please turn over

Downloaded from hlayiso.com 6 ACCOUNTING P1(Marking guideline) (EC/NOVEMBER 2018) QUESTION 3: NOTES TO FINANCIAL STATEMENTS AND BALANCE SHEET 40 marks; 30 minutes 3.1 NOTES TO THE FINANCIAL STATEMENTS Tangible assets LAND AND VEHICLES EQUIPMENT BUILDINGS Cost price  130 000 45 000 50 000 Accumulated depreciation (25 260) (20 200) Carrying value (01/03/17) 130 000  19 740 29 800 Movements Acquisition 20 000  40 000 Depreciation  (7 948)  (7 500) Carrying value (28/02/18)  150 000 51 792  22 300 Cost price 150 000  85 000 50 000 Accumulated depreciation  (33 208) (27 700) 10 Inventory Trading stock 31 918  Stationery 315  32 233  3 Trade and other receivables Debtors control 26 882  Accrued income 611  27 493  4 Trade and other payables Creditors control 32 860  Accrued expense 4 060  Income received in advance 7 600  44 520  6 Copyright reserved Please turn over

Downloaded from hlayiso.com 3.2 BALANCE SHEET OF WORLD WIDE TRADERS ON 28 FEBRUARY 2018 ASSETS Non-current assets  249 092 Tangible assets  224 092 Financial assets  Fixed deposit  25 000 Current assets 75 626 Inventory  32 233  Trade and other receivables  27 493 Cash and cash equivalents 15000+600+300  15 900 TOTAL ASSETS 324 718 EQUITY AND LIABILITIES Owner’s equity  160 198 Non-current liabilities 100 000 Loan 120 000 – 20 000 100 000 Current liabilities 64 520 Trade and other payables  44 520 Short term loan  20 000 TOTAL EQUITY AND  324 718 LIABILITIES 17 QUESTION 3 40 QUESTION 4: ACCOUNTING CONCEPTS AND ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS 40 marks; 30 minutes 4.1 ACCOUNTING CONCEPTS 4.1.1 Profitability  4.1.2 Return on investment  4.1.3 Solvency  4.1.4 Liquidity  4 4.2 SWIFT TRADERS All calculations to be rounded off to ONE DECIMAL PLACE. Copyright reserved Please turn over

Downloaded from hlayiso.com 4.2.1 Current ratio 46 500 + 33 000  + 2 500  : 26 000  + 24 000  82 000 : 50 000 1,6 : 1  (one part correct, must be x : 1) 6 4.2.2 Acid test ratio 82 000 – 46 500  : 50 000  35 500 : 50 000 0,7 : 1  (one part correct, must be x : 1) 3 4.2.3 Compare these results with those of 2017 and comment on the liquidity of the business. Current ratio decreased from 2 : 1 to 1,6 : 1  Acid test ratio decreased from 1,5 : 1 to 0,7 : 1  The liquidity of the business is deteriorating and the business might find it difficult to pay short term liabilities  4 Copyright reserved Please turn over

Downloaded from hlayiso.com 4.2.4 Calculate the percentage return on average owner’s equity. 90 000  X 100 ½ (400 000 + (400 000 + 90 000 – 70 000) ) 90 000 X 100 410 000 = 22%  6 4.2.5 Should the owner be satisfied with this return? Motivate your answer. Yes  The return is more than what other safe investments yield  3 4.3 LS COMPUTERS 4.3.1 Calculate the percentage mark-up for 2018. 210 000  X 100 600 000  35%  3 4.3.2 Give TWO reasons for the deviation from the target mark-up of 40%. Any valid answer   Wrong calculation of selling price Sale of old stock Damaged goods 4 Copyright reserved Please turn over

Downloaded from hlayiso.com 4.3.3 The percentage mark-up for 2017 was 50%. What influence did the change in mark-up have on the business? Quote figures to support your answer. Any valid answer with figures   • Increase in sales from 645 000 to 810 000 • Increase in net profit from 136 000 to 150 000 2 4.3.4 LS Computers spent less on national advertising and focused on local advertising. Was this decision to their advantage? Quote figures to support your answer. Yes , explanation  figures  Much cheaper advertising locally (55 000 to 30 000) and sales increased (645 000 to 810 000) 3 4.3.5 What percentage of sales is spent on salaries and wages? 64 800 X 100 810 000 8%  2 QUESTION 4 40 TOTAL: 150 Copyright reserved Please turn over