Economic and Management Sciences Grade 9 2010 Memo

Province of the EASTERN CAPE EDUCATION SENIOR PHASE GRADE 9 NOVEMBER 2010 ECONOMIC AND MANAGEMENT SCIENCES MEMORANDUM MARKS: 100 This memorandum consists of 13 pages.

2 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) SECTION A QUESTION 1 Choose the correct answer from the ones given and circle the correct one. 1.1 Which of the following entries would not affect owner’s equity? A Purchased stationery on credit. B Pay the owner’s telephone account with a business cheque. C Received monthly rent from a tenant. D Bought a vehicle and paid by cheque. 1.2 The price at which the quantity demanded is the same as quantity supplied is known as … A minimum price. B equilibrium price. C discount price. D reasonable price. 1.3 The act that provides guidelines for the maximum hours that one is allowed to work is the … Act. A Skills Development B The Employment Equity C The Labour Relations D Basic Conditions of Employment 1.4 … is when the country produces more goods and services. A Economic development B Economic growth C Economic prosperity D Economic sustainability 1.5 The total value of the final goods and services produced within the borders of a country in a given year, is called … A Gross Profit. B Gross Income. C Gross Domestic Product. D Gross National Product. (5 x 1) [5]

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 3 QUESTION 2 Fill in the missing words in the spaces provided. 2.1 Marketing intends to inform the TARGET MARKET/CONSUMERS about the business. 2.2 The CIRCULAR FLOW/ECONOMIC CYCLE DIAGRAM shows the flow of money, goods and services in an economy. 2.3 One of the RDP challenges is to redress the IMBALANCES/INEQUALITIES of the past between the rich and the poor. 2.4 A DEBIT card gives you the benefit of using it electronically without the danger of carrying a large sum of money and also the spending of money you do not actually have. 2.5 The higher the price, the lower the QUANTITY DEMANDED (NOT DEMAND) of a product. (5 x 1) [5] QUESTION 3 CHOOSE the concept in COLUMN B that matches a description in COLUMN A. Write only the chosen letter next to the question in the grid provided, e.g. 3.1 Z. COLUMN A. COLUMN B 3.1 Import and export of goods and services from A Public Relations and to another country 3.2 Difference between sales and cost of sales B National Budget 3.3 Creating a positive image of a business C Liabilities 3.4 A projected statement of government’s D Gross Profit revenue and expenditure for the year 3.5 Everything that the business owe to others E International Trade F Taxation ANSWERS 3.1 E 3.4 B 3.2 D 3.5 C 3.3 C (5 x 1) [5] TOTAL SECTION A: 15

4 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) SECTION B QUESTION 4 4.1 Differentiate between the following concepts/terms: (a) Real and monetary flow in the circular flow diagram (2 x 2) (4) Real flow is the flow of goods and services within the economic cycle. √√ Monetary flow is the flow of money in the economic cycle. √√ (b) Fixed and current assets and give one example of each: (5) Fixed assets are possessions of a business which have been purchased but not for resale, and have a long life, e.g. land and buildings/vehicles/equipment. (2 marks for correct definition and ½ mark for example) Current assets are possessions of the business that can be converted into cash, e.g. trading stock/debtors/bank. (2 marks for correct definition and ½ mark for example.) 4.2 Explain the following terms: (4 x 2) (8) (a) Exchange Rate: The price of the currency of a country in terms of the currency of another country. √√ (b) Productivity: The efficient use of resources to produce goods and services at the lowest possible cost within a given time. √√ (c) Inflation: An increase in the general price level of goods and services √√ (d) Source document Is written proof and evidence that transactions took place between two parties. √√

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 5 4.3 Decide whether the following market events indicate an increase or a decrease in quantity supplied or supply and quantity demanded or demand. Give reasons for your answer. (a) Market: Selling of Chocolate bars Event: The price of sugar decreases. Supply increases √ Reason decrease in the input price √ (b) Market: Selling of Bread Event: The price of bread decreases. Increase in quantity demanded √ Reason: Decrease in price of bread √ (c) Market: Selling Mutton Event: The price of beef decreases. Decrease in demand for mutton √ Decrease in the price of substitute √ (3 x 2) (6) 4.4 PRODUCT A √ B √ E √ BUSINESS HOUSEHOLD GOVERNMENT F √ D √ C √ FACTOR Study the following activities and locate them in the circular flow diagram. Use only the given letters next to each activity to indicate the flow. Do not rewrite the activities.

6 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) A. Jo buys a CD, pizza and sweets B. Anna pays for tickets to a rock concert C. Sasha paints housed for a summer job D. Spar supermarkets pay workers E. A defence department worker receives R60 000 per year for her work as a translator F. A policeman applies for a job with the police department (6 x 1) (6) 4.5 The graph below illustrates the demand and supply curves of Bafana Bafana T shirts. Analyse it and then answer the questions that follow SUPPLY AND DEMAND GRAPH 350 x x 340 x 330 x PRICE 320 x x 310 x x 0 100 200 300 400 500 QUANTITY (a) What quantity of T shirts will be supplied if the price is R340? 200 T-shirts √ (1) (b) What will be the quantity demanded for T-shirts when the price is R350? 100 T-shirts √ (1) (c) What will happen in the demand curve for Bafana Bafana T shirts if there are fake T-shirts selling at a cheaper price, and people are buying them? The demand curve will shift to the left . √√ (2) (d) What will happen to the supply curve, if a law is passed that all citizens of South Africa should buy the genuine Bafana Bafana T-shirts? Supply curve will shift to the right. √√ (2) TOTAL SECTION B: 17

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 7 SECTION C QUESTION 5 Read the case study below and answer the questions. A.B. Jacobs started a shoe business, AJ Stores, in Woodstock Cape Town. He raised capital by asking his parents to assist. Jacobs manufactured shoes for sports brands, security firms and schools. He professionally runs his business in a small factory with 10 staff members. They are able to produce 30 pairs of shoes every 3 hours. All the people who work for AJ Stores were previously unemployed. His workers are very happy as he treats them fairly and pays them well. Jacobs has also taken on young school leavers who are interested in shoe making and has started training them. Jacobs has also been saving his profits. Although he has to compete with cheaper imports his business is running successfully. As a result, he is thinking of expanding his business. He is looking for investors who can invest into his business. 5.1 Will AJ Stores attract investors from overseas? Explain your answer No. √ The business is too small to attract a foreign investors at this stage. √√ (3) 5.2 What form of ownership is AJ Stores? Sole trader √ (1) 5.3 Give TWO advantages of this ownership mentioned in QUESTION 5.2. He receives all the profits. √ Easy to start. Can adapt easily to changing conditions. √ (2) 5.4 Explain how investment contributes to economic growth. Investment leads to more jobs being created and this will also increase the production of goods and services. √ (1) TOTAL SECTION C: 7

8 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) SECTION D QUESTION 6 6.1 INFORMATION (A) The mark-up is as follows: 1. Cash sales 25% 2. Credit sales 40% (B) The journals for October have been summarised as follows: CASH RECEIPTS JOURNAL Bank Sales Cost of sales Debtors control Sundry accounts R71 400 R39 000 R? R20 200 R12 200 CASH PAYMENTS JOURNAL Bank Wages Trading stock Creditors Sundry control accounts R101 400 R28 200 R51 000 R14 400 R7 800 CREDITORS JOURNAL Creditors Trading Stock Stationery Sundry accounts R99 500 R71 500 R20 000 R8 000 DEBTORS JOURNAL Sales Cost of Sales R? R78 000 INSTRUCTION: 1. Use the information provided to post from the journals to the following ledger accounts. (a) Trading stock (14) (b) Creditors control (7) (c) Sales (5)

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 9 GENERAL LEDGER OF BOXER STORES BALANCE SHEET ACCOUNTS SECTION TRADING STOCK 2010 1 Balance b/ 69 000 2010 31 Cost of CRJ 31200 Oct d Oct Sales √ √√√ 30 Bank √ C 51000 √ 31 Cost of DJ 78000 √ PJ Sales √ 31 Creditors CJ 71500 √ 31 Balance c/d 82300 √√ √ √ 191500 191500 2010 1 Balance b/ 82300 √ Nov d (14) CREDITORS CONTROL 201 3 Bank √ CPJ 14400 √ 2010 1 Balance b/d 51400 0 1 Oct Oct 3 Balance c/d 136500 √√ 3 Total CJ 99500 √ 1 1 Purchases √ 150900 150900 Nov 1 Balance b/d 136500 √ 201 3 Bank √ CPJ 14400 √ 2010 1 Balance b/d 51400 0 1 Oct Oct (7) SALES 201 1 Total b/f 31000 0 Oct 31 Bank √ CRJ 39000 √

10 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) 31 Debtors DJ 97500 √√ √ 167500 201 1 Total b/f 31000 0 Oct (5)

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 11 QUESTION 7 Use the following Trial Balance of Golden Eagles Traders to prepare the following: (a) Income Statement of Golden Eagles Traders for the year ended 30 November 2010 (17) (b) Balance Sheet of Golden Eagles Traders for the year ended 30 November 2010 (18) GOLDEN EAGLES TRADERS TRIAL BALANCE AS AT 30 NOVEMBER 2010 BALANCE SHEET ACCOUNT FOLIO DEBIT CREDI SECTION T Capital B1 106 000 Drawings B2 10 802 Land and building B3 85 000 Vehicles B4 21 861 Equipment B5 18 794 Trading Inventory B6 3 431 Debtors control B7 8 520 Bank B8 200 Cash Float B9 60 Creditors B10 6 475 NOMINAL ACCOUNT SECTION Sales N1 104 944 Cost of Sales N2 52 472 Rent income N3 7 106 Telephone N4 2 223 Stationery N5 813 Salaries N6 12 155 Fuel N7 4 059 Advertising N8 613 Water and electricity N9 1 542 Cleaning material N10 1 980

12 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) 224 525 224 525

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 13 INCOME STATEMENT OF GOLDEN EAGLES FOR THE YEAR ENDED 30 NOVEMBER 2010 R Sales 104944 √ Less Cost of Sales (52472) √ Gross Profit 52472 √√ Other Income 7106 √ Rent Income 7106 Gross Income 59578 √√ Operating Expenses 23385 √√ Telephone 2223 √ Stationery 813 √ Cleaning Material 1980 √ Salaries 12155 √ Fuel 4059 √ Advertising 613 √ Water and electricity 1542 √ Operating profit for the year 36193 √ NET PROFIT FOR THE YEAR 36193 (17)

14 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) BALANCE SHEET OF GOLDEN EAGLES FOR THE YEAR ENDED 30 NOVEMBER 2010 Notes R ASSETS NON CURRENT ASSETS Fixed Assets 1 106861 √ CURRENT ASSETS 31005 √ Inventories 2 18794 ½ Trade and other Receivables/Debtors 3 3431 ½ Cash and Cash equivalent 4 8780 √ TOTAL ASSETS 137866 ½ EQUITY AND LIABILITIES NON CURRENT LIABILITIES Owners’ Equity 5 131391 √ CURRENT LIABILITIES Trade and other Payables 6 6475 √ TOTAL EQUITY AND LIABILITIES 137866 ½ (7)

(NOVEMBER 2010) ECONOMICS AND MANAGEMENT SCIENCES 15 NOTES TO THE FINANCIAL STATEMENTS ON 30 NOVEMBER 2010 1 FIXED ASSETS R106861 Land and Buildings 85 000 √ Equipment 21 861 √ 2 INVENTORIES R18 794 Trading Stock 18 794 √ 3 TRADE AND OTHER RECEIVABLES R3 431 Debtors 3 431 √ 4 CASH AND CASH EQUIVALENT R8 780 Bank 8 520 √ Petty Cash 60 √ Cash Float 200 √ 5 OWNERS’ EQUITY R131 391 Balance at the beginning 106000 √ Add Net Profit for the year 35193 √ Less Drawings (10802) √

16 ECONOMICS AND MANAGEMENT SCIENCES (NOVEMBER 2010) 6 TRADE AND OTHER PAYABLES R6475 (11) Creditors 6475 √ [35] TOTAL SECTION D: 61 GRAND TOTAL: 100