Accounting Grade 11 P2 Gauteng November 2021 Memo (English)

Downloaded from hlayiso.com PROVINCIAL EXAMINATION NOVEMBER 2021 GRADE 11 ACCOUNTING (PAPER 2) MARKING GUIDELINES 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 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 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. Where penalties are applied, the marks for that section of the question cannot be a final negative. 8. ‘Operation’ means check operation. ‘One part correct’ means operation and one part correct. Note: ‘check operation’ must be +, -, x, - as per memo. 9. ‘One part correct’ means operation and one part correct. Where method marks are awarded for one part correct, the marker must inspect the reasonableness of the answer and at least one part must be correct before awarding the mark. If a figure has earned a method-mark, this will be regarded as ‘one part correct’. 10. In calculations, do not award marks for workings if the 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 . 12. Be aware of candidates who provide valid alternatives beyond the marking guideline. Codes: f = foreign item; p = placement/presentation. 10 pages

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 QUESTION 1: RECONCILIATIONS (40 marks; 32 minutes) 1.1 BANK RECONCILIATION 1.1.1 General Ledger of Sahara Traders Bank B 10 Date Details Amount Date Details Amount 2021 Debtors’ Control/ 2021 30 √ 1 000 30 Balance √ 9 228 Nov T. Rhino √ Nov Balance 11 068 31 Sales √2 190 – 2 910 = - 720 √√ 720 Drawings √ √ 1 440 Bank charges √ √ 80 Interest on overdraft √ √ 60 Trading stock √ √√ 5 820 – 5 280 = 540 540 12 068 12 068 2021 01 Balance √ 11 068 Dec 16 1.1.2 Bank Reconciliation Statement of Sahara Traders on 30 November 2021. Debit Credit Dr balance as per Bank statement √16 768 Cr outstanding deposit √ 6 000 Dr outstanding EFT 333 √ 6 500 Dr amount wrongly credited √√ 100 Cr amount wrongly debited √√ 6 300 Cr balance as per bank account √ 11 068 23 368 23 368 8 2

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 1.1.3 Briefly explain the purpose of doing a bank reconciliation statement. (2) It is an internal control measure to ensure that all entries are correctly captured by the business and by the bank. √ √ It prevents fraud, omissions and errors. To identify any outstanding deposits and outstanding EFTS. (Any other relevant, correct answer.) 1.1.4 List TWO internal control measures a business can implement to control cash in a business. (2) Division of duties √ Deposit all monies received daily √ Register for SMS’s to be sent by bank for any movement in the bank account (Any other relevant, correct answer.) 4 1.2 CREDITORS’ RECONCILIATION 1.2.1 Green Apple Co. Creditor’s Reconciliation on 31 May 2021 Statement of Account from Creditors’ Ledger of Fresh Green Apple Co. Fruit Mart Incorrect balance 14 530 13 789 a. √ 450 b. √ (90) c. √ 700 √ 700 or √√1 400 d. √ 251 e. √ 3 400 √ (1 950) Correct balance 15 890 15 890 totals must be the same 8 3

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 1.2.2 a. What action should be taken by the management against this employee? Provide TWO points. (2) • Deduct the money from his salary./Recover money through legal action. • Call him to a disciplinary hearing. • A case should be opened at the SAPS. • Suspend the employee pending the outcome of the case. Any TWO points √√ b. Provide TWO internal control measures that should be applied to prevent this from happening again. (2) • Division of duties. • Senior personnel to authorise purchases. • When goods are received, the receiving officer should check the stock delivered against the invoice and order form. • Do internal audit or checks to detect errors or fraud. • Monthly reconciliation of creditors. Any TWO points √√ 4 40 4

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 QUESTION 2: COST ACCOUNTING (40 marks; 32 minutes) 2.1 PURPLE GIRLS FACE MASK MANUFACTURERS 2.1.1 Calculate the raw materials issued for production in 2021. (6) 53 000√ – 25 000√ + 720 000√ + 15 400√ – 5 000√ = 758 400 6 2.1.2 GENERAL LEDGER OF PURPLE GIRLS FACE MASK MANUFACTURERS a. DR FACTORY OVERHEADS COST N2 CR Rent expense 18 680 √√ Sept 30 Work-in-process stock 281 940 Sept 30 (46 700 x 400/1000) or 2/5 Factory maintenance 68 400 √ Water and electricity 31 360 √√ (78 400 x 400/1000) or 2/5 Indirect materials (5 200√ – 5 500√ + 48 700 49 000√) Sundry expenses 6 150 √√ 12 300 x 3/6 Depreciation 22 800 √ Factory foreman 85 850 √ 281 940 281 940 14 5

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 b. WORK-IN-PROCESS STOCK B6 2020 2021 1 849 990 01 Balance 38 000 Oct Sept 30 Finished goods√ Balancing figure Raw materials cost √ 758 400 76 000 See 2.1.1 Balance Direct labour cost √ 847 650√ Factory overheads cost √ 281 940 See 2.1.3 a 1 925 990 1 925 990 2021 Balance 76 000 √ Oct 01 9 2.2 HANDSAN MANUFACTURERS 2.2.1 Calculate the break-even point for the financial year ended 28 February 2021. (5) Total Fixed cost Selling price – variable cost = 50 √ x 24 960 √ 184 √ – 132 √ = 1 248 000 52 = 24 000 units 2.2.2 Comment on whether the business should be happy with the break- even point. Quote relevant figures in your comment. (4) Yes/No √ Comment √√ figures √ Yes – Business is producing 960 units more than the break-even point. No – Business is only producing 960 units more than the break-even point, the business is barely making a profit. 6

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 2.2.3 The direct material costs have been well controlled. List ONE possible reason for the reduction in the direct material costs in 2021. (2) Price of material dropped √√ Less wastage of materials (Any relevant answer.) 11 40 QUESTION 3: VAT AND INVENTORY SYSTEMS (30 marks; 24 minutes) 3.1 VAT 3.1.1 Calculate the amounts marked A – E on the table given below (5) ANSWER A R368 000 B R48 000 C R2 645 D R5 480 E R6 302 3.1.2 Explain the difference between Tax Avoidance and Tax Evasion. (4) Tax avoidance is when a taxpayer arranges his affairs in a legal manner to reduce his tax payable. √√ Tax evasion is illegal activities where a taxpayer frees himself from a tax burden. √√ 3.1.3 Give TWO examples of zero-rated items and TWO examples of VAT exempt items. (4) ZERO-RATED ITEMS: Brown bread, rice, milk, eggs (ANY TWO) √√ EXEMPT ITEMS: School fees, insurance, financial services (ANY TWO) √√ 13 7

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 3.2 INVENTORY SYSTEMS 3.2.1 Calculate the purchase figure that will be closed off to the Trading Account. (5) 250 000 √ – 2 500 √ – 11 250 √ + 3 250 √ = 239 500 3.2.2 Calculate the sales figure that will be closed off to the Trading Account. (4) 295 000 √ – 15 700 √ – 12 000 √ = 267 300 3.2.3 Calculate the Cost of Sales. (4) See 3.1.2 65 200 + 239 500 + 12 560 √ – 96 250 √= 221 010 3.2.4 Calculate the average rate of stock turnover for 2020. (4) 221 010 See 3.2.3 (65 200 + 96 250) / 2√ = 221 010 80 725 √ = 2,7 times per year 17 30 8

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 QUESTION 4: Cash Budgets and Projected Income Statement (40 marks; 32 minutes) 4.1 CONCEPTS ANSWER 4.1.1 False √ 4.1.2 True √ 4.1.3 False √ 4.1.4 False √ 4.1.5 True √ 5 4.2 CASH BUDGET 4.2.1 DEBTORS’ COLLECTION SCHEDULE FOR JUNE AND JULY 2021. Credit sales June July April (90 000 x 75%) 67 500 √ 15 525 √ May (82 000 x 75%) 61 500 √ 18 450 √ 14 145 √ √ June (100 000 x 75%) 75 000 √ 28 800 22 500 √ √ √ July (110 000 x 75%) 82 500 √ 31 680 √ Debtors’ collections 62 775 68 325 14 9

Downloaded from hlayiso.com ACCOUNTING MEMORANDUM PAPER 2 GRADE 11 4.2.2 CASH BUDGET FOR JUNE AND JULY 2021. June July RECEIPTS Cash Sales 25 000 27 500 See 4.2.1 above See 4.2.1 above Collection from Debtors 62 775 68 325 √ Rent income 17 000 19 040 √ Loan RAV Bank 201 600 Sale of Fixed asset 132 900 √ Total receipts 104 775 449 365 PAYMENTS Cash Purchases 97 500 √ 127 500 √ Payment to creditors 80 000 65 000 √ Drawings 7 500 7 500 √ Loan instalment 5 600 Interest on loan (201 600√ x 11.5% 1 932 √ x1/12√) Advertising 820 √ 1 000 √ Salaries 75 000 78 000 √ Total payments 260 820 286 532 Cash surplus (shortfall) (156 045) 162 833 Bank: Opening balance 140 530 15 515 Bank: Closing balance 15 515 178 348 21 40 TOTAL: 150 10