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Accounting Nov 2020 Memo

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0% found this document useful (0 votes)
55 views16 pages

Accounting Nov 2020 Memo

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© © All Rights Reserved
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PAST PAPER
NSC 2019
MEO 2019
SC CANDIDATES

GRADE 12

ACCOUNTING

NOVEMBER 2020

MARKING GUIDELINES

MARKS: 300
MARKING PRINCIPLES:
1. Unless otherwise stated in the marking guideline, 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 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). Note: if figures are stipulated in memo 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. This memorandum is not for public distribution; as certain items might imply incorrect treatment. The
adjustments made are due to nuances in certain questions.
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 and at least one part must be correct before awarding the mark.
10. Operation means 'check operation'. 'One part correct' means operation and one part correct. Note:
check operation must be +, -, x, ÷, or per memo.
11. In calculations, do not award marks for workings if numerator & denominator are swapped – this also
applies to ratios.
12. 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 .
13. Be aware of candidates who provide valid alternatives beyond the marking guideline.
14. Codes: f = foreign item; p = placement/presentation.

These marking guidelines consist of 15 pages.

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Accounting 2 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 1

1.1 1.1.1 B (bad debts)


1.1.2 D (production wages)
1.1.3 E (bank charges)
1.1.4 C (depreciation of factory machinery)
1.1.5 A (raw material to production) 5

1.2 BERGVIEW MANUFACTURERS

1.2.1 FACTORY OVERHEAD COST NOTE

Salary of factory foremen 150 000 


Depreciation on factory equipment 145 000 
Indirect material (12 400 + 33 100 – 14 300) 31 200 *
Insurance 60 000 x 3/6 or – 30 000 30 000 
Water and electricity (115 000  + 12 000 ) x 80%  101 600 *
OR 127 000 – 25 400 OR 92 000 + 9 600
Rent expense 113 000  x 7 200 / 9 000  OR 113 000 – 22 600 90 400 *
Be alert to various permutations of amounts and award marks accordingly 548 200 *
16
*one part correct

1.2.2 PRODUCTION COST STATEMENT


FOR YEAR ENDED 29 FEBRUARY 2020
*one part correct

Direct material cost 2 200 000

Direct labour cost 1 209 300 

Prime cost DMC + DLC 3 409 300 

Factory overhead cost see 1.2.1 548 200 

Total production cost operation 3 957 500 


Work-in-progress at beginning 130 000
4 087 500
Work-in-progress at end balancing figure (accept +ve difference) (40 500) 
Cost of production of finished goods
(140 000 + 4 062 500– 155 500) 4 047 000 *
6 500 000 x 100/160
Accept alternative workings e.g. Ledger format 10
-1 P Poor presentation (max -1) (no details); accept recognisable abbreviations such as DLC, FOHC

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Accounting 3 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

1.3 EASY FOODS

1.3.1 Explain why the change in units produced affected the fixed costs per
unit.
Any ONE valid reason part marks for incomplete / unclear answer
 Fixed cost are not influenced by production levels; decrease in units
produced and sold will increase the fixed costs per unit.
 Fixed costs remained constant while the number of units decreased.
 Economies of scale is only achieved if there is an increase in production 2

1.3.2 Give TWO possible reasons for the increase in direct material cost per
unit. Any TWO valid reasons part marks for incomplete / unclear answers
 Increase in price of raw material / including inflation
Reason 1  No bulk discounts due to decreased production
 Importing raw material (exchange rate / import duties)
 Increase in transport and/or storage cost of raw material
 Scarcity – price hikes due to higher demand
Reason 2  Wastage of raw material / poor management and control in
production process / poorly trained workers
 Possible theft of raw material 4

1.3.3 Explain why the business should not be satisfied with the level of
production and the break-even point. Compare and quote figures for
both years.
Comparison   figures for each year  
Any TWO of: Compare BEP of 2019 to production of 2019;
Compare production of 2019 to production of 2018
Compare BEP of 2019 to BEP of 2018

 Produced 54 000 units and the break-even point is 50 976; 3 024 above BEP.
 Production decreased from 65 000 to 54 000 units (by 11 000 units / 16,9%)
 BEP increased from 50 000 to 50 976 units (976 units / 2%)
 Profit on 3 024 units in 2019 in comparison to profit on 15 000 units in 2018 /
Drop in profits by 11 976 units 6

1.3.4 Explain ONE reason against this option.


ONE reason  part marks for incomplete / unclear answers

 This may be considered as unethical / illegal if not disclosed on packaging


/ can be sued / reported to consumer council
 Will incur additional costs in producing new packaging / advertising
 The customers will not be happy and sales would drop even more / lose
customers to competitors
 Negative impact on image of the business, when discovered. 2

TOTAL MARKS
45

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Accounting 4 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 2
2.1 VAT
No part marks for workings
Calculate the VAT amounts and indicate the effect of EACH.
DETAILS VAT AMOUNT EFFECT
Accept + or –

Total sales R81 675 Increase


Purchases of stock (i) R26 235  Decrease 
Drawings of stock (ii) R4 800  Increase 
Bad debts (iii) R915  Decrease  8

2.2 BANK RECONCILIATION AND INTERNAL CONTROL


2.2.1 Show the entries that must be recorded in the Cash Journals.
Cash Receipts Journal Cash Payments Journal
(figures only) (figures only)
65 570 two marks for both 64 790
31 350 
11 850* 14 550*
CRJ CPJ
2 700* 
150  33 500* 44 000*
CRJ CPJ 10 500* 
no part marks 9 750 
two marks for both* 3 375 
600 (CRJ) 1 200 (CPJ) 600* 
97 070 91 715 10
-1 foreign items (max -1) for any amount that earns a mark in 2.2.3.
2.2.2 Calculate the Bank Account balance on 30 April 2020.
Workings Answer
See CRJ total See CPJ total
– 3 450 + 97 070 – 91 715 1 905 one part correct
Accept ledger account format 4
CRJ and CPJ totals must include the provisional totals given

2.2.3 Bank Reconciliation Statement on 30 April 2020


One column Debit Credit
method
Balancing figure 11 955 
Balance per Bank Statement 11 955 / could be debit Do not accept
19 500
Credit outstanding deposit 27 750 27 750
Debit outstanding cheques/EFT:
No. 615 (15 750) 15 750 
No. 965 (6 750) 6 750 
No. 980 (8 600) 8 600 
EFT (7 300) 7 300 
Correction of error/wrong entry 600 600 
Balance per Bank Account 1 905 1 905 * see 2.2.2 (Dr / Cr)

-1 Presentation (max -1) for no details 40 305 40 305 9


-1 foreign items (max -1) for any amount that earns a mark in 2.2.1.

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Accounting 5 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

2.2.4 As internal auditor you are not happy with the control of cash in this business.
Explain TWO problems to confirm your suspicion. Quote figures. Give advice
on how EACH problem can be avoided in future.
Explanation with evidence Advice
Explanation  Evidence  
Problem 1 Theft / Fraud / Internal control Supervision (checking) of cash slips
measures are lacking. Cash slips against deposit slip / bank notifications
have not been recorded, R10 500 (sms) for all transactions / Recon / EFT
/ Use security company for deposits
Rolling of cash / security risk. Cash collected must be deposited
Deposit of R50 400 occurs 14 days immediately/ Sales person must not
later / Deposit of R27 750 deposit cash/Divide duties / Supervisor
outstanding from 24 April. must check before depositing.

Problem 2 Delayed payments. Post-dated Purchase goods according to


cheques; R15 750 (30 Oct 2020) resources available; schedule / plan
and R6 750 (30 May 2020) purchases (budget) 6
Accept the same advice if appropriate / relevant to both problems identified, such as 8Division of duties9.
2.3 DEBTORS' AGE ANALYSIS
2.3.1 Explain how the debtors' age analysis will assist the business in managing
debtors' more effectively.
Valid explanation part marks for incomplete / unclear answers
 Helps the business to identify slow or defaulting debtors, or possible bad debts
 Highlights debtors in good standing so that their credit rating can be reviewed
 It can expose the problem of allowing debtors to exceed their credit limit
 Exposes weaknesses in internal control processes so that corrective measures 2
can be taken.

2.3.2 Explain TWO separate problems highlighted by the age analysis.


Provide evidence for EACH.
Evidence must be shown. May be in explanation column; Accept name or explanation or amount.
Any TWO of:
Explanation   Evidence  
Certain debtors are exceeding D Duma, S Swart
Problem 1 the credit terms (slow payers) 90 days ; 60/90 days
possible bad debts (1 425) (6 000; 12 750)
Debtors are exceeding credit P Palm: 20% above limit
limit R1 050 / (R6 300 – R5 250)

Problem 2 Granting slow-paying debtors to D Duma, S Swart


continue purchasing / to exceed
credit limits (internal control) 4

2.3.3 State TWO strategies that Tonga Hardware can use to ensure that only
reliable applicants are granted credit.
Any TWO valid strategies TWO different options form the list:
Perform credit checks (references / listing / credit bureau)
Check employment history / salary advice / bank statement
Contact details (residential or postal address / contact numbers or emails)
2

TOTAL MARKS
45

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Accounting 6 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 3

3.1 3.1.1 First in first out  FIFO

3.1.2 Weighted average method  WA

3.1.3 Specific identification method  SI / SIM Accept abbreviations 3

3.2 JJ FASHION HOUSE

3.2.1 Calculate: Value of the closing stock using the weighted-average


method
Workings Answer

1 858 200 two marks


(124 500 + 1 813 000) (130 x 610)
1 937 500  – 79 300  x 380  216 600
3 390 –130  one part correct
(240 + 3 150)
3 260 two marks

WA: 570 four marks 6


Calculate: Gross profit
Workings Answer
see above see above
2 764 800  – (1 858 200 – 216 600)
1 937 500 – 79 300
1 641 600 two marks 1 123 200
one part correct
IF UNITS ARE USED: (960 – 570) x 2 880
one mark one mmark one mark
4

3.2.2 Calculate how long (in days) it will take to sell the closing stock of
the jeans.
Workings Answer
see 3.2.1
216 600  x 365 
1 641 600 
see 3.2.1 (COS)
48,2 days 
OR: IF UNITS ARE USED one part correct

one mark one mark one mark


380 x 365 OR 380
2 880 2 880 / 365
one mark one mark one mark 4

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Accounting 7 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

3.2.3 Calculate: Value of closing stock using the FIFO method


Workings Answer
400 – 130
270  x 610  = 164 700 one part correct 228 500 
110 x 580  = 63 800 one part correct one part correct
380 – 270 see above 7
State ONE advantage of using the FIFO method.
Any ONE point  part marks for incomplete / unclear / partial responses

 Higher gross profit because of higher closing stock value / lower cost of sales
 Purchase price of jeans is always increasing due to demand / inflation
 Stock valued at the most recent prices; less chance of being obsolete / outdated
 Gross profit will be based on current market related values
 Easier to use this method. 2

3.2.4 Calculate the number of jackets stolen.


Workings Answer
(1 760 + 6 500)
8 260  – 2 980 – 5 020  260 
one part correct
OR – 8 260 + 2 980 + 5 020
4
Give TWO solutions to solve the problem.
Any TWO valid points   part marks for incomplete / unclear / partial responses
Expected responses for 2 marks:
 Count stock regularly and compare against stock records
Solution 1  Improve / employ security to control at exit points
 Install security cameras at strategic points (CCTV)
 Order smaller quantities, but more frequently as required
 Staff screening / lockers for staff (if they are suspected)
Solution 2
 Tracking devices / security tags on products
 Insure goods so that you can claim on insurance policy 4

3.2.5 The internal auditor is concerned about the stock levels and selling price of
jackets. Explain reasons for his concern, with figures, and give different advice
in EACH case. Be alert to advice that may apply to both, such as 8reduce mark-up%=
Concern Explanation (with figures) Advice
     
Stock holding period increased from (103 Clearance sale to get rid of
days) to 216 days (by 113 days) / high excess stock / Order in line
Stock level closing stock balance 2 980 (1 220 more with demand
than opening stock / 36% of available
stock; possible obsolescence or theft
Mark-up % increased (from 70%) to Reduce mark-up% / selling
107% (to R1 450 or by R380) price / Offer trade discounts /
Selling price Advertise to increase
Customers find the price of
R1 450 as being too high customers 6
.
TOTAL MARKS
40

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Accounting 8 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 4

4.1 Workings Answer


(i) Cost of land and buildings at beginning of year
R10 500 000
9 650 000 + 850 000 
Award one mark if this working is shown without the final answer given
(ii) Depreciation of vehicles for the year
New:
625 000 x 20% x 3/12 = 31 250  one part correct R287 450 
one part correct
Old:
1 281 000 x 20% = 256 200  one part correct
(iii) Disposal of equipment
(6 000 x 15% x 6/12)
R5 550 
one part correct
21 000  – (15 000  + 450 ) one part correct
15 450 three marks
(iv) Accumulated depreciation of equipment
R227 000 
200 000 + 42 450 – 15 450  see (iii) above one part correct
16
(iii) and (iv) accept as workings: Ledger format; signs reversed; brackets

4.2 ORDINARY SHARE CAPITAL:

ISSUED SHARE CAPITAL

800 000 Shares in issue at beginning 4 800 000


400 000  shares issued during year 3 600 000 
balancing figure

(60 000) shares re-purchased (ASP: R7.00 ) (420 000) 

1 140 000 * shares in issue at end


closing number of shares x R7.00
7 980 000 *
7
-1 P if no details (max -1) *one part correct
RETAINED INCOME:

Balance at beginning 1 181 250


Net profit after tax 2 534 400
Shares re-purchased 60 000  x R3,80  ignore brackets
(228 000) *
OR 648 000 – 420 000 10,80 – 7,00
Dividends ignore brackets
(2 377 200) 
operation

Interim 1 200 000  x 124 cents  or 124% or x 1,24 or 124/100 1 488 000 *
Final 889 200

Balance at end operation;


1 110 450 
shares repurchased and OSD must be subtracted 8
*one part correct

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Accounting 9 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

4.3 BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)


ON 31 MARCH 2020

ASSETS
Non-current assets 11 458 500
Fixed assets at carrying value 11 458 500
Current assets TA – 11 458 500 2 715 750 

Inventories balancing figure 1 303 850 


Trade and other receivables 957 900 *
(881 000  + 2 500  + 41 900 + 32 500) 7

Cash and cash equivalents 454 000

TOTAL ASSETS 11
14 174 250 
See Total Equity + Liabilities

EQUITY AND LIABILITIES


Ordinary shareholders' equity OSC + RI 9 090 450 
Ordinary share capital see 4.2 OSC 7 980 000 
Retained income 3
1 110 450 
see 4.2 RI

Non-current liabilities 2 382 000


Mortgage loan: 642 000 two marks – 258 000 one mark
2 382 000 *
(2 508 000  + 258 000  – 384 000) 6

Current liabilities 2 701 800 *


Trade and other payables* could include other CL items
1 415 000 *
(1 318 000  + 32 000  + 65 000)
Shareholders for dividends see 4.2 889 200 

SARS: Income tax (985 600 – 972 000 ) # 13 600 *

Current portion of loan see NCL above 384 000 

TOTAL EQUITY AND LIABILITIES 14


14 174 250 
SE + NCL + CL
*one part correct 34
-1 foreign items (max -2); misplaced items: mark workings only. -1 Presentation (no details) max -1
# SARS: Income tax could be a DR (CA) if Income tax incorrectly calculated

TOTAL MARKS
65

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Accounting 10 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 5

5.1 5.1.1 External 


5.1.2 Directors 
5.1.3 Balance Sheet 
5.1.4 Cash Flow Statement  4

5.2 BOMBAY LTD

CASH FLOW STATEMENT FOR YEAR ENDED 29 FEBRUARY 2020

CASH EFFECTS OF OPERATING ACTIVITIES


Cash generated from operations
Interest paid
Income tax paid
Dividends paid 121 000 two marks
4 126 000  + 286 000  – 165 000  OR (247 000) *
– 126 000 – 286 000 + 165 000
Accept other arrangements for calculations eg: brackets ; ledger account
CASH EFFECTS OF INVESTING ACTIVITIES
Fixed assets purchased
5 4 830 000 + 34 500  + 312 600  – 3 760 100  OR (1 417 000) *
– 4 830 000 – 34 500 – 312 600 + 3 760 100
Accept other arrangements for calculations eg: brackets ; ledger account

1 Proceeds from the sale of fixed assets 34 500 


Change in fixed deposit
CASH EFFECTS OF FINANCING ACTIVITIES
1 Proceeds from shares issued 1 240 000 
Repurchase of shares
5 880 000  – 1 240 000  – 5 360 000  – 96 000  OR
5 – 5 880 000 + 1 240 000 + 5 360 000 + 96 000 (816 000) *
OR 120 000 one mark x 6,80 three marks
Accept other arrangements for calculations eg: brackets ; ledger account

2 Change in loan 1 300 000 – 950 000 (350 000) 


one mark if 350 000 with no brackets

NET CHANGE IN CASH AND CASH EQUIVALENTS (82 700) 


operation (from bottom)
Cash and cash equivalents (opening balance) 56 400 
4 Cash and cash equivalents (closing balance) (26 300)  22
– 28 800 + 2 500 one part correct

* one part correct and must be in brackets / if no brackets, full marks for workings
If inappropriate use of brackets, or not, full marks cannot be earned on that line.

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Accounting 11 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

5.2.2 Calculate: % operating profit on sales


Workings Answer
1 122 500  x 100 23,3% 
one part correct; accept 23%
4 824 000  express as %; sign not necessary 3
Calculate: Acid-test ratio
(NOTE: The current ratio is 1,6 : 1.)
Workings Answer
774 000 x 1,6 two marks
0,8 : 1 
(1 238 400  – 619 000) : 774 000  one part correct
619 400 three marks as x : 1 5
Calculate: Net asset value (NAV) per share
Workings Answer
6 422 800 two marks
(5 880 000  + 542 800 ) x 100 655,4 cents 
980 000  one part correct one part correct or 655 cents
(900 000 + 200 000 – 120 000) accept R6,55 5
Note: The 100 is not regarded as 8one part correct9 for the method mark

5.3 TWO COMPANIES: LULU LTD AND COCO LTD

5.3.1 Explain which company has the better liquidity. Quote TWO financial
indicators to support your opinion.
Part marks for incomplete / unclear / partial explanation

Explanation and Financial Indicators for Lulu:

Liquidity ratios of Lulu Ltd  are more efficient  than that of Coco Ltd.
Current ratio 1,7 : 1 
Acid test ratio 0,9 : 1 
OR

Explanation and Financial Indicators for Coco:

Liquidity ratios of Coco Ltd one mark are higher / they have more CA one mark
Coco has more liquid assets than stock (0,6 : 1 compared to 0,8 : 1 in Lulu)
Current ratio 4,2 : 1 one mark
Acid test ratio 3,6 : 1 one mark 4

5.3.2 Comment on the earnings per share and the % return on equity of
Lulu Ltd. Give TWO reasons why the shareholders will be satisfied with
these indicators. Quote figures.

Financial indicators with figures and trend   Explanation 

EPS increased (from 233 cents) to 273 cents (by 40 cents / 17,2%)
ROSHE increased (from 14%) to 25% (by 11% / 78,6%)

This exceeds the returns on alternative investments (such as interest on fixed


deposits which is 6%).
5

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Accounting 12 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

5.3.3 Comment on the market value of the shares in Coco Ltd. Explain TWO
points. Quote figures.
TWO valid points.  Figures 

 Compare to NAV: Market value of R18,80 is higher than the NAV of


R17,86 (by 0,94). Indicates good demand for the shares / positive image of
the company / company is doing well.
 Compare to purchase price: He originally bought the shares for R28,00
but the market price is now R18,80 (indicates poor financial return) 4

5.3.4 Compare the dividend pay-out rates of both companies and explain why
the directors of EACH company decided on these pay-out rates. Quote
figures or calculations.

Lulu Ltd: 110c (DPS)/273 cents(EPS) or 40,3% 


They retained 59,7% of the EPS for future growth / expansion 
OR This is to benefit shareholders through the NAV and share price

Coco Ltd: 200c (DPS)/171 cents (EPS) or 117% 


They decided to keep shareholders happy / reward shareholders for low
dividends in previous years / have no plans for growth 
Be alert to different presentation of information. 4

5.3.5 Noah says that the dividend of 110 cents per share he earned from
Lulu Ltd is better than the dividend of 200 cents per share from
Coco Ltd. Give ONE point to prove that he is incorrect. Quote figures or
calculations.

ONE explanation / comparison (with figures)


No marks for individual / random amounts stated.

200 cents – 110 cents = 90 cents more per share was earned in Coco Ltd.
   

OR: He earned 90 cents more per share in Coco Ltd. four marks

Also be alert to learners who commented in the following way to prove Noah is correct:
In Lulu Ltd, he earned 110c on a share which cost him 700c (16%) two marks
In Coco Ltd, he earned 200 cents on a share which cost him 2 800c (7%) two marks
OR:
In total he earned dividends of R440 000 from Lulu Ltd, and R200 000 from Coco Ltd four marks
4

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Accounting 13 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

5.3.6 Comment on the risk and gearing of EACH company. Quote TWO
financial indicators.

THREE marks per company: Financial Indicator with figure and Comment
Accept the correct figures (if financial indicators are not mentioned)

Lulu Ltd:
Debt/equity ratio is 0,8 : 1 
ROTCE is 20% 
Comment 
The business makes extensive use of loans (high risk) /
ROTCE is higher than the interest rate of 13%, indicating positive gearing
Coco Ltd:
Debt/equity ratio is 0,2 : 1 
ROTCE is 10% 
Comment 
The business does not rely on loans (low risk) /
ROTCE is lower than interest rate of 13%, indicating negative gearing
Arrangement of information may vary; financial indicators and/or comment may be compared in the same statement 6

5.3.7 Noah wants to buy shares in Lulu Ltd on the JSE at current market value
to become the majority shareholder and CEO. Calculate how much Noah
will have to pay for the shares that he needs.
Workings
1 100 000 / 2 + 1
(550 001  – 400 000  ) x R9,50  = R1 425 009,50  one part correct
150 001 two marks

OR 50% + 100
(550 100 – 400 000) x R9,50 = R1 425 950
150 100
OR 51%
(561 000 – 400 000) x R9,50 = R1 529 500
161 000

OR 14% x 1 100 000 or 15% or 13,7%

154 000 x R9,50 = R1 463 000


4

TOTAL MARKS
70

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Accounting 14 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

QUESTION 6
6.1 6.1.1 False 
6.1.2 True 
6.1.3 True  Accept T or F 3

6.2 KURUMAN (PTY) LTD


6.2.1 Calculate the missing amounts indicated by (i) and (ii) in the Debtors'
Collection Schedule.
Workings Answer
(i) 41 250 x 38/100 15 675 
one part correct

16 530 x 100/38
43 500 
(ii) OR 25 056 x 100/60 x 100/96 one part correct

OR 130 500 x 25/75 4

Calculate the percentage discount allowed to debtors who settle in the


month of the sales transactions.
Workings Answer
990 three marks
41 250 x 60%
24 750  – 23 760  x 100 4% 
24 750  one part correct
OR: July: June: as a %,
1 152 1 044 sign not necessary
(28 800 – 27 648) (26 100 – 25 056)
28 800 26 100 5

6.2.2 Calculate budgeted amounts:


Workings Answer
48 000  + 144 000  192 000
Total sales
OR 48 000 x 100/25 one part correct
for July 2020
OR 144 000 x 100/75
3

123 750 + 41 250 / 41 250 x 100/25 / 123 750 x 100/75


Payment to 165 000  x 100/150 x 80% 88 000
one part correct
creditors during
June 2020 OR 22 000 x 80/20 4
one mark two marks

(7 500 – 6 000)
1 500 x 100/20  x 12
Additional loan OR 1 500 x 12 / 20% 90 000
one mark one mark one mark one part correct
to be acquired
on 1 June 2020 OR 450 000 – 360 000
two marks one mark 4
Be aware of alternative ways to calculate this figure 11

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Accounting 15 DBE/November 2020
NSC 2019/MEO 2019/SC – Marking Guidelines

6.2.3 The directors did not adhere to the Cash Budget during May 2020.
Identify TWO overpayments. Provide figures. Give a valid reason for
EACH overpayment.
Overpayment (with figures) Reason
Advertising  Wanted to increase sales  OR
Paid R8 400 or R2 800 more Special clearance sales
Point 1
than budgeted or 50% over the required greater advertising.
budget 
Vehicle maintenance  To get a reasonable price when
Paid R36 350 or R24 150 more vehicle was sold / in order to
than the budgeted or 198% over use vehicle until replaced  OR
Point 2
the budget  Vehicles are old or damaged
OR used more frequently for
free deliveries to increase sales 6

6.2.4 Why are the auditors concerned that the agreement with Tradecor is
unethical or possibly a crime? Explain THREE points.

Any THREE valid concerns    part marks for incomplete / unclear / partial responses
 The property was sold at carrying value (which is its original
Point 1 cost / historical cost concept)
 Property appreciates in value and should be have been sold at
a market-related price.
Point 2  The company could have benefitted from a large profit on sale
of asset and an improved profitability.
 Total assets are depleted / valuable asset disposed
 Corruption / under-handed / unethical deal to enrich CEO and
Point 3 his wife (nepotism); no transparency or involvement of the
Board of Directors in this decision
Other  Consciously placing the business at financial risk / cash flow
valid problems due to rent of R26 000 per month that must be paid
answers and not budgeted for. 6
# the same point (concern) can be stated differently / repeated.
Award marks for appropriate responses not included in the list above.

TOTAL MARKS
35

TOTAL: 300

Copyright reserved

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