ACCOUNTING PAPER 2
GRADE 12
NATIONAL SENIOR CERTIFICATE EXAMINATIONS
MAY/JUNE 2021
MARKING PRINCIPLES:
- 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.
- Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item.
- Full marks for correct answer. If answer incorrect, mark the workings provided.
- 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).
Note: if figures are stipulated in memo for components of workings, these do not carry the method mark for final answer as well. - 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.
- Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates.
- This memorandum is not for public distribution, as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions.
- Where penalties are applied, the marks for that section of the question cannot be a final negative.
- Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer.
- Operation means 'check operation'. 'One part correct' means operation and one part correct. Note: check operation must be +, -, x, ÷, or per memo.
- In calculations, do not award marks for workings if numerator & denominator are swapped – this also applies to ratios.
- 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 .
- Be aware of candidates who provide valid alternatives beyond the marking guideline. Note that one comment could contain different aspects.
- Codes: f = foreign item; p = placement/presentation.
QUESTION 1
1.1 VALUE-ADDED TAX (VAT)
1.1.1
Explain why the government implemented VAT in South Africa. State ONE point.
Any ONE valid explanation✓✓ part mark for unclear/incomplete/partial answers - Additional source of revenue for the government / on a more regular basis.
- To fund infrastructure / provision of public goods and services;
- To provide for basic/essential services for the communities;
- Finance public debts; maintain the large state owned enterprises.
- It is an indirect tax that is paid by all – easy and quick way to generate extra funds
(2) |
| Explain why some products are zero-rated products. State ONE point. Any suitable explanation ✓✓ part mark for unclear/incomplete/partial answers - To make basic necessities affordable to indigent / poor communities / help them to live better (provide food) / they are cheaper (by the amount of VAT)
- Zero-rates items are regarded as essential items – consumed by all; should be accessible to all.
(2) |
1.1.2
Calculate the amount payable to SARS in respect of VAT for the two months ended 30 April 2021.
one part correct
✓ ✓✓ ✓✓ ✓ ✓✓ ✓ ✓ ✓
9 450 + 61 800 – 34 500 – 1 890 – 2 520 + 1 140 + 1 380 = 34 860
OR
– 9 450 – 61 800 + 34 500 + 1 890 + 2 520 – 1 140 – 1 380 = – 34 860
OR
ignore sign on final answer
Output VAT: 61 800 + 1 140 + 1 380 = 64 320 + 9 450 = 73 770
Input VAT: 34 500 + 1 890 + 2 520 = 38 910
Diff: 34 860
OR
VAT CONTROL* 34 500
1 890
2 520
34 860 | 9 450
61 800
1 140
1 380 | | 73 770 | 73 770 | Mark only ONE option
Choose the option that benefits the candidate - Amounts may be on opposite sides (mirror)
- Underlined amounts may be in brackets, on the opposite side
(11) |
1.2.1 CREDITORS' RECONCILIATION
Foreign entries – 1 per line max -3 if mark is scored on that line
If no sign, assume +ve; Accept brackets for negative amounts; not DR or CR
# mark correct answers in each column, even if not in correct line
| | Creditors' Ledger
Account of PN Suppliers
in the books of Khaya Stores | Statement of Account from
PN Suppliers |
| Balance | 101 000 | 85 380 |
| i | (10 800 - 18 800) - 8000✓✓ | |
ii | | -600 one mark - 600 one mark
-1200 ✓✓ |
| iii | +1 140 ✓ | |
| iv | - 6 100 ✓ | |
v | | (11 800 - 12 980) - 1 180 ✓✓
must be both for two marks |
| vi | | - 2 660 ✓✓ |
| vii | | + 7 700 ✓ |
| | 88 040 ✓ | 88 040 |
*Inspect / for both totals one part correct/must include opening balance
check for reasonableness on final answer / one correct total used
(12)
1.2.2
State TWO benefits of using electronic funds transfers (EFTs) for payments to creditors.
Any TWO points ✓✓ accept short, incomplete statements, one-word answers if message is clear | Fast (no queues) | cheaper (lower charges) | reduces theft | | Convenient | can operate outside business hours | | Easy to use | in the comfort of the business or home | | safe (security risks) | instant feedback (notifications/ proof of payment) | (2) |
| The internal auditor feels that this incident of fraud should never have occurred in this business. Explain why he feels this way.
ONE valid point ✓✓ part mark for unclear/incomplete/partial answers - The accountant, generally regarded as a senior employee in the business is expected to be responsible, professional and trustworthy / work independently.
- This was a deliberate action (nepotism) to defraud the business; which is not expected from an employee of his professional standing (loyal / ethical)
- The management should be aware of the potential for fraud of this nature and have internal control measures in place to prevent this / his competence may be questioned / he could be charged or sued for fraud or negligence.
- Preventative controls should have been in place to ensure employees are not tempted / consequences for defaulters should be in their contracts
(2) |
| Explain how this could have been prevented. State TWO points.
Any TWO points ✓✓ ✓✓ part mark for unclear/incomplete/partial answers - Could have appointed two people to authorise each EFT payment / division of duties - one person serves as a check on another /
- Screen suppliers properly to ensure that they are reliable/credible organisations / ensure that they actually exist.
- Do character checks on newly appointed employees as a reference for ethical conduct from their previous employers
- Bank notifications (sms) / OTP to the owner or a supervisor for all bank transactions;
- Regular / random supervision or checking of accounting records / journals / documents
(4) |
TOTAL MARKS: 35
QUESTION 2
2.1
| 2.1.1 | E ✓ selling and distribution |
| 2.1.2 | A ✓ factory overheads |
| 2.1.3 | B ✓ administration |
(3)
Only ONE correct answer ; accept cost category or recognisable abbreviation
2.2 MEISIES OUTFITTERS
2.2.1 FACTORY OVERHEAD COST NOTE
| Factory rent 122 400 x 320/1280 | 30 600 ✓✓ |
| Water and electricity 81 600 x 15% | 12 240 ✓✓ |
Insurance 20 720 x 12/14 x 1/3
17 760 | 5 920 ✓✓* |
Indirect labour / wages to cleaners
155 760 ✓ x 90/590 ✓ OR 26 400 x 90% or – 2 640
one mark one mark | 23 760 ✓* |
| Salary of dressmaking supervisor | 76 960 |
| Depreciation on machines | 30 300 |
| Sundry factory expenses | 10 670 |
| TOTAL | 190 450 ✓* |
(10)
*operation, one part correct
-1 foreign item (e.g. delivery expenses)
2.2.2
| Calculate the total cost of production of school dresses produced. |
| WORKINGS | ANSWER |
✓ ✓ ✓ see 2.2.1
475 600 + 535 450 + 190 450 | 1 201 500✓
one part correct |
(4)
2.2.3
Minnie is concerned about wastage of fabric in the dressmaking section.
Calculate the cost of this wastage to the business. |
| WORKINGS | ANSWER |
520 three marks
(29 000 ✓– 28 480✓✓) x R16,40✓
OR
29 000 x 16,40 17 800 x 1,6m x 16,40
475 600 – 467 072
two marks two marks
OR
520 three marks
(18 125 – 17 800) two marks
(325 x 1,6m) x R16,40
two marks one mark one mark |
R8 528 ✓
one part correct |
(5)
2.2.4 The internal auditor expressed concern about the direct labour cost for the school dresses.
Explain the problem that is of concern to the auditor. Quote figures.
Explanation ✓ figures (showing a comparison) ✓✓
(5 x 8 x 46) - Normal hours worked is less than expected by 590 (1 840 – 1 250) / 32%.
- Overtime hours is high; 36,5% of total production time worked (720/1 970)
- Overtime pay is R9 200 more than the normal time pay (259 200 – 250 000) / exceeds normal time pay by R9 200.
(3) |
| State TWO possible causes of this problem. Any TWO reasons✓✓ accept short, incomplete statements if message is clear - Interruptions due to load-shedding/lockdown (Covid -19 related) /strikes
- Fluctuating periods of high and low demand (opening of schools/each term)
- Poor supervision during normal time / deliberate wasting of time.
- Authorizing overtime / exploiting overtime (due to higher overtime rate)
(2) |
2.2.5
| Provide a calculation to confirm that the break-even point for the current financial year is 17 000 units. |
| WORKINGS | ANSWER |
Mark numerator and denominator as such
229 500 ✓
75,00 ✓ – 61,50 ✓
13,50 two marks | 17 000 units
Amount given |
(3)
2.2.6
| Comment on the level of production achieved and the break-even point calculated above. Quote figures. Comment (must compare production to BEP) ✓ figures ✓ - The business produced 800 units more than the BEP (17 800 – 17 000) / the business is making a profit on 800 units.
- Low profitability (on only 800 units) considering the wastage of material and time lost in production.
(2) |
2.2.7
Calculate the extra profit that would be earned if an additional 500 dresses are made and sold.
Assume that all costs are unchanged. |
| WORKINGS | ANSWER |
500 ✓ x R13,50 ✓
(75,00 – 61,50) one mark
OR
(17 500 x 13,50)
236 250 – 229 500
OR
(18 300 x 13,50) (17 800 x 13,50)
247 050 – 240 300
OR
(500 x 75) (500 x 61,50)
37 500 – 30 750
one mark one mark
on each line |
R6 750 ✓ |
(3)
QUESTION 3
3.1
| NO. | CASH BUDGET FOR JULY | PROJECTED INCOME STATEMENT
FOR JULY |
| RECEIPT | PAYMENT | INCOME | EXPENSE |
| e.g. | | 4 200 | | 4 200 |
| 3.1.1 | | 6 000 ✓ | | 4 000 ✓ |
3.1.2 | 300 ✓ | 45 000 ✓ | 300 ✓*
see receipt | |
3.1.3 | 23 200 ✓ | | 23 200 ✓
#accept net amount:
R7 200 two marks |
16 000 ✓ |
-1 per line for foreign entries (mark scored for an amount elsewhere on a line, or additional superfluous entries above max marks per line )
3.2 ANOKHI (PTY) LTD
3.2.1 CREDITORS' PAYMENT SCHEDULE
| | CREDIT PURCHASES | MAY 2021 | JUNE 2021 | JULY 2021 |
| March 2021 | 164 500 | 16 450 | | |
| April 2021 | 170 800 | 85 400 | 17 080 | |
| May 2021 | 171 500 | 65 170 | 85 750 | 17 150 ✓✓ |
| June 2021 | 178 500 | | 67 830 | 89 250 ✓✓ |
| July 2021 |
182 000 ✓✓ | *if x 40% x 95%
four marks if answer is correct |
69 160 ✓✓ |
| Payment to creditors | 167 020 | 170 660 | 175 560 ✓
one part correct |
Ignore foreign entries, penalise on final answer
# mark correct amounts in July column, even if not on the appropriate lines
(9)
3.2.2 Calculate:
| WORKINGS | ANSWER |
(a) Rent income in July 2021
15 500 x 1,09 or 15 500 + 1 395 | 2 16 895 ✓✓ |
(b) Amount of the loan
37 800 two marks
3 150 ✓ x 12 ✓
13,5/100 ✓ or 13,5%
Loan amount x 13,5% x 1/12 = 3 150
(3 150 x 12) / 0,135
OR
(3 150 x 12 x 100) / 13,5 | 4
280 000 ✓
one part correct mark numerator & denominator as such
|
(c) Salaries of sales assistants
41 000 ✓
+ 18 450✓✓ (41 000 x 3/5 x 0,75) two marks
(8 200 x 3 x 75%) two marks
+ 4 100 ✓✓ (8 200 x 50%) two marks
OR
24 600 x 175% 8 200 x 2 8 200 x 50%
43 050 + 16 400 + 4 100
two marks one mark two marks | 6 63 550 ✓ one part correct |
(d) Directors' fees
720 000/12 (38 880 x 100/108) two marks
60 000 ✓ + 36 000 ✓✓ | 4 96 000 ✓ one part correct |
(16)
3.2.3
Comment on the effectiveness of the advertising. Quote figures.
Comment on control (actual vs budgeted; may be implied in response)✓ effect on sales ✓ figure ✓
Although the same amount (Nil change / R0 / R35 280) as budgeted was used, actual sales was less than budgeted by 20% or by R176 400 or R882 000 –R705 600; advertising was therefore not effective.
(3) |
| Comment on the control over delivery expenses. Quote figures. Comment on control (actual vs budgeted; may be implied in response)✓ effect on sales ✓ figure ✓ - Delivery expenses is lower than budgeted by R6 130 (R57 330 – R51 200) or by 10,7%, while sales were less than expected by 20% or by R176 400 (R882 000 – R705 600); delivery expenses therefore not well controlled.
- Budgeted for 6,5% of sales – actual was 7,3% of sales (0,8% higher); delivery expenses therefore not well controlled.
(3) |
3.2.4
State TWO benefits of this decision.
TWO valid points ✓✓ accept short, incomplete statements if message is clear - The business will own an asset (increase in value of assets)
- Deliveries can be made at the convenience of the business / is under the control of the business.
- Possible savings / more economical (saves on the mark-up which would apply to a supplier) / cutting out the middleman.
- Can be used to generate other income by outsourcing the vehicle
(2) |
Apart from the items reflected in the Budget (Information F), list FOUR other items that Kayla should include in the budget.
Any FOUR items: ✓✓✓✓ be alert to other valid alternative answers related to the vehicle
Possible responses Do not accept any non-cash items, e.g. Depreciation | Insurance | Repairs | Delivery fee income | | Petrol and fuel | Instalment payments and interest | | Additional driver | Vehicle licence | | Toll charges | Security for vehicle (garage) | | Maintenance | Accommodation for driver (working late) | (4) |
QUESTION 4
Accept recognisable abbreviations / only ONE correct answer
4.1
| 4.1.1 | First-in-first-out (FIFO) ✓ |
| 4.1.2 | Periodic ✓ |
| 4.1.3 | Weighted average (WAM) ✓ |
| 4.1.4 | Perpetual ✓ |
(4)
4.2.1
| Calculate: Value of the closing stock |
| WORKINGS | ANSWER |
(3 700/20 = 185)
320 - 20 380 – 300 or units in first part
(300 ✓ x 185 ✓) + (80 ✓ x 173 ✓)
55 500 two marks 13 840 two marks
(59 200 – 3 700) two marks
(300 x 170) (300 x 15) (80 x 160) (80 x 13)
OR 51 000 + 4 500 + 12 800 + 1 040 one mark each
(5) | 69 340 ✓ one part correct |
| Calculate: Cost of sales |
| WORKINGS | ANSWER |
336 870 three marks
(83 500 + 129 750 + 59 200) one mark
(68 120+ 272 450 – 3 700) – 69 340
✓ ✓ ✓ ✓ see CS above
(670 x 173)
OR 68 120 + 83 500 + 115 910
one mark one mark two marks
(5) | 267 530 ✓ one part correct |
4.2.2
| Calculate the average stockholding period (in days). |
| WORKINGS | ANSWER |
68 730 three marks see CS above
½ ✓ (68 120 ✓ + 69 340 ✓) x 365
267 530 ✓ see COS above
OR using units
½ (420 + 380)
400 x 365
1 590
Allocate marks accordingly
(5) |
93,8 days✓ one part correct If x 365
OR
91,8 days |
Explain whether Gwen should be satisfied with this figure, or not. State TWO points.
NOTE: The average stock holding period on 29 February 2020 was 52 days. |
| Any TWO points ✓✓✓✓ part mark for unclear/incomplete/partial answers Figures not required by question; mark according to candidate’s calculation above. “NOT SATISFIED” OPTIONS - The stockholding period has increased (from 52 days to 93,8 days see above) / Stock is not moving as fast has she expects.
- Possibility of bags becoming out-dated / out of fashion / obsolete
- Occupying storage space / idle stock is a risk of theft
- Too much working capital / cash tied up in stock / she will have to reduce prices to reduce stock
“SATISFIED” OPTIONS - Bags are durable and can be sold in the future / possibly taken advantage of bulk discounts / increased profitability in the future (inflation)
- State of the economy (luxury goods) drop in demand was expected.
(4) |
4.3 PROBLEM-SOLVING
Mark relevant problem or figures if in wrong columns / award for appropriate advice, even if problem is unclear / incorrect # be alert to additional correct options / figures
| | PROBLEM FOR 2021
(with figures)
TWO valid problems ✓✓
with figures ✓✓ | ADVICE
Per problem identified ✓✓
Mark advice independently
Different problems required |
JACKETS | - Too much stock on hand (615 units) Increased by 208 units (from 407 to 615)
- Drop in stock turnover rate 1,9 to 0,9 / high stock balance results in stock not moving / higher mark-up % also contributes to this
- Price too high (MU% increased from 50% to 75% / a 25% increase / price increase of R90 per unit (R630–R540)
- Purchasing the same number of units (800) despite having excess stock; contributing to stock piling.
- Stock items missing or stolen (42 units or 407 +800 – 550 – 615)
| - Increase advertising;
- Consider discounts
- Reduce mark-up%
- Order according to sales / orders received
- Reduce mark-up % to increase sales
- Have clearance sales
|
- Regular stock-take to assess available stoc
- Replace stock according to units sold (base stock)
- Security tags on products
- Physical inspection or regular stock count
- Install cameras
- Sell online (if customers are the problem)
|
JERSEYS | TWO valid problems ✓✓
with figures ✓✓ | ADVICE
Per problem identified ✓✓ |
- Decrease in units sold:
290 (2 260 – 1 970) or
302 (2 182 – 1 880)
OR drop in sales from 436 400 – 399 500 / by 36 900 / 8,5% OR by 86 900 (436 400 – 349 500 if missing cash not detected) - Cash missing or stolen R50 000 (399 500 – 349 500)
Or 69 125 (if returns not included) - High returns from customers; 78 (3,5% of sale) to 90 (4,6% of sales)
| - Increase advertising
- Keep selling price the same to increase sales
|
- Division of duties
- Encourage use of EFTs
- Request sms for deposits
- Reconcile deposits with items sold / sales deposits
- Online sales / sell on credit – less cash handling
- Daily depositing / routine
|
- Effect stricter return policy
- Improve quality to reduce returns / do not buy inferior (cheaper) products
- change styles of jerseys / in fashion
- Train personnel to give best advice to customers.
|
TOTAL: 150