ACCOUNTING P2 MEMO GR12 JUNE2023_English_hlayiso.com_.pdf

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 JUNE 2023 ACCOUNTING P2 MARKING GUIDELINE 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). 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. In calculations, do not award marks for workings if numerator and denominator are swapped – this also applies to ratios. 8. Where penalties are applied, the marks for that section of the question cannot be a final negative. 9. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark. 10. Operation means ‘Check operation’. ‘One part correct’ means ‘Operation and one part correct’. 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 that some candidates provide valid alternatives beyond the marking guideline. 13. Codes: f = foreign item; p = placement/presentation. This marking guideline consists of 10 pages. Copyright reserved

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 2 QUESTION 1 1.1 CONCEPTS 1.1.1 D  1.1.2 A  1.1.3 E  1.1.4 C  4 1.2 BANK RECONCILIATION 1.2.1 Calculate the correct cash journal totals for April 2023. CRJ CPJ 91 230 101 050 200  5 000  7 500  1 425  5 400  2 100  104 330  for both totals 109 575 10 1.2.1 Calculate the Bank balance on 30 April 2023. 18 795  + 104 330  – 109 575  = 13 550  4 1.2.2 Bank reconciliation statement on 30 April 2023. Dr balance according to Bank statement 15 700  Balancing figure Credit late deposit 21 500  Debit outstanding EFT no. 440 2 250  Credit stop order error 10 000  Dr balance according to Bank account 13 550  31 500  31 500 7 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 3 1.3 CREDITORS’ RECONCILIATION 1.3.1 Explain why the balance in the Creditors’ Control account in the General ledger should correspond with the total of Creditors’ List extracted from the Creditors ledger. Provide ONE point. Any ONE  • The same information/documents are used to prepare both the Creditors’ Control account and the Creditors ledger. • Posting is done from the same set of journals. • It is an internal control measure to check for correctness of posting. • The Creditors’ Control account is a summary of all the Creditors ledger accounts. 2 1.3.2 Creditors control Creditors list Preliminary balance/total R111 340 R78 480 (i) + 960  (ii) - 32 800   (one (-16 400 – 16 400) mark each) (iii) + 3 920  + 3 920  (vi) - 900  (- 1 000 +100) (two or 0) Correct balance/total 82 460 * 82 460 8 * for both totals Opening balance/total have to be included QUESTION 1: TOTAL MARKS 35 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 4 QUESTION 2 2.1 CONCEPTS 2.1.1 True  2.1.2 False  2.1.3 False  2.1.4 True  4 2.2.1 Calculate the direct labour cost. Basic salary (14 x 10 500)  x 12  1 764 000  Overtime 3 100  x 80  248 000  UIF 1 764 000 x 1% 17 640  2 029 640  8 2.2.2 Calculate the factory overhead cost. Indirect material (19 800  + 57 600  – 22 650 ) 54 750  Salaries factory foreman 234 000  Rent expense (172 800 x 900/2 250) 69 120  Water and electricity (156 000 x 90%) 140 400  Insurance (107 100 + 4 200) x 3/7  47 700  Depreciation 415 830  961 800  15 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 5 2.2.3 Production Cost Statement for the year ended 28 February 2023. Direct material cost 3 150 000 Direct labour cost 2 029 640  Prime cost DLC + DMC 5 179 640  Factory overhead cost 961 800  Total manufacturing cost 6 141 440 * Work-in-progress (1 March 2022) 240 560 6 382 000  Work-in-progress (28 February 2023) (382 000) * Cost of production of finished goods 6 000 000 * (6 022 500 + 142 500 – 165 000) One part correct 8 *Check operation; -1 foreign items, max. 2 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 6 2.3 UNIT COST AND BREAK-EVEN 2.3.1 Calculate the break-even point for the year ended 31 May 2023. 1 104 000  28 – 16  12 two marks 92 000units  One part correct 4 2.3.2 Comment on whether Linda should be satisfied with the number of units produced and sold during the financial year. Quote figures. Any TWO comparisons   (with figures)  • In 2022 profit was made on 27 000 units and in 2023 profit were made on only 4 000. (four marks) / In 2022 the break-even was 90 000 and 117 000 were produced and sold / The business sold 27 000 units above break- even or made profit on 27 000 units. • In 2023 the break-even was 92 000 units (See 2.3.1) and 96 000 units were produced and sold / This means the business made a profit on only 4 000 units in 2023. 6 2.3.3 Give TWO possible reasons for the increase in direct material cost per unit for the current financial year. Any TWO   Price of material increased Better quality raw material was used Increase in transport cost/ fuel prices Increase in wastage/ untrained workers New suppliers charge higher prices 4 2.3.4 Provide ONE reason why Linda may be concerned about the increase in the total fixed costs during the current financial year. Any ONE point   This cost should be fairly constant / It is not influenced by the level of production (in fact production dropped) The increase should be in line with inflation (about 5%) 2 2.3.5 Linda considers reducing the content per packet keeping the selling price the same. Give TWO points of advice. Any TWO   It is unethical/fraud Could lead to legal action against the business Negative image of business if customers discover this Product might be removed from shelves 4 QUESTION 2: TOTAL MARKS 55 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 7 QUESTION 3 3.1 CONCEPTS 3.1.1 Perpetual system  3.1.2 FIFO  3.1.3 Weighted average method  3 3.2 INVENTORY VALUATION 3.2.1 Calculate the value of closing stock on 30 June 2023. (5 x 630) 416 290  + 2 913 000  – (5 640  + 3 150)  x 1 160 820  + 4 920  – 15  5 marks 3 320 500 x 1 160 5 725 3 marks 8 marks 580 x 1 160 = R672 800  Must be x 1 160 9 3.2.2 Calculate the average stock holding period (in days) for jackets. ½ (416 290  + 672 800 )(see 3.2.1) x 365 (3 320 500  – 672 800 )   = 544 545 x 365 Units: ½ (820 + 1 160) x 365 2 647 700 4 350 = 75,1 days  83,1 days 5 3.2.3 Calculate the number of units missing. (820 + 4 920 – 15)  – 4 350  – 1 160  = 215  4 Give TWO points of advice on how Neville can address this problem. Any TWO valid points  Security tags on jackets Restrict access to store room Regular stock count and check against records Install CCTV Order smaller quantities at a time / keep less jackets in stock 4 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 8 3.2.4 Explain the effect of a change to the FIFO method on the gross profit on jackets. Gross profit will increase.  2 Give ONE reason FOR changing the stock valuation method. Any ONE valid point  FIFO reflect stock at more realistic prices / Stock is valued at current prices. 2 Give ONE reason AGAINST changing the stock valuation method. Any ONE valid point  It is unethical to manipulate records. Over time the difference will be cancelled. Increased gross profit will lead to higher tax. It will be impossible to compare results to previous years. 2 3.2.5 Explain why sponsoring jackets for a school is a good idea. Give TWO reasons.   Any TWO valid points  It forms part of corporate social responsibility. It creates goodwill for the company. Good for the image of the company / good publicity. It is tax deductible. 4 QUESTION 3: TOTAL MARKS 35 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 9 QUESTION 4 4.1 FIXED ASSETS 4.1.1 Calculate the depreciation on equipment for the year ended 28 February 2023. Old Equipment: 480 000 x 20% = 96 000 → 39 999  (carry value of R1) New Equipment: 120 000 x 20% x 10/12 = 20 000  59 999  One part correct [(600 000 – 120 000) – 440 000] – 1 = 39 999 Calculate the depreciation on vehicles for the year ended 28 February 2023. Sold V: (164 250 – 56 250)  x 20% x 5/12  = 9 000  279 900 one mark 105 750 one mark Old V: (444 150 –164 250)  – (162 000– 56 250) x 20% = 34 830  New V: 315 000 x 20% x 6/12  = 31 500  75 330  One part correct 14 4.1.2 Provide ONE reason why a company might decide to dispose of fixed assets. Any ONE valid point  Assets too old Upkeep/maintenance too expensive Not effective for specific use anymore Better model available Better technology 2 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ACCOUNTING P2 10 4.2 MANAGING FIXED ASSETS PROBLEM (WITH FIGURES) ADVICE ONE mark problem  ONE mark advice  ONE mark figure  VEHICLE 1 Under-used Assign more trips to this Only 360 km covered / only 24 vehicle / ensure that a log is trips kept / set targets per driver. Gets paid too much. R11 000 Give this vehicle to another for little work done. driver (switch with driver no 3) VEHICLE 2 Highest paid driver, R13 750, Provide driver with workload not justified by doing more schedule / introduce work / under-utilised 780 km of commission on work done possible 1 200 km / does many short trips VEHICLE 3 Old vehicle / fully depreciated Replace this vehicle / look at R1 carrying value / high possible trade-in or disposal / maintenance R285 per month / use vehicle for very short high fuel cost R2 150 trips / switch with driver no. 1 9 QUESTION 4: TOTAL MARKS 25 TOTAL: 150 Copyright reserved Please turn over