ACCOUNTING P1 GR10 MEMO NOV2020 English hlayiso.com

NATIONAL SENIOR CERTIFICATE GRADE 10 NOVEMBER 2020 ACCOUNTING P1 MARKING GUIDELINE (EXEMPLAR) MARKS: 150 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 items). 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. 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. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark. 9. 'Operation' means 'Check operation'. 'One part correct' means 'Operation and one part correct'. Note: Check operation must be +, –, x or ÷ or per candidates’ response. 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. In such cases, do not award the method mark. Indicate by way of  12. Be aware of candidates who provide valid alternatives beyond the marking guideline. 13. Codes: f = foreign item; p = placement/presentation. This marking guideline consists of 6 pages.

2 ACCOUNTING P1 (EC/NOVEMBER 2020) QUESTION 1: ACCOUNTING CONCEPTS AND ACCOUNTING EQUATION 1.1 CONCEPTS 1.1.1 C  1.2.2 E  1.2.3 B  1.2.4 A  4 1.2 ACCOUNTING EQUATION NO. ASSETS OWNER’S EQUITY LIABILITIES REASON EFFECT REASON EFFECT REASON EFFECT 1.2.1 Bank +1 000 Interest on fixed +1 000 deposit 1.2.2 Equipment +/- Bank 24 000 1.2.3 Interest Paid  -288 Creditors’ +288 control 1.2.4 (a) Bank +2 700 Sales +2 700 (b) Trading stock -1 800 Cost of sales -1 800 20 TOTAL MARKS 24 Copyright reserved Please turn over

(EC/NOVEMBER 2020) ACCOUNTING P1 3 QUESTION 2: CONCEPTS AND INCOME STATEMENT 2.1 2.1.1 D  2.1.2 C  2.1.3 B  2.1.4 A  4 2.2.1 INCOME STATEMENT OF KINGSTON TRADERS FOR THE YEAR ENDED 29 FEBRUARY 2020 Sales (950 000  + 18 200  – 14 000 )  954 200 Cost of Sales (400 000  + 13 000 )  (413 000) Gross Profit  541 200 Other operating Income  123 830 Discount received 830 Rent income (39 000 – 3 000)  36 000 Fee Income (82 600 + 2 400 )  85 000 Trading stock surplus (231 000 – 13 000 – 220 000) 2 000 Gross operating income 665 030 Operating Expenses  (258 560) Discount allowed 1 260 Stationery 8 800 Salaries and wages (168 000  + 10 000 ) or (168 000  + 7 300  + 2 700 )  178 000 Insurance (16 800  – 2 400 )  14 400 Bad Debts (1 300  + 700 )  2000 Consumable Stocks (5 500  – 500 )  5 000 Depreciation (32 000  + 17 100 )  49 100 Operating Profit  406 470 Interest Income (900 + 1 870 ) 1  2 770 Profit before Interest Expense  409 240 Interest Expense 2  (30 800) Net Profit for the Year  378 440 45  operation, one part correct; Foreign entries -1 (max.2), accept alternative format (two columns) TOTAL MARKS 49 Copyright reserved Please turn over

4 ACCOUNTING P1 (EC/NOVEMBER 2020) QUESTION 3: CONCEPTS, FIXED ASSETS, BALANCE SHEET, INTERPRETATION AND INTERNAL CONTROL 3.1 CONCEPTS 3.1.1 Return on investment  3.1.2 Liquidity  3.1.3 Profitability  3.1.4 Solvency  (4) 3.2.1 (a) R1 200 000 – R600 000 = R600 000   (2) (b) R700 000 – R280 000 = R420 000   (2) (c) R420 000 x 20/100 = R84 000 (old) R145 000  x 20/100 x 9/12 = 21 750 (new) R105 750 (6) (d) R420 000 + R145 000  – R105 750 = R459 250 (4) 14 3.2.2 BALANCE SHEET OF OBBIE TRADERS – 30 APRIL 2020 ASSETS NON-CURRENT ASSETS  2 049 200 Fixed (tangible) assets  1 931 250 Financial assets: Fixed deposit balancing figure  117 950 CURRENT ASSETS operation, one part correct  550 800 INVENTORIES 270 200 TAOR (162 000+ 3 200+ 1 200) operation, one part correct  166 400 CACE (112 000 + 2 200 ) operation, one part correct  114 200 TOTAL ASSETS  2 600 000 EQUITY AND LIABILITIES OWNER’S EQUITY 2 186 400 NON-CURRENT LIABILITIES 280 000 Loan (423 200 – 103 200 – 40 000) operation, one part correct  280 000 CURRENT LIABILITIES  133 600 TAOP (86 000 + 5 800 + 1 800) operation, one part correct  93 600 Short-term loan  40 000 TOTAL EQUTY AND LIABILITIES 2 600 000 22 Copyright reserved Please turn over

(EC/NOVEMBER 2020) ACCOUNTING P1 5 3.3 Financial indicators (a) 550 800  Current ratio = 133 600  = 4,1 : 1  3 (b) 550 800  – 270 200  Acid test ratio = 133 600  = 2,1 : 1  4 (c) No. - The current ratio improved from 0,9 : 1 in 2019 to 4,1 : 1 in 2020.  - The acid test ratio also improved from 1,3 : 1 in 2019 to 2,1 : 1 in 2020.  - Both ratios show an improvement.  - These ratios indicate that that business could be able to meet its short- term obligations. The business should continue to try and improve these ratios.  4 3.4 This is not essential as the return being earned by the business exceeds the interest rate on the loan.  However, it does not make sense to have surplus cash invested at a lower rate than the 15% (e.g. the fixed deposit). It would make sense to repay the loan provided there is no other urgent use for the money.  4 TOTAL MARKS 55 Copyright reserved Please turn over

6 ACCOUNTING P1 (EC/NOVEMBER 2020) QUESTION 4: WAGES JOURNAL AND INTERNAL CONTROL 4.1 CONCEPTS 4.1.1 E  4.1.2 D  4.1.3 A  4.1.4 B  4 4.2.1 R110 000 – R25 000  = R85 000  2 4.2.2 Deductions are the payments that are made by the employer on behalf of the employee,  while contributions are made by the business of the employee and are paid in addition to the deductions, and these employer contributions are additional expenses to the business.  4 4.2.3 R25 000 x R25 R35 000  R110 000  – R75 000  = R35  = 1 000 hours  5 4.2.4 R7 000  + R14 000  = R21 000  3 4.2.5 - Accuracy in the workplace  - Increased productivity  - Track absenteeism  - Track employees work hours  - Increased employee satisfaction  (Any 2 relevant) 4 TOTAL MARKS 22 TOTAL: 150 Copyright reserved Please turn over