# Accounting Grade 12 P1 Eastern Cape June 2022 Memo (English) > Grade 12 Accounting Paper 1 memorandum from the Eastern Cape June 2022 (English), 11 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-p1-gr12-memo-june-2022-english/1c57c5ce-4c7a-43c6-8a89-654cb1d2b825 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Language: English - Document type: Memorandum - Year: 2022 - Exam period: Eastern Cape June - Paper: 1 - Curriculum: CAPS - Pages: 11 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 P1 Eastern Cape June 2022 Memo (English)](https://www.hlayiso.com/library/accounting-p1-gr12-memo-june-2022-english/1c57c5ce-4c7a-43c6-8a89-654cb1d2b825) ## About this document Accounting · Grade 12 · Eastern Cape June · 2022 · English. Memorandum, 11 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 NATIONAL SENIOR CERTIFICATE GRADE 12 JUNE 2022 ACCOUNTING P1 MARKING GUIDELINE MARKS: 150 MARKING PRINCIPLES: 1. Unless otherwise indicated 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 answers. 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 marking guidelines 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. 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. 9. ‘Operation’ means ‘Check operation’. ‘One part correct’ means ‘Operation and one part correct’. NOTE: Check operation must be +, –, x or ÷ or as per marking guidelines. 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  Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one 12. comment could contain different aspects. 13. Codes: f = foreign item; p = placement/presentation. This marking guideline consists of 11 pages. ### Page 2 2 ACCOUNTING P1 (MARKING GUIDELINE) (EC/JUNE 2022) QUESTION 1 Statement of Comprehensive Income for the year ended 1.1 28 February 2022 Sales 8 085 500  + 4 500  8 090 000 * Cost of sales Sales x 100/200 (4 045 000)  Gross profit S – COS 4 045 000  6 Other income operation 134 360  Discount received 23 190 Bad debts recovered 11 760  + 2 240  14 000  Provision for bad debts-adjustment 34 120 – 29 660 4 460  Rent income 85 100 + 7 610  92 710 * Gross income GP + OI 4 179 360  10 Operating expenses GI – OP (2 577 170)  Advertising 404 500 Salaries and wages 956 180 Audit fees 89 970 Depreciation 123 220 Trading stock deficit 18 500 Consumable stores 33 900  – 5 900  28 000  Bad debts 33 260  + 2 240  35 500  Insurance 48 750  – 7 500  41 250 * Directors’ fees 825 000  + 25 000  850 000 * Sundry expenses balancing figure 30 050  16 Operating profit 1 602 190 Interest income 11 090  Profit before interest expense OP + Int inc 1 613 280  Interest expense 703 800 – 610 320 (93 480) * Net profit before income tax Pbie – Int exp 1 519 800  Income tax NPbt X 30% (455 940)  Net profit after tax NPbt – Inc tax 1 063 860  8 *one part correct – 1 foreign items (Max. -2) misplaced: mark workings only 40 Copyright reserved Please turn over ### Page 3 (EC/JUNE 2022) ACCOUNTING P1 (MARKING GUIDELINE) 3 1.2 RETAINED INCOME Balance on 1 March 2021 balancing figure 507 140  Net profit after tax see 2.1 1 063 860  Shares repurchased 40 000 x 80c ignore brackets (32 000)  Ordinary share dividends ignore brackets (570 000)  Interim dividends 237 500  Final dividends OSD – Interim div 332 500  Balance on 28 February 2022 969 000 7 1.3 STATEMENT OF FINANCIAL POSITION ON 28 February 2022 EQUITIES AND LIABILITIES SHAREHOLDERS’ EQUITY 9 044 000  Ordinary share capital 950 000 x 8,50 8 075 000  Retained income 969 000 3 Non-current liabilities 603 800 Loan: Allan Bank 703 800 – 100 000 603 800 * 2 Current liabilities operation 1 069 500  Trade and other payables 562 500 + 25 000  + 36 000  13 500  637 000 * Dir. Fees PAYE Pension fund Shareholders for dividends see 2.2 332 500  Current portion of loan see NCL 100 000  TOTAL EQUITY AND LIABILITIES SE + NCL + CL 10 717 300  8 * one part correct 13 TOTAL MARKS 60 Copyright reserved Please turn over ### Page 4 4 ACCOUNTING P1 (MARKING GUIDELINE) (EC/JUNE 2022) QUESTION 2 2.1 Calculate the following financial indicators for the financial year ended 30 April 2022: 2.1.1 Debt-equity ratio Workings Answer 1 080 000  : 10 776 400  0,1 : 1  One part correct 3 2.1.2 Earnings per share (EPS) Workings Answer 1 162 000  x 100 201,7 cents  576 000  accept 202 cents (144 000 ÷ 25c) One part correct 4 2.1.3 Dividend pay-out rate (%) Workings Answer (45+25) 70 cents  x 100 34,7%  201,7 cents  see 3.1.2 One part correct 3 2.1.4 % return on average shareholders’ equity (ROSHE) Workings Answer 1 162 000  x 100 ½  (10 776 400  + 8 893 800 ) 11,8%  19 670 200 two marks One part correct 9 835 100 three marks 5 Copyright reserved Please turn over ### Page 5 (EC/JUNE 2022) ACCOUNTING P1 (MARKING GUIDELINE) 5 2.2 Cash effects of changes in working capital operation (764 100)  ‘ CA–TOR-CCE CA–TOR-CCE Change in inventory 714 600  – 485 700  (228 900) * Change in receivables (448 000 + 28 400) 476 400 – 323 800  (152 600) * Change in payables 814 600 – 432 000 (382 600) * 9 *One part correct and must indicate correct operation and correct use of brackets; If no brackets, assume answer is an inflow of cash – award marks for workings only; If a working amount is shown as a final answer, award the mark, ignore the bracket; If the correct amount is provided without the brackets, and without workings, award all marks award all marks allocated for workings only. 2.3.1 Taxation paid WORKINGS ANSWER 1 660 000 – 1162 000 - 28 700  + 498 000  + 5 400  474 700  One part correct Accept alternative arrangements for calculations such as signs reversed, brackets and/or ledger accounts 5 2.3.2 Proceeds from sale of fixed assets WORKINGS ANSWER 11 434 000+ 280 800 – 1 632 000 – 9 984 400  98 400  One part correct Accept alternative arrangements for calculations such as signs reversed, brackets and/or ledger accounts 5 2.3.3 Funds used for the repurchase of shares WORKINGS ANSWER 25 000 x 1,1 25 000 x 1,1 OR 25 000 + 2 500 27 500  One part correct 2 Copyright reserved Please turn over ### Page 6 6 ACCOUNTING P1 (MARKING GUIDELINE) (EC/JUNE 2022) 2.4 NET CHANGE IN CASH AND CASH EQUIVALENTS (325 800) * operation Balance on 1 May 2021 67 800  Balance on 30 April 2022 (6 000 – 264 000) (258 000)  4 *One part correct TOTAL MARKS 40 Copyright reserved Please turn over ### Page 7 (EC/JUNE 2022) ACCOUNTING P1 (MARKING GUIDELINE) 7 QUESTION 3 3.1 3.1.1 B 3.1.2 C 3.1.3 A 3 3.2.1 The directors are satisfied with the improvement in the liquidity of the company. Quote and explain THREE financial indicators with figures and trends that show an improvement of the liquidity position. Financial indicators    Explanation (figures with trends)    • Current ratio decreased from 2.9 : 1 to 2.1 :1 • Acid test ratio increased from 1 : 1 to 1.4 : 1 • Stock turnover rate increased from 9.1 times to 10.2 times. 6 3.2.2 Explain why the shareholders should be satisfied with their return on investment in the company. Quote figures and trends in your explanation. Financial indicators  Figures and trend  Comparison with interest rate  % Return on shareholders improved from 10,4% to 15,3% / by 47,1%/ This is more than the interest rate on alternative investments (fixed deposits) of ±7% 4 3.2.3 One of the directors feels that the company should pay back the loan as soon as possible. Explain why you disagree with him. Quote TWO financial indicators with figures and trends. Two financial indicators (with figures)   • Debt/equity ratio was maintained at 0,3 : 1 • ROTCE is now 17,2% / increased from 12,1% to 17,2% / by 42,1% Explanation: both risk and gearing should be mentioned   part marks for partial / incomplete / unclear responses • The company is lowly geared • The company experiencing positive gearing (ROTCE is higher than interest rate of 14%) 6 Copyright reserved Please turn over ### Page 8 8 ACCOUNTING P1 (MARKING GUIDELINE) (EC/JUNE 2022) 3.2.4 One of the shareholders wants to sell her shares at R6 each. Provide ONE reason why you would agree with her to sell her shares. Quote a financial indicator with figures and trends. Financial indicators  Figures and trends  Any ONE response: • Market price has dropped from 640c to 600c / by 40 cents. • Market price of 600 cents is lower than NAV of 650 cent Provide ONE reason why you disagree with her to sell her shares. Quote a financial indicator with figures and trends. Financial indicators  Figures and trends  Any ONE response: • EPS increased from 75 cents to 104 cents per share / by 29 cents. • NAV increased from 625c to 650c / by 25 cents. • Return on shareholders’ equity increased from 10,4% to 15,3% / by 47,1% • Dividend pay-out-rate increased from 73,3% to 76,9% / by 4.9% 4 3.2.5 The shareholders should be happy with the earnings per share (EPS), because it is better than the previous year. Explain why you agree with them. Quote figures and calculations. Compare EPS to Value of share (MP / NAV) for 2022 with figures  part marks for partial / incomplete / unclear responses Compare EPS to Value of share (MP / NAV) for 2021 with figures  part marks for partial / incomplete / unclear responses Expected responses for 4 marks (two marks per financial year) • EPS to NAV is 16% in 2022 and 12% in 2021 / EPS to NAV is 25% more than 2021 (previous year). • EPS to MP is 17.3% in 2022 and 11,7% in 2021 • Earnings in 2022 is 104c on a share valued at 650c/600c while in 2021 it is 75c on a share value at 625c/640 4 Copyright reserved Please turn over ### Page 9 (EC/JUNE 2022) ACCOUNTING P1 (MARKING GUIDELINE) 9 3.3.1 Explain what effect this consideration will have on the % shareholding of Alton Flan in EACH company. Quote figures and trends. Explanation on % shareholding   Figures and trend   Socker Ltd: He will become the majority shareholder His shareholding will increase from 46% to % 51% Boll Ltd: His shareholding will drop from 55% to 50,9% / 51% He will remain the majority shareholder 6 3.3.2 Calculate the number of shares Alton Flan could buy in Boll Ltd. WORKINGS ANSWER 110 200 x 5 551 000 ÷ 4 137 750   One part correct 2 TOTAL MARKS 35 Copyright reserved Please turn over ### Page 10 10 ACCOUNTING P1 (MARKING GUIDELINE) (EC/JUNE 2022) QUESTION 4 4.1 Explain the role of the remunerations committee and give a reason why there is a need for this committee. EXPLANATION: ✓ Any ONE valid response • Review all salaries, bonuses and other earnings • Prevent directors from paying themselves too much / protect shareholder’s investment. • They must approve and give advice on the proposals regarding fees, bonuses etc. REASON: ✓✓ part mark for unclear/incomplete/partial responses Any ONE valid response • To ensure fairness / Transparency in the payment of fees / salaries • To prevent fraud / corruption / wastage • To detect mismanagement or fraudulent activities • To compare the remuneration / earnings against financial information of other companies in the industry / fairness to workers 3 4.2 Explain why the auditor referred to pages 7 to 22 in this report. Any ONE valid response ✓✓ part mark for unclear/incomplete/partial responses • Auditors are responsible only for reports presented on these pages of the annual report. • They are not accountable for the other information in the annual reports. • Financial statements on pages 7–22 were subjected to auditing. The audited financial reports / statements are found on these pages of the full report presented to the shareholders at the AGM. 2 4.3 Identify the type of audit report that the company received and give a reason for your answer. ONE valid response ✓✓ part marks for partial / incomplete / unclear responses To get full marks, Qualified report must be mentioned The company received a Qualified report because… • The financial statements were fairly presented except for an issue with the increase in directors’ fees OR • A specific item (increase in directors’ fees) could not be verified OR • There was no evidence / documents to verify the increase in directors’ fees OR • Proper procedures were not followed with regards to the increase in directors fees 2 Copyright reserved Please turn over ### Page 11 (EC/JUNE 2022) ACCOUNTING P1 (MARKING GUIDELINE) 11 4.4 Explain the effect of this type of report for the image of the company. Provide TWO points. TWO valid responses   part marks for partial / incomplete / unclear responses • There is a weakness in internal controls; possible negligence or colluding / fraud • This will impact on share price (demand) / returns earned / dividends earned by shareholders • Potential investors would not be interested to buy shares / existing shareholders may want to sell their shares • Directors appointed are not reliable – lose confidence/trust in them • Significant information is not being openly discussed (transparency) 4 4.5 State TWO possible consequences for the independent auditor if he had NOT referred to the increase in directors’ fees. TWO valid responses   part marks for partial / incomplete / unclear responses • He could face a disciplinary hearing by the professional body. • He may not be reappointed as an external auditor. • He may be charged/fined/lose his license to practice. 4 TOTAL MARKS 15 TOTAL: 150 Copyright reserved Please turn over ## Related documents - [ACCOUNTING P1 GR12 ANSWERBOOK JUNE 2022 English](https://www.hlayiso.com/library/accounting-p1-gr12-answerbook-june-2022-english/3f567dee-27d7-45f0-b356-dc5d1a094a3a) — Accounting · Addendum · 2022 · Eng - [ACCOUNTING P2 MEMO GR12 P2 JUNE 2022 English Final](https://www.hlayiso.com/library/accounting-p2-memo-gr12-p2-june-2022-english-final/edb5d545-b8d8-4365-b883-b3b3de78130f) — Accounting · Memo · 2022 · Eng - [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 - [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 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) — Accounting · Addendum · 2025 · Eng ## More from Grade 12 Accounting - [Accounting](https://www.hlayiso.com/library/accounting/8f42a6a4-9593-4d36-86b1-d890dd1bb1bf) — Guide - [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 - [Accounting Grade 12 NSC ANSWER BOOK P2 May June 2025 KZN](https://www.hlayiso.com/library/accounting-grade-12-nsc-answer-book-p2-may-june-2025-kzn/b9529d65-7fc3-420f-8a91-05ec30b0d61b) — Addendum · 2025 ## 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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