Accounting Grade 12 Paper 2 NSC June 2024 Memo (English)

SENIOR CERTIFICATE EXAMINATIONS/ NATIONAL SENIOR CERTIFICATE EXAMINATIONS ACCOUNTING P2 MAY/JUNE 2024 MARKING GUIDELINES MARKING PRINCIPLES: MARKS: 150 1. Unless otherwise stated 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. Unless otherwise stated, give full marks for a correct answer. If answer is incorrect, mark workings. 4. If a pre-adjustment figure is shown as a final figure, allocate the part-mark as a working mark for that figure (not the method mark for the answer). Note: if figures are stipulated in the 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 from candidates. 7. If candidates provide more than the required number of responses, inspect all responses to give benefit to the candidate. Penalties may be applied for foreign entries if candidates earn full marks on a question (max -2 per Q). 8. These marking guidelines are not for public distribution as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions. 9. Where penalties are applied, the marks for that section of the question cannot be a final negative. 10. Where method marks are awarded for an operation, the marker must inspect reasonableness of the answer. 11. 'Operation' means check operation. 'One part correct' means operation and one part correct. Note: check operation must be +, -, x, ÷ as per candidate's calculation (if valid) or per marking guidelines. 12. In calculations, do not award marks for workings if numerator & denominator are swapped – this also applies to ratios. 13. 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 . 14. Be aware of candidates who provide valid alternatives beyond the marking guidelines. Note that one comment could contain different aspects. 15. Codes: f = foreign item; p = placement/presentation. These marking guidelines consist of 12 pages. Copyright reserved Please turn over

Accounting/P2 2 DBE/May/June 2024 SC/NSC – Marking Guidelines 1.1 BANK RECONCILIATION 1.1.1 Calculate the correct bank account balance on 31 May 2024. WORKINGS ANSWER one mark one mark; both figures must be entered in CRJ & CPJ (5 480 – 4 580) 9 050 – 5 000 ✓✓ + 900 ✓✓ – 310 ✓ – 1 780 ✓ + 1 060 ✓ CRJ CPJ OR 9 050 + (900 + 1 060) – (5 000 + 310 + 1 780) 3 920  one part correct 1 960 three marks 7 090 four marks ignore sign OR Bank Account format Inspect whether 9 050 5 000 DR or CR for 900 310 Recon (1.1.2) 1 060 1 780 Bal c/d 3 920 Be alert to alternative presentations for calculations 8 1.1.2 Bank Reconciliation Statement on 31 May 2024 ONE- OR: ONE- COLUMN COLUMN DEBIT CREDIT METHOD METHOD DR and CR Balance as per bank statement 21 520 (21 520) totals must 21 520 * Do not accept R1 550 & R4 170 be the same Could be Dr Outstanding deposit 17 500 (17 500) 17 500  Error on statement (25 000) 25 000 25 000  Outstanding EFT No. 819 (11 880) 11 880 11 880  Error on statement 1 780 (1 780) 1 780 3 920 Balance as per bank account # 3 920 (3 920) Do not accept R4 170 & R1 550 See 1.1.1 Could be Cr 40 800 40 800 6 * balancing figure # check 1.1.1 to assess if candidate has calculated a favourable or overdraft balance -1 Presentation (inappropriate / no details provided); -1 foreign items / superfluous items, (only if mark/s are earned in 1.1.1 for the same figure) max -1 If candidate presents one-column & two-column reconciliation, mark version that benefits candidate For the 2-Column method, candidates must place figures in the correct column to earn marks For the 1-Column method, candidates must present the appropriate sign i.e. positive or negative Copyright reserved Please turn over

Accounting/P2 3 DBE/May/June 2024 SC/NSC – Marking Guidelines 1.1.3 Explain TWO important instructions that Scot should give to Kiki to ensure that corruption does not occur with regards to the processing of EFTs. Any TWO control measures ✓✓ ✓✓ part marks for incomplete or unclear response Be alert to other valid answers • Before processing EFTs, Kiki must check that the bank details and amounts due are correct by referring to appropriate documents and records of service providers / Bank confirmation letter to verify bank details. • She must monitor the bank transaction records continuously provided on the business electronic statement. • She must protect all the passwords and codes that are necessary for using the online application and computer system. • Authorisation by supervisor: She must report daily to her supervisor (or Scot) on the daily transactions (especially for suspicious transactions). • One Time Pin (OTP) must be authorised by the supervisor (or Scot) for processing all EFTs or for certain transactions or payments over a specific amount / Only assigned individuals are allowed to initiate, authorise and reconcile EFTs. • Set daily limits on the banking app which can be altered by user if necessary. • Regular check of all notifications on banking app to verify movements of cash. • She must review and cross-reference banking app messages with the corresponding documents to confirm if payments requests are legitimate. If an EFT is received e.g. • If payer notifies business that payment has been made, then Kiki must check to the electronic bank statement before recording the receipt. 4 1.2 EXTRACT: LIST OF DEBTORS DEBTORS WORKINGS BALANCE A. Judy 27 750 – 9 000  18 750  B. Benior (400) + 9 000  8 600  one mark one mark 3 000 + 3 000 (2 400 x 25/75) OR (3 200 – 2 400) 24 500 * C. Oliver 19 300 + 6 000  – 800  *one part correct Do not mark R3 000 in the 2nd adjustment Both figures required D. Fiery (3 490)  2 900 – 6 390  (or – 7 100 + 710) *operation 12 TOTAL MARKS 30 Copyright reserved Please turn over

Accounting/P2 4 DBE/May/June 2024 SC/NSC – Marking Guidelines QUESTION 2 2.1.1 Calculate the VAT amount on the goods sold by the business. WORKINGS ANSWER [182 000 x 90%] two marks one mark two marks 101 400  (839 800 ✓ – 163 800 ✓✓) x 15% OR 125 970 – 24 570 one part correct 676 000 three marks if x15% 4 2.1.2 Calculate the amount payable to or receivable from SARS on 30 April 2024. WORKINGS ANSWER See 2.1.1 – 5 340 – 82 200  + 101 400  – 4 110  + 4 800  (31 510 x 15/115) OR 5 340 + 82 200 – 101 400 + 4 110 – 4 800 OR VAT Control OR VAT Control 14 550  one part correct 5 340 101 400* 101 400* 5 340 82 200* 4 800* 4 800* 82 200* 4 110* 4 110* Bal c/d 14 550 Bal c/d 14 550 Mark one option only; inspect option that benefits the candidate. Be alert to alternative presentations for calculations. If no sign provided, assume the figure is positive. *Amounts may be in brackets in the opposite column (side). 7 INVENTORY VALUATION 2.2 Calculate the expected cost price of one LITCHI phone in Rands per unit. WORKINGS ANSWER [ 5 488 two marks ] [($280 x R17,50) ✓ x 1,12 ✓] + (R303 600 ✓ ÷ 300 ✓) 4 900 one mark +588 one mark +1 012 two marks OR [($280 x 17,50 x 300) (1 470 000 x 12%)] ( 1 470 000 + 176 400 + R303 600) ÷ 300 R6 500 one mark one mark one mark one mark one part correct OR 1 950 000 three marks 1 646 400 two marks one mark [($280 x R17,50 x 1,12) x 300] + R303 600 300 one mark 5 2.3 Calculate the total value of the closing stock of the CLEO and BRUMA phones on 29 February 2024, using the specific identification method. MODEL WORKINGS ANSWER (270 + 2 265 – 2 180) CLEO 355 ✓✓ x R8 000 2 840 000  OR If x 8 000 20 280 000 – 17 440 000 BRUMA 920 x R2 500 2 300 000 ✓✓ Accuracy marks only TOTAL 5 140 000 * 6 Copyright reserved Please turn over

Accounting/P2 5 DBE/May/June 2024 SC/NSC – Marking Guidelines 2.4 Calculate the average stock turnover rate for the CLEO phone for 2024. WORKINGS ANSWER 2 160 000 +18 120 000 – 2 840 000 24 416 000 x 100/140 OR 6 976 000 x 100/40 if units are used: OR 2 180 x 8 000 OR 24 416 000 – 6 976 000 two marks 7 times  2 180_____ one part correct; 17 440 000  ½ (270 + 355) Accept 6,9 times ½✓(2 160 000✓+2 840 000 see 2.3) 312,5 5 000 000 two marks 2 500 000 three marks 6 2.5 The directors took decisions to adjust the mark-up % on the CLEO and BRUMA phones for the 2024 financial year. Explain how these decisions impacted on the gross profit and cash flow of the company as well as on the stock turnover rates of each model. Assume that points on gross profit, units sold or sales revenue will all have an impact on cash flow. Any one point per block is sufficient for 2 marks (explanation for one mark & figures for one mark). Mark each product globally i.e. do not simply repeat figures. Be alert to other responses or figures that are valid for each point. CLEO BRUMA Explanation ✓ ✓ Figures ✓ ✓ Explanation ✓✓ Figures ✓✓ Accept any TWO different points Accept any TWO different points Do not accept mark-up Do not accept mark-up • Gross profit increased • Gross profit increased (from R5 900 000) to (from R2 540 000) to Explanation R6 976 000 / by 18,2% / R3 027 500 / by on gross by R1 076 000 R487 500 / 19% despite profit & cash • Units sold increased from the higher mark-up % flow 1 475 to 2 180 / by 705 / • Units sold dropped from 47,8% 2 540 to 1 730 / 810 • Sales revenue increased units / 33% (from R17 700 000) to • Sales decreased by R24 416 000 / R267 500 / from by R6 716 000 / by 37,9% R7 620 000 to contributing to better cash R7 352 500 / by 3,5% flow. • STR decreased / slower • STR increased / improved (from 10,2) to 3,1 times. (from 4,4) to 7 times see 2.4 • On average 144 BRUMA • Customers prefer a better phones sold p.m. Explanation quality phone / On average (declined from 212 in on stock- 182 CLEO phones. are sold previous year) turnover p.m. (increased from 123 in • High closing stock of 920 rates previous year) / overestimated demand • Appropriate stock on hand and overstocked for 4 355 units or 2,5 months months 8 Copyright reserved Please turn over

Accounting/P2 6 DBE/May/June 2024 SC/NSC – Marking Guidelines 2.6 If the directors go ahead with the LITCHI phones and order a lot more in the future and sell it at a mark-up of 40% on cost, how could this impact on the sales of the CLEO and BRUMA phones. Explain, quoting figures to support your opinion. Any valid explanation ✓✓ part marks for incomplete or unclear answer Figure/s or calculations ✓✓ Be alert to other valid explanations • This would place the selling price between the Cleo (R11 200) and the Bruma (R4 250); which could negatively affect the sales of both models (Cleo may drop due to a cheaper alternative; Bruma sales may drop due to a less expensive quality phone) • The directors should be aware that they might lose out on the high gross profit earned on the Cleo models (R3 200) against (R2 600) [6 500 see 2.2 x 40%] on the Litchi. [The expected selling price would be R6 500 x 1,40 = R9 100] see 2.2 4 TOTAL MARKS 40 Copyright reserved Please turn over

Accounting/P2 7 DBE/May/June 2024 SC/NSC – Marking Guidelines QUESTION 3 3.1 3.1.1 B  selling & distribution 3.1.2 D  administration 3.1.3 A  factory overheads 3 NARDO MANUFACTURERS 3.2 FACTORY OVERHEAD COST NOTE Incorrect amount calculated by bookkeeper 258 200 Water and electricity + 28 800 ✓✓ Accuracy marks Rent expense –142 800 + 74 800 OR 13 600 X 5 – 68 000 ✓* Insurance – 48 000 + 52 500 OR 12 000 – 7 500 + 4 500 ✓* OR 12 000 x 3/8 TOTAL # one part correct, must include 258 200 223 500  7 do not mark workings *if final figure correct; award 1 mark if sign is incorrect 3.3 PRODUCTION COST STATEMENT ON 29 FEBRUARY 2024 *workings in square brackets constitute one part, cannot be separated. Mark one option only; inspect option that benefits the candidate . Direct material cost [84 000 + 495 600] [84 000 + 739 600] 695 500 * 579 600 ✓ + 115 900 ✓✓ OR 823 600 – 128 100 one mark two marks Direct labour cost Balancing figure PC – DMC 710 300  Must be DLC for this line Prime cost 1 405 800 Factory overhead cost see 3.2 223 500  Total manufacturing cost Operation PC + FOH 1 629 300  Work-in-progress (1 March 2023) 30 700 1 660 000 Work-in-progress (29 February 2024) Balancing figure accept a positive figure (64 200)  must be WIP for this item Cost of production of finished goods 1 595 800  Accuracy marks 10 *one part correct Copyright reserved Please turn over

Accounting/P2 8 DBE/May/June 2024 SC/NSC – Marking Guidelines HIKING BAGS 3.4 Comment on the control over direct material cost of hiking bags. Quote figures. Explanation on control (one mark) Figures and trend (one mark; can be implied) Not well controlled  (above the inflation rate of 6%) as DMC increased (from R230) to R320 / by R90 / by 39% ✓. Provide TWO reasons that may have contributed to the change in the unit cost. Any TWO valid reasons   • Wastage / theft of material in production. • Scarcity of material caused increase in price / market conditions. • Change of supplier. • Additional transport / storage costs / import duties / exchange rate. • Poor quality of materials / cutting of material OR better quality materials therefore more expensive. • Lack of supervision / poor internal control / unskilled workers (re-cutting) • Faulty equipment / poor technology 4 3.5 Explain whether the decision to increase the selling and distribution cost of hiking bags was beneficial to the business or not. Quote figures. Figures ✓ Comment on production or profitability  part marks for incomplete answers each bullet counts for 3 marks • An increase in BEP (from 2 273 units) to 4 328 units / by 2 055 units / by 90%. • A very small increase in production (from 4 000 units) to 4 200 units / by 200 units / by 5%. • A loss on 128 bags in 2024 against a profit of 1 727 bags in 2023 / A loss of R21 120 for 2024 against a profit of R531 916 in 2023. Response for one mark: Selling & distribution increased (from R80) to R160 / by R80 / by 100% (doubled) 3 3.6 Kyla plans to increase production of hiking bags by an additional 2 500 units over the next financial year. Assuming no change to the current cost structure, calculate the additional net profit that she could expect to earn in 2025. *workings in square brackets constitute one part, cannot be separated. WORKINGS ANSWER [780 – 615] (2 500 ✓ x 165 ✓✓) – 21 120 ✓ (accept 21 000 / 20 999,55 / 412 500 three marks 127,3 or 127,27 x 165) OR 391 380  1 105 500 – 714 120 *one part correct two marks two marks OR Accept R391 500 2 372 two marks two marks (4 200 + 2 500 – 4 328) x 165 If 412 500 is final answer award 3 marks OR Let the expected profit = y 714 000 + y = (4 328 + 2 372) 714 000 + y = 6 700 x 165 780 – 615 714 000 + y = 1 105 500 y = 1 105 500 – 714 000 = 391 500 5 Copyright reserved Please turn over

Accounting/P2 9 DBE/May/June 2024 SC/NSC – Marking Guidelines HIKING JACKETS 3.7 Comment on the fixed cost per unit of hiking jackets and explain the major cause for the change in this unit cost. Be alert to the two explanations being combined in one response. Part-marks for incomplete responses. General explanation  Figures and trend  Although the fixed cost per unit increased (from R130) to R196,50 / by R66,50 / by 51,1%, the total fixed cost is relatively constant and well controlled; and fixed costs are not related to the level of production. Explanation on major cause of dis-economies of scale ✓✓ figures are not necessary for this part • A decrease in production (from 6 000 units to 4 000 units) contributed to the increase in the fixed cost per unit / Resulted in less units produced to carry the fixed cost i.e. dis-economies of scale. • Inefficiency in manufacturing process due to equipment breakdowns or wastage of resources. [Do not accept increase of R6 000 in total fixed cost for this question] 4 3.8 Identify the production cost of hiking jackets that should be of serious concern to Kyla. Direct labour cost ✓ [Do not accept any other alternatives for this question] DLC increased (from R110) to R175 / by R65 / by 59%. ✓ Provide TWO valid solutions to this problem. Any TWO points   Be alert to alternative valid responses • Monitor overtime usage to identify area of concern / control overtime • Monitor / better supervision of work during normal time • Have back-up plans for load-shedding (disruptions) • Set targets to be completed at regular intervals / performance incentives must be tied to productivity targets / pay according to units produced • Training / cross-training of employees to perform multiple tasks • Recruit skilled employees • Adopt new technology (advanced machinery) to complete hiking jackets in less time / ensure greater accuracy and consistency 4 TOTAL MARKS 40 Copyright reserved Please turn over

Accounting/P2 10 DBE/May/June 2024 SC/NSC – Marking Guidelines QUESTION 4 4.1 DEBTORS' COLLECTION SCHEDULE MONTHS CREDIT SALES MAY JUNE If superfluous entry, lose MARCH 712 800 171 072 method on total APRIL 792 000 356 400 190 080  MAY 871 200 206 910 392 040  950 400 x [25% x 95%] JUNE 950 400 OR 237 600 – 11 880 225 720  CASH FROM DEBTORS 734 382 807 840  one part correct 8 If figures have been shifted up, -1 for presentation 4.2 Calculate: (i) Cash sales for June 2024 WORKINGS ANSWER (950 400 x 100/45) 1 161 600  950 400  x 55/45  OR 2 112 000 – 950 400 one part correct one mark one mark 3 (ii) Payments to creditors in June 2024 WORKINGS ANSWER (1 936 000 x 100/160) (5 500 x 70%) 1 210 000  x 70%  OR 3 850 x 220 847 000  one part correct two marks one mark 4 (iii) Hire of delivery vehicle expense for May 2024 WORKINGS ANSWER (34 810 x 18/118) 34 810  x [100/118]  OR 34 810 – 5 310 29 500  one part correct one mark one mark 3 4.3 Calculate: % increase in salaries of office workers from 1 June 2024 WORKINGS ANSWER 2 480  4%  64 480 – 62 000 x 100 one part correct % sign not necessary 62 000  Must be x 100 4 Copyright reserved Please turn over

Accounting/P2 11 DBE/May/June 2024 SC/NSC – Marking Guidelines 4.4 Explain how the competitor affected the sales and cash flow of the business in April 2024. Provide TWO different points, with figures. Be alert to the two explanations being combined in one response. Part marks for incomplete answers Any TWO valid responses ✓✓ ✓✓ • Number of units sold is 52 units (26%) less than budgeted / budgeted to sell 200 units, only sold 148 units • Total sales are less than budgeted by R457 600 (26%) / budgeted for total sales of R1 760 000, actual was R1 302 400 • Credit sales is above by 35% / budgeted for 45% of total sales, actual is 70% of total sales / budgeted 90 units while actual was 104 units • Cash sales is less than budgeted by 25% / budgeted cash sales was 55%, actual cash sales amounted to 30% of total sales / budgeted 110 units while actual was 44 units Example of a complete response for 4 marks: • Cash sales were R577 280 less than budget / budgeted R968 000 actual R390 720 / difference 59,6%. Credit sales is R119 680 more than budgeted / actual R911 680 while budget is R792 000 / difference 15,1% more 4 4.5 Explain whether Dan would be satisfied with the number of units sold in May 2024 as a result of his decision to adjust the selling price of the product. Provide TWO points, with figures. TWO valid points (with figures) ✓✓ ✓✓ Yes / No must be implied in the figures given part marks for incomplete / unclear responses • Reducing the mark-up (from 60%) to 35% resulted in more units sold • Number of units sold is more than budgeted by 25 units (from 220 to 245 / by 11,4%) • Total sales budgeted amount of R1 936 000 is more than the actual of R1 819 125 / difference R116 875 / by (6%) • Maintaining the higher level of credit sales at 70% of total sales still contributes to the cash-flow problem created in April 2024. 4 Copyright reserved Please turn over

Accounting/P2 12 DBE/May/June 2024 SC/NSC – Marking Guidelines 4.6 Dan is aware that not all salespersons would be satisfied with the decisions he has taken regarding their earnings. Salesperson John was satisfied whereas Sally was not. Provide ONE reason to support John’s opinion and ONE reason to support Sally’s opinion. Quote figures. Yes / No must be implied in the figures given part marks for incomplete / unclear responses REASON TO SUPPORT JOHN ONE valid point (with figure) ✓✓ • Commission is budgeted at 15% of sales, they received 20% of actual sales. • They expected average is R24 200 per person but received R45 478 each (R363 825/8). • They received and average of R16 280 each in April 2024, compared to R45 478 in May 2024. • Commission increased from R1 320 per unit to R1 485 per unit / by R165 per unit / by 12,5% per unit REASON TO SUPPORT SALLY ONE valid point (with figure) ✓✓ • Reducing the number of salespersons from 12 to 8 persons may have increased their workload. • Sally may have been shifted to a new job which she must still learn losing on 15% commission / she has to settle for a fixed salary (which could be lower than the commission) / she might be worried about being retrenched (4 less salespersons). 4 4.7 Calculate the total loan amount including interest. WORKINGS ANSWER 13 800 x 12 x 10 If deposit of R220 000 is added, ignore the figure 1 656 000  Award marks on R1 656 000 or on the R13 800 x 12 x 10 Accuracy marks 2 4.8 The owner is unsure about purchasing or renting the property. Explain ONE point in favour of purchasing the property and ONE point against this proposal. Be alert to alternative valid responses Part marks for incomplete or unclear responses IN FAVOUR OF • The owner would benefit from capital gains (due to PURCHASING THE appreciation of the value of the property). PROPERTY • Property owner has tax benefit on returns (on value of property).  • It provides stability and control over property expenses / (can save on rent expenses) & rather pay off mortgage. • The owner can borrow future loans against the value of the building as security for the loan. AGAINST • Rent would be tax-deductible. PURCHASING THE • Not responsible for repairs and maintenance. PROPERTY • Avoid mortgage costs / municipal rates / transfer duties. • It provides the flexibility to move to another place without  any commitment of a long-term mortgage. • He will not be directly affected by fluctuations in interest or real estate market / avoids the financial risk associated of being a property owner. 4 TOTAL MARKS 40 TOTAL: 150 Copyright reserved