Accounting Grade 12 IEB Paper 1 2018 Memo

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE EXAMINATION NOVEMBER 2018 ACCOUNTING: PAPER I MARKING GUIDELINES Time: 2 hours 200 marks These marking guidelines are prepared for use by examiners and sub-examiners, all of whom are required to attend a standardisation meeting to ensure that the guidelines are consistently interpreted and applied in the marking of candidates' scripts. The IEB will not enter into any discussions or correspondence about any marking guidelines. It is acknowledged that there may be different views about some matters of emphasis or detail in the guidelines. It is also recognised that, without the benefit of attendance at a standardisation meeting, there may be different interpretations of the application of the marking guidelines. IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 2 of 11 QUESTION 1 MANUFACTURING Refer to the Information Booklet for information relating to Hammond Huts. 1.1 Complete the Tangible Asset Note as it would have appeared in the Statement of Financial Position as at 30 June 2018. You may use the calculation blocks below to show your workings, but write your final answer in the Note next to the question marks (?). Vehicle depreciation calculations New Total 300 000 × 15% × 3/12 = 11 250 1 400 000 × 15% = 210 000 + 11 250 = (221 250) Machinery depreciation calculations Depreciation of old machinery sold Depreciation of machinery not sold (700 000 – (270 000 – (120 000 – 18 000 – 15 300) 33 300)) × 15% = 69 495 86 700 × 4/12 × 15% = 4 335 Accumulated depreciation at end of Total depreciation for year year 69 495 + 4 335 = 73 830 270 000 + 73 830 – 37 635 = 306 195 Disposal of machinery Disposal 120 000 – (18 000 + 15 300 + 4 335) = 82 365 IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 3 of 11 Vehicles Machinery Carrying value on 1 July 2017 ?980 000 550 000 Cost 1 400 000 ?820 000 Accumulated depreciation ?(420 000) (270 000) MOVEMENTS Additions ?300 000 – Disposals (120 000 – 18 000 – 15 300 – – (82 365) 4 335) Depreciation (221 250) (73 830) Carrying value on 30 June 2018 1 058 750 ?393 805 Cost 1 700 000 ?700 000 Accumulated depreciation (641 250) ?(306 195) 1.2 Complete the Direct Labour Note as it would have appeared on 30 June 2018: 90 000 × 2 180 000 Wages (7 500 × 12 × 2) 42 800 2/5 17 120 Bonus (25 680 × 5/3 × 2/5 (5/3 + 2/5 = 2/3) Medical Aid Contributions (38 400 × 60% × 2) 46 080 UIF Contribution (180 000 × 1%) 1 800 245 000 1.3 Complete the Factory Overheads Note as it would have appeared on 30 June 2018: Indirect materials (14 500 + 20 700 – 8 000 17 200) × 4/9 Depreciation on machinery *73 830 Insurance (4 680 × 3/12) 1 170 83 000 IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 4 of 11 1.4 Calculate the cost of finished goods produced during the year ended 30 June 2018: Opening stock of finished goods 54 000 Cost of finished goods produced during the year 482 000 (from PCS) Closing stock of finished goods (32 000) Cost of finished goods sold/cost of sales 504 000 1.5 Complete the Production Cost Statement for the year ended 30 June 2018: Direct/Prime costs (860 × 400) 344 000 Direct materials (344 000 – 245 000) 99 000 Direct labour see 1.2 245 000 Factory overhead costs see 1.3 83 000 Total manufacturing costs 427 000 Work in progress (1 July 2017) 220 000 647 000 Work in progress (30 June 2018) (165 000) balancing amt. must be in brackets Cost of production of finished goods see 1.4 482 000 IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 5 of 11 QUESTION 2 FINANCIAL STATEMENTS Refer to the Information Booklet for information relating to NDIV Limited. All workings need to be shown as part marks will be allocated to them. You may use the calculation blocks on the next page to show your workings, but your final answer must be written in the Statement of Comprehensive Income. The number of lines does not represent the number of entries required. 2.1 Complete the Statement of Comprehensive Income (Income Statement) for the year ending 28 February 2018. NDIV Limited Statement of Comprehensive Income for the year ending 28 February 2018 Net sales (3 321 000 – 21 000) 3 300 000 Cost of sales (2 214 000 – 14 000)or 10 500 (2 200 000) Gross profit 1 100 000 Other operating incomes DO NOT CALCULATE • Rent income (146 944 – 12 544) 134 400 • Discount received (3 300 – 700) 2 600 • Provision for bad debts adjusted or decreased in 175 provision (4 100 – 3 925) Gross operating income DO NOT CALCULATE Operating expenses DO NOT CALCULATE • Directors' fees 56 000 • Audit fees (30 000 +21 000) 51 000 • Consumable stores (14 600 – 4 500) 10 100 • Bad debts (1 500 + 6 500) 8 000 • Depreciation 19 255 Trading stock deficit 21 300 • Loss on sale of vehicle 3 479 • Stock loss (25 000 × 40%) 10 000 Operating profit before interest DO NOT CALCULATE Interest income 0 Profit before interest expense DO NOT CALCULATE Interest expense (30 000 + 4 375) (34 375) Profit before taxation DO NOT CALCULATE • Taxation for the year (302 000) Net profit after taxation DO NOT CALCULATE IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 6 of 11 Calculations Trading stock deficit Interest expense (185 000 + 14 000 – 25 000 – 370 000 × 3/12 × 10% 152 700)= 21 300 = 9 250 335 000 × 9/12 × 10% = 25 125 = (34 375) Rent income Profit/loss on sale of asset 12 × 100 = 1 200 1 × 112 = 112 114 000 – 44 521 – 66 000 loss = 1 312 112 146 944 × = 12 544 1 312 2.2 Complete the following Notes to the Financial Statements as it would have appeared on 28 February 2018. All workings must be shown to be awarded part marks. TRADE AND OTHER RECEIVABLES AMOUNT Net trade debtors DO NOT CALCULATE Trade debtors (85 000 – 6 500)+66 000 car 78 500 or 93 500 Provision for bad debts (78 500 × 5%) (3 925) or 4 100 – 175 Accrued income (15 000 or debtors for 15 000 insurance) SARS (income tax) (310 000 – 302 000 or + in 8 000 trade and other payables) DO NOT CALCULATE TRADE AND OTHER PAYABLES AMOUNT Trade creditors (99 000 + 3 200) 102 200 Income received in advance(146 944 – 34 400) 12 544 Accrued expenses (21 000 + 4 375 25 375 Shareholders for dividends(125 000 × 58 c) 72 500 Short-term portion of loan 35 000 DO NOT CALCULATE IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 7 of 11 2.3 Both audit fees and director fees are listed as expenses in the Statement of Comprehensive Income. What is the difference between the role of an auditor and the role of a director? 0 1 2 Learner does not know Learner has described Learners can clearly the role of an auditor or the role of either an describe the difference director. auditor or a director. between an auditor and a director. Director: manages operations of a company. Draws up and presents financial statements. Auditor: checks financial statements. Reports on fair representation of financial statements. 2.4 2.4.1 What was the interim dividend per share? 123 – 58 = 65 cents per share 2.4.2 Give one reason why you think the final dividend was so much less than the interim dividend. Profits were lower than expected or maybe historically they paid 58 cents and 65 cents per share for final and interim dividends. IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 8 of 11 QUESTION 3 CASH FLOW STATEMENT Refer to the Information Booklet for information relating to Stubar Ltd. 3.1 Complete the Reconciliation Note between profit before taxation and cash generated from operations for the year of the Cash Flow Statement for the year ended 30 September 2018. You may use the calculation blocks below the Reconciliation Note to do your workings, but your final answer must be written in the Reconciliation Note. 1. Reconciliation between profit before taxation and cash generated from operations • Profit before tax (648 000 × 100/72) 900 000 Adjustments in respect of: • Depreciation 24 008 Interest expense (4 166 – 2 000) × 12 25 992 Operating profit before changes in working capital 950 000 Changes in working capital: (16 727) adding • Decrease in inventory (345 000 – 310 000) 35 000 • Increase in trade and other receivables (70 120) • Increase in trade and other payables 18 393 Cash generated from operations 933 273 Calculations Calculate trade and other Calculate trade and other receivables payables (117 500 + 6 280) – (45 000 + (107 000 + 4 840 + 3 333) – (91 5 520 + 3 140)= 70120 000 + 3 225 + 2 555) = 18 393 3.2 Calculate the following amounts. 3.2.1 Dividends paid Workings (120 000 + 30 000) × 7c = 10 500 interim 120 000 + 30 000 – 20 000 × 12c = 15 600 final – 6 000 – 26 100 +15 600 Amount paid: 16 500 IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 9 of 11 3.2.2 Tax paid Workings [252 000 – 146 792 – (900 000 – 648 000)] – 23 584 Amount paid: 422 376 3.3 Complete the Cash Flows from Financing Activities Section of the Cash Flow Statement for the year ended 30 September 2018. CASH FLOWS FROM FINANCING ACTIVITIES Repayment of loan (2 000 × 12) (24 000) Proceeds from loan (500 000 + 24 000 – 234 000) 290 000 Proceeds from issue of shares 174 000 Repurchase of shares 20 000 × R7,50 (150 000) IEB Copyright © 2018 PLEASE TURN OVER

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 10 of 11 QUESTION 4 VAT AND INVENTORY Refer to the Information Booklet for information relating to Shick Chicken. 4.1 Calculate the rand value of the closing stock on 30 November 2018. 320 + 1 050 – 1 150 = 220 kgs the two quantities must add up to 220 The two prices must be R85 and R82 110 × 85 = R9 350 or 112 × 85 = 9 520 110 × 82 = R9 020 or 108 × 82 = 8 856 R9 350 + R9 020 =R18 370 Or 9 520 + 8 856 = R18 430 4.2 Calculate the cost of sales for the financial year. Opening stock 20 480 Purchases 27 360 + 31 200 +13 120 + 11 050 Or 164 drawings 81 030 – 170 drawings – 1 530 (18 × R85) returns Less closing stock (18 370) Cost of sales 83 140 4.3 Calculate the mark-up achieved by Shick Chicken for the financial year. Sales: 1 150 × 99 = 113 850 Cost of Sales: 83 140 113 850 – 83 140 / 83 140 = 30 710 / 83 140 = 36,94% 4.4 Considering the type of product they buy and sell, which two stock control measures are absolutely essential in order to avoid possible legal action being taken against them? • Must relate to frozen chickens • Discuss issues related to refrigeration • Policy of no returns on frozen chickens • The chicken must be kept frozen both in the business and in the transport process. • The "sell by" date must be indicated on all stock. • Labelling with correct ingredients or Halaal • Have backup generator in case of power failure • No tampering with weight • Do sample testing on quality. Must adhere to health and safety requirements IEB Copyright © 2018

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE: ACCOUNTING: PAPER I – MARKING GUIDELINES Page 11 of 11 4.5 Use only Information C to calculate VAT. Then circle if this is to be paid to SARS or received from SARS. (Some amounts might include cents.) Calculations Check grouping Opening sales purchases returns drawings Dis rec Bad debts – 3 100 + 2 079 – 1 547 + 214,20 + 23,80 + 448 – 140 = – 2 022 Afrikaans scripts can have + 488 or – 488 2 022 owed by SARS depending on answer 2 918 for Afrikaans Total: 200 marks IEB Copyright © 2018 PLEASE TURN OVER