# Accounting Grade 12 P1 Eastern Cape Mock 2021 Memo (English) > Grade 12 Accounting Paper 1 memorandum from the Eastern Cape Mock Exam 2021 (English), 9 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/accounting-p1-gr12-memo-sept-2021-english/a2867f68-4d02-4891-b830-f1f83be42ef2 - Updated: 2026-09-27 - Subject: Accounting - Grade: Grade 12 - Language: English - Document type: Memorandum - Year: 2021 - Exam period: Eastern Cape Mock Exam - Paper: 1 - Curriculum: CAPS - Pages: 9 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 Mock 2021 Memo (English)](https://www.hlayiso.com/library/accounting-p1-gr12-memo-sept-2021-english/a2867f68-4d02-4891-b830-f1f83be42ef2) ## About this document Accounting · Grade 12 · Eastern Cape Mock Exam · 2021 · English. Memorandum, 9 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Matching paper and memo - [ACCOUNTING P1 GR12 QP SEPT 2021 English D REV](https://www.hlayiso.com/library/accounting-p1-gr12-qp-sept-2021-english-d-rev/bd359bc3-aaa6-4466-a680-12cf6f56610f) — QP · 2021 · Eng ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 SEPTEMBER 2021 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 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 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 & 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 9 pages. ### Page 2 Downloaded from hlayiso.com 2 ACCOUNTING P1 (MARKING GUIDELINE) (EC/SEPTEMBER 2021) QUESTION 1 1.1 1.1.1 Remuneration committee  1.1.2 Non-executive directors  1.1.3 Executive directors  3 1.2 AUDIT REPORT 1.2.1 Identify the type of report and explain why this this type of report was issued by the auditor. ONE valid comment  part marks for incomplete / unclear answers complete answer must mention Qualified Report The company received a Qualified report because • The financial statements were fairly presented except for one issue regarding the donation of R1,2 m OR • A specific item (donation) could not be verified OR • There was no evidence / documents to verify the donations of R1,2 m OR • Proper procedures were not followed with regards to the donation 2 1.2.2 Explain TWO points why shareholders will be concerned about the company receiving such a report. TWO valid points   part marks for partial / incomplete / unclear responses • There is a weakness in internal controls – possible mismanagement / fraud • This will impact on the image of the business, and on share price (demand) / on share price / 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 by them are not reliable – lose confidence in them • Significant information is not being openly discussed (transparency) • No proof that the donations reached the intended schools / fraud 4 1.2.3 The CEO requested that the auditor classifies this donation as a “sundry expense” and adjust the audit opinion accordingly. Provide TWO reasons why the auditor would not agree with this suggestion. TWO reasons   part marks for partial / incomplete / unclear responses • He belongs to a professional body and is bound by a code of conduct • This request is unethical / fraudulent behaviour / misleading shareholders • He does not have an interest in the company, should be unbiased • He is concerned about his own reputation and prospects for future assignments; • The auditor has to be independent to issue a reliable opinion / not be influenced by directors (who are responsible to drawing up statements) • There should be an investigation into possible criminal activity / should not be any cover-up / culprits must face legal consequences. 4 Copyright reserved Please turn over ### Page 3 Downloaded from hlayiso.com (EC/SEPTEMBER 2021) ACCOUNTING P1 (MARKING GUIDELINE) 3 1.2.4 Apart from the issues mentioned above, explain why the company would be accused of poor corporate governance. ONE valid point  part marks for partial / incomplete / unclear responses • The CEO should place the interest of the company and the shareholders’ first • He must exercise ethical behaviour in dealing with company matters; • He should take responsibility for duties assigned to him and account for his actions; not be devious and try to cover up (transparency) • He should encourage the participation of all role players in decision-making 2 TOTAL 15 Copyright reserved Please turn over ### Page 4 Downloaded from hlayiso.com 4 ACCOUNTING P1 (MARKING GUIDELINE) (EC/SEPTEMBER 2021) QUESTION 2 2.1 Statement of Comprehensive Income on 28 February 2021 Sales 5 808 000  – 28 800  5 779 200 * Cost of sales Sales x 100/160 (3 612 000)  Gross profit S – COS 2 167 200  6 Other income operation 132 800  Discount received 14 000 Rent income 139 500 – 20 700  118 800 * Gross income GP + OI 2 300 000  6 Operating expenses GI – OP (1 197 000)  Depreciation 86 010 Insurance 37 200  – 1 200  36 000  Loss due to theft 30 x 175 5 250  Directors fees 450 400  + 11 600  462 000 * Salaries and wages 492 000 + 12 400 + 1 240  506 240 * Audit fees 80 500  Sundry expenses balancing figure 21 000  Operating profit PbIE – IInc 1 103 000  18 Interest income 23 400 Profit before interest expense NPbT + IE 1 126 400  Interest expense 1 082 400 – 955 000 (127 400) * Net profit before income tax NPaT + IT 999 000  Income tax 689 310 x 31/69 (309 690)  Net profit after tax 6 689 310 36 – 1 foreign items (max -2) * one part correct Copyright reserved Please turn over ### Page 5 Downloaded from hlayiso.com (EC/SEPTEMBER 2021) ACCOUNTING P1 (MARKING GUIDELINE) 5 2.2 RETAINED INCOME Balance on 1 March 2020 204 040 + 105 000 309 040 * Net profit after tax 689 310 Shares repurchased 75 000 x 1,40 (105 000)  Ordinary share dividends (297 350) Interim dividends 126 000 Final dividends 745 000 x 23 cents 171 350  Balance on 28 February 2021 subtract SBB and OSD 596 000  7 * one part correct 2.3 EQUITIES AND LIABILITIES SECTION SHAREHOLDERS EQUITY 8,60 x 745 000 6 407 000  Ordinary share capital balancing figure 5 811 000  4 Retained income see 2.2 596 000  Non-current liabilities 974 160 2 Loan: Luther Bank 1 082 400 – 108 240 974 160 * Current liabilities operation 697 840  Trade and other payables 404 060 * 368 470 + 10 350  + 11 600  + 12 400  + 1 240  Shareholders for dividends see 2.2 171 350  SARS: Income tax 309 690 – 295 500 14 190 * Current portion of loan see NCL 108 240  11 TOTAL EQUITY AND LIABILITIES 8 079 000  17 * one part correct TOTAL 60 Copyright reserved Please turn over ### Page 6 Downloaded from hlayiso.com 6 ACCOUNTING P1 (MARKING GUIDELINE) (EC/SEPTEMBER 2021) QUESTION 3 3.1 Calculate the following for the Cash Flow Statement on 31 August 2021: 3.1.1 Change in payables (indicate inflow or outflow of cash) WORKINGS ANSWER (390 800 + 6 200) 181 400  397 000  – 215 600  Inflow  4 3.1.2 Income tax paid WORKINGS ANSWER – 29 300 + 428 800 – 33 100 366 400     one part correct Accept alternative presentation for calculations 4 3.1.3 Dividends paid WORKINGS ANSWER 2 000 000 x 12 cents (528 000 – 240 000) 496 000  208 000  + 288 000  one part correct Accept alternative presentation for calculations 4 3.1.4 Proceeds from shares issued WORKINGS ANSWER 6 840 000/1 900 000 (100 000 x 3,60) 6 840 000  + 360 000  – 5 440 000  1 760 000  one part correct Accept alternative presentation for calculations 5 3.1.5 Funds used to repurchase shares WORKINGS ANSWER 140 000  + 360 000  500 000  one part correct OR 100 000 x R5 (1,40 + 3,60) 3 3.1.6 Increase in loan WORKINGS ANSWER 99 360 x 100/12 828 000  – 600 000  228 000  one part correct 4 Copyright reserved Please turn over ### Page 7 Downloaded from hlayiso.com (EC/SEPTEMBER 2021) ACCOUNTING P1 (MARKING GUIDELINE) 7 3.2 NET CHANGE IN CASH AND CASH EQUIVALENTS 267 800  Cash and cash equivalents (opening balance) (99 800)  – 109 800 + 10 000 Cash and cash equivalents (closing balance) 168 000  4 3.3 3.3.1 Calculate: Acid-test ratio WORKINGS ANSWER (278 000 + 168 000) 446 000  : 670 100  0,7 : 1  one part correct Accept 0,67 : 1 3 3.3.2 Calculate: % return on average shareholders’ equity WORKINGS ANSWER 911 200  x 100 14,1%  ½  (5 650 000  + 7 293 200 ) one part correct 6 471 600 two marks 5 3.3.3 Calculate: Dividend pay-out rate (%) WORKINGS ANSWER 12c + 18c 30 cents  x 100 53 cents  Or 56,7%  one part correct 528 000 / 911 200 x 100 = 57,9% 4 TOTAL 40 Copyright reserved Please turn over ### Page 8 Downloaded from hlayiso.com 8 ACCOUNTING P1 (MARKING GUIDELINE) (EC/SEPTEMBER 2021) QUESTION 4 4.1 4.1.1 Limited  4.1.2 Materiality  4.1.3 Market price  3 4.2.1 Identify the company that has the most efficient liquidity position. Quote and explain THREE financial indicators to support your choice. COMPANY: BCM Ltd  Financial indicators (with figures)    Explanation  Current ratio is 1,8 : 1 Acid test ratio is 1,1 : 1 Average debtors’ collection period is 27 days The business has enough liquid assets to meet current debt obligations Collection from debtor is also efficient (within the credit terms) Do not appear to carry a lot of stock; no idle stock; stock is being sold regularly 6 4.2.2 A director of Green Ltd feels that the company should pay back the loan as soon as possible. Explain what you would say to him. Quote TWO financial indicators (with figures) to motivate your opinion. Financial indicators (with figures)   Explanation  comparison with interest rate  Debt/equity ratio is 0,6: 1 – business tends towards high gearing / making extensive use of loans (borrowed capital) ROTCE is 14,7% - indication that CE is use productively to generate a good profit/ business is positively geared – interest on loan is 13% There is no urgency to repay the loan. 6 4.2.3 Comment on the dividend pay-out rates of Green Ltd and Plaza Ltd, and provide a reason for the directors of each company deciding on those pay-out rates. Quote figures. Financial indicators (with figures)   Explanation for Green Ltd  Explanation for Plaza Ltd  Green Ltd paid out 51,6% of the EPS to shareholders and retained 48,4% This business is focusing on growth and long term sustainability. Plaza Ltd.’s dividend pay-out rate is 103% which means they used part of retained income to pay dividends (above the EPS). This may be considered to be a poor decision as the company is not doing well (looking at the returns) and they do not have plans for growth; they appear to be appeasing the shareholders by giving them high dividends. 6 Copyright reserved Please turn over ### Page 9 Downloaded from hlayiso.com (EC/SEPTEMBER 2021) ACCOUNTING P1 (MARKING GUIDELINE) 9 4.2.4 Shareholding of Sandi Charley: Sandi Charley is a shareholder in two of these companies. She has R800 000 and intends to invest in new shares. All three companies have decided to issue additional shares on 1 March 2021, at the existing market price on 28 February 2021. Calculate Sandi’s % shareholding in Green Ltd and comment on your findings. 900 000 / 1 700 000 = 52,9%  COMMENT:  Sandi owns more than 50% of the shares; has a controlling interest; is the majority shareholder / decision maker 4 Calculate the minimum number of shares she should buy in Green Ltd and the amount she would have to spend. (1 700 000 + 250 000) 1 950 000 / 2 975 000  – 900 000  = 75 000 + 1 (or + 100)  one part correct 75 001 x 5,20  = R390 005,20  or 75 100 x 5,20 = R390 520 one part correct 6 What advice would you offer Sandi regarding her intentions to purchase shares in Plaza Ltd? Provide TWO points. Quote figures (financial indicators) to support your advice. TWO valid points   • A lower market price (532) than the NAV (566) suggest that there is a drop in demand for shares in this company • The dividends may be high (dividend pay-out rate of 103% / 66 cents) but this is at the expense of the company concentrating on future profitability • The business is also very highly geared (debt equity 0,7 : 1), which is not being effectively used (negatively geared) • The ROSHE at 5,3% is lower than safer investments such as fixed deposits • The business do not have enough liquid assets to meet the current debt obligation (acid test ratio 0.4 : 1 ) 4 TOTAL 35 Copyright reserved Please turn over ## Related documents - [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 - [ACCOUNTING P2 GR12 MEMO SEPT 2020 English](https://www.hlayiso.com/library/accounting-p2-gr12-memo-sept-2020-english/b6d54b19-200a-4cbf-aaad-8df18fd74e19) — Accounting · Memo · 2020 · Eng - [ACCOUNTING GR12 MEMO SEPT2018 English](https://www.hlayiso.com/library/accounting-gr12-memo-sept2018-english/5bfe8f07-1121-4aad-8146-327c580e81de) — Accounting · Memo · 2018 · 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 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 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. When citing, link the page URL above, not a PDF or /api/ URL.