Accounting P2 Prep Sept 2021 Memo Eng

Accounting P2 1 FS/September 2021
Grade 12 Prep. Exam. Marking Guidelines
PREPARATORY EXAMINATION
GRADE 12
ACCOUNTING P2
SEPTEMBER 2021
MARKS: 150
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 foreign item 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 the 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. 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 before awarding the mark.
10. Operation means Check operation. One part correct means Operation & one part correct.
11. In awarding method marks, ensure that candidates do not get full marks for any item that is
incorrect at least in part. In such cases, do not award the method mark. Indicate by way of
.
12. Be aware that some candidates provide valid alternatives beyond the memorandum.
13. Codes: f = foreign item; p = placement/presentation.
Copyright reserved Please turn over

These marking guidelines consists of 12 pages.

QUESTION 1:
1.1 CONCEPTS
3
1.1.
True 
1
1.1.
True 
2
1.1.
False 
3
1.2 CREDITORS RECONCILIATION
1.2.1 Explain the purpose of preparing a creditors reconciliation.

Provide TWO points.
Any TWO points   part marks for partial correct answers
An internal control measure to ensure that all payments, returns,

and discounts are deducted, and that all invoices charged are
legit.
4
To reconcile all entries between ledger and statement, and to be
in agreeance.
1.2.2 Creditors Ledger Creditors Reconciliation

42 794 46 820
A. (67 + 67)

– 134
B. 
+ 110
C. 
+ 1 600
D. 
– 4 000
E. 
– 1 350
F. (2 840 + 160)
one mark one mark 
– 3 000
41 420  both 41 420 9


1.2.3 Refer to Information D.
Provide a possible reason why the EFT issued on 28 August

2021 does not appear on the statement received from Big
Music.
Any ONE acceptable reason 
 Statement prepared for delivery on 28 August 2021 (time
delay).
 They have not updated records/with internet/do not have SMS
facilities to receive notification
 Big Music did not get a notification of the payment/proof of
payment.
 Sophia never added a reference to the payment for allocation
to Seb's Sound Clinic's account. 2
 Big Music waits for the bank statement and then record the
EFT's.
1.3 DEBTORS AGE ANALYSIS
1.3.1 Name ONE debtor whose credit limit can be increased.

Motivate your answer.
L Lindiwe  abides to credit terms and definitely needs an

increase in limit (good payer; track record) 
OR
2
R Ras is the only debtor sticking to credit terms of 30 days and
underspent his limit.
1.3.2 Provide ONE reason to show that Sophia struggles to

manage debtors effectively. Quote figures or evidence. Give
ONE suggestion to assist her in addressing the problem
identified.
Any ONE reasons with figures/evidence 
Credit limit:
L Lindiwe limit R13 000 spent R18 400 (R5 400 overspend)
P Pillay limit R36 500 spent R44 500 (R8 000 overspend)
Credit term:
R32 360 is overdue OR 41% is overdue
P Pillay by R21 060/M Montso by R11 300
Any ONE acceptable suggestions 
If a debtor reached his credit limit, the account must be blocked/frozen

until a payment was made.

If a debtor is in arrears with his debts (not sticking to credit terms), he

should be charged with interest as per contract.
Frequent reminders and notices must be sent to debtors, followed by 4

personal phone calls.
1.3.3 Explain TWO consequences for the business, besides the
money they could lose through bad debts, if debtors are not
managed properly.
Any TWO acceptable consequences   part marks for partial correct

answers
 Cash flow problems/creditors must be paid/replacement of

stock.
 Debt collectors will also take a portion of money collected; 4
therefore, the business will not receive the full amount owed.
 The collection process is time consuming, which can add extra
cash flow pressure/added administrative duties.
1.4 VALUE ADDED TAX (VAT)

1.4.1 Calculate the VAT amount payable to SARS on
31 August 2021.
Mark one line only. Cannot mix signs. Inspect candidates' responses. Award highest
mark.
43 800 – 1 200 = 42 600 three marks
+12 540 + 43 800 – 29 700 + 3 150 – 1 200 + 450 – 1 320

      
= 27 720  One part correct
OR
– 43 800 + 1 200 = – 42 600 three marks
– 12 540 – 43 800 + 29 700 – 3 150 + 1 200– 450 + 1 320 = – 27 720
- 1 R45 000 for including Salaries and Wages
Items marked * may be shown on the opposite side in brackets.
VAT CONTROL VAT CONTROL
ü 29 700 ü 12 540 ü 12 540 ü 29 700
ü *1 200 üü 43 800 üü 43 800 ü *1 200
üü *1 320 ü *3 150 ü *3 150 üü *1 320
ü *450 ü *450
þ 27 720 . . þ 27 720
59 940 59 940 59 940 59 940 10
1.4.2 The owner suggested that the bookkeeper must not record goods
taken by the owner as drawings. Instead, he says she could record
it as a donation to a hospital. What advice would you offer him?
Provide ONE point.
Any ONE acceptable explanation/advice 
 Adjusting any figures is illegal and unethical. (Evasion of tax.)

 VAT will be illegally understated if it is regarded as a donation (i.e., at no
selling price).
 Do not engage in altering any figures, because you as bookkeeper will be

kept responsible.
 Do not Decrease output VAT to claim back from money due to SARS as
this is fraud and will tarnish the image of the business.
 Keep detailed and correct VAT records in case of tax audits – the owner
2
must bear the VAT on the drawings as he has taken the goods for himself.
TOTAL MARKS
40
QUESTION 2
2.1 CONCEPTS
Accept understandable abbreviations
2.1.1 assets 
2.1.2 first-in-first-out/FIFO 
2.1.3 periodic  3
2.2 QUALITY PRINTERS & INK (PTY) LTD
PRINTERS:
2.2.1 Calculate the value of the closing stock on 31 August 2021

using the specific identification method.
40 + 120 – 130 190 – 150 200 – 110
(30 x 26 200) + (40 x 29 300) + (90 x 33 100)
786 000 * + 1 172 000 * + 2 979 000 *
= 4 937 000  one part correct
OR
OS +P – COS = CS
one mark one mark four marks one method mark
1 048 000 + 15 331 000 – 11 442 000 = 4 937 000
3 406 000 + 4 395 000 + 3 641 000 7
2.2.2 Identify which model of printer is not selling as well as Mark

has expected. Quote figures or calculations to support your
answer.
Model  Figure  Suggestions 
5
 The Digi OZ model is selling more slowly.
 The sold 110 of 200 (55%) in 12 months = average of 9 per

month
OR
 But there are 90 on hand – these will take 9 months to sell
Provide two suggestions to solve this problem.

 Reduce the mark-up%

 Order fewer quantities

 Advertise more/cash discount/promotions

INK CARTRIDGES:
2.2.3 Calculate the value of the closing stock on 31 August 2021
using the weighted-average method.
969 960 three marks
986 460 two marks (20 x 825) two marks
243 210  + 743 250  – 16 500 
(300 + 900 – 20) 
1 180 two marks
six marks
= R822 x 130 = R106 860  one part correct; must x130 7
2.2.4 Mark wants to know how long it should take to sell the
closing stock of cartridges. Provide figures or a calculation
to assess this.
106 860 x 365 days = 45,2 days accept 45 days
969 960 – 106 860
863 100
130  x 365 days  = 46 days 

1 032 
Explain if Mark should be satisfied with this time period or not . 
Yes, the stock is selling quickly OR
No, he might run out of stock. 6
2.2.5 Mark suspects that ink cartridges are being stolen from the
shop despite security cameras being installed. Provide a
calculation to verify his suspicion.
(300 + 900 – 20)

1 180  – 1 032  – 130  = 18 missing  One part correct
One part correct
5
Provide TWO internal control measures that Mark Lex can
use to improve the control of stock.
Any TWO valid points of advice  
Expected responses:
 Do regular physical stock counts.
 Place security coded tags on the packaging.
 Provide secure display cabinets for the stock.
 Improve security at the doors/inspect items and compare
with sales slips (CRTs).
 Division of duties (if staff is suspected).
 Buy in smaller quantities/more regularly. 2
TOTAL MARKS
35


QUESTION 3:
3.1 BLITZ ENERGY DRINKS
3.1. FACTORY OVERHEADS COST NOTE

1
Indirect labour 88 000 + 10 560 98 560 

Indirect material (4 200 + 44 200 – 1 800) x 60% OR 3/5 27 960 
Depreciation of factory machinery 119 570
Insurance 78 600 – 17 100 61 500 
Rent (34 100  + 3 410 ) x 319/29  412 610 *
* one part correct 720 200 *
12
3.1. Production Cost Statement for the year ended 31 May 2021.
2
Direct material cost PC – DLC 894 800 

Direct labour cost 515 500 
Prime cost 1 410 300
Factory overhead cost see 3.1.1 720 200 
Total manufacturing cost 2 130 500 
Work in progress in the beginning 69 500
2 200 000
Work in progress at the end of the year (100 000) 
The total cost of production (350 000 x 6) 2 100 000 
7
3.1. Abridged Income Statement (Statement of Comprehensive

3 Income) for the year ended 31 May 2021.
Sales 4 118 800
Cost of Sales 4 118 800 x 100/200 (2 059 400) 
Gross Profit 2 059 400 
Operating Expenses (859 400) 
Administration Cost balancing
241 580 
figure
Selling and Distribution Cost 4 118 800 x
617 820 
15%
Net profit for the year 1 200 000 7

3.2 NICK-LED LIGHTING

3.2.1 Nick was confused that the fixed cost only increased by R3
600, although production increased by 12 000 units. How
would you explain this to him? Provide ONE point.
Provide ONE valid point  explaining economies of scale
Economies of scale:
 An increase in production decreased fixed costs per unit due
to fixed cost not being influenced by the number of units
produced.
 Unit cost decreased because of the increase in the number of
units produced. (Fixed costs divided by more units, must decrease
FC/unit.)
2
3.2. Variable cost:

2
Provide TWO reasons for the change in the direct material

cost per unit.
TWO reasons listed  
 Supporting cheaper suppliers/bulk discounts received

 Low demand caused prices to drop
 Able to get the material locally (reduce transport cost)
 Better control in production (less wastage) / Better supervision
2
Explain TWO control measures that the business can

implement to ensure better control over the direct labour cost
per unit.
TWO internal control measures  
 Train workers if they lack proper skills

 Increase the supervision
 Pay them per completed unit.
 Do not allow unnecessary overtime.
 Set targets to be completed
 Division of duties – supervisors
Do not except extra workers 2
Explain whether the selling and distribution cost have been

well controlled or not. Quote figures.
Explanation  figures (with comparison) 

4

 Selling and distribution is well controlled because more has

resulted in an increase in sales.
 Increased from R1,60 to R1,80 per unit (12,5%), units
produced and sold increased by 12 000 units (by 16%)
3.2.3 Nick was pleased with the increase in the level of

production.
Explain to Nick why he should NOT be pleased. Provide
TWO points. Quote figures.
Explain TWO reasons  Quote figures 
 The business failed to meet the break-even point,

(88 582 – 87 000)/1 582 units and therefore made a loss this
year.
 BEP increased from 58 537 – 88 582 OR by 30 045 units.
 Selling at a loss in 2021

(Selling price R14,50 and Total cost R14,55 OR by R0,05).
 Contribution to the BEP decreased from R4,10 to

R2,75/R1,35 or by 32,9%. 4
TOTAL MARKS
40

QUESTION 4
4.1 Explain why a cash budget is considered to be a useful

management tool.
Accept any reasonable answer  part-mark for unclear/incomplete answer
Management will use it for planning their cash flow, determining

what the bank balance will be./It also alerts them to the need to cut
down payment or to either take out a loan, invest more capital or
apply for an overdraft facility. 2
4.2 CREDITORS PAYMENT SCHEDULE

CREDIT
MONTH AUG 2021 SEPT 2021 OCT 2021
PURCHASES
JULY 64 000 * 48 640 12 800
AUG 65 200 49 552 13 040 *
SEPT 82 000 62 320*
TOTAL PAYMENT 62 352 75 360 *
6
4.3 Calculate the following:
WORKINGS ANSWER
A Actual closing Bank balance:
August 2021
(1 385 180 – 1 316 380) 82 200 
68 800 + 13 400 one part correct
B Room rentals: October 2021

510 000 x 2 765 000 
1 020 000  x 75% one part correct
C Restaurant sales: September 2021
206 000 x 125% 257 500 

No part marks
D Salaries: September 2021
451 200 x 100/120 376 000 

one part correct
E Salaries: October 2021
(D)  x 108% 406 080  11

376 000 If x1,08

4.4 The total electricity expense for the financial year ended
August 2021 was R720 000. The accountant anticipates that
the total for the following financial year to increase to
R800 000. Provide TWO suggestions that Tom can implement
to save electricity.
Any TWO valid suggestions  
 Switch to gas stoves in the restaurant.

 Replace all globes with LED/energy saving globes.
 Install solar panels for the geysers in the rooms.
 Let the guests buy tokens to switch on the air conditioning. 2
4.5 Tom compared the August budget to the actual amounts

received or paid in August 2021.
Comment on
Compare Laundry costs to Room rentals Valid explanation 
the causes &
variances of Figures/calculations 
laundry costs Maximum 1 mark if only commented on laundry costs and
and whether figure
this has been
well controlled  Laundry costs were R3 000 (3%) over budget/under
or not. spend
 Room rentals were R102 000 (10,5%) over budgeted
Quote figures or
 Laundry costs were not well controlled/should have
calculations. also been 10,5% under budget
Comment on Compare Restaurant supplies to sales Valid explanation 

the causes &
variances of Figures / calculations 
restaurant Maximum 1 mark if only commented on Restaurant supplies
supplies and and figure
 
whether this
 Restaurant sales were R292 000 (141,7%) over the
has been well budget
controlled or  Restaurant supplies were R110 000 (36%) over
not. budget
Quote figures or  Restaurant costs were well controlled/more

calculations. customers created more economies of scale in
purchase of supplies 8

4. Tom is concerned about the cash flow of the hotel each month.
6 Note that the interest rate on bank overdraft facilities is
currently 14% p.a. while the interest rate on loans is 9% p.a.
Calculate the expected overdraft in September 2021.
785 500 – 925 200 – 56 400 = 83 300  no part marks
2
Explain why it may be a better idea for Tom to apply for a bank
overdraft (at an interest rate of 14% p.a.) rather than to take out
a loan (at 9% p.a.).
Explanation  part-mark for unclear/incomplete answer
The interest on overdraft is calculated on the monthly amount used

(current liability) and can be easily managed, when deposits are
made. The loan is generally a long term liability and interest over a
longer period will have to be paid. (Could be more strain on cash
resources.)
2
Provide TWO ideas or suggestions that Tom can implement to
improve the cash flow over the coming holiday period.
Any TWO valid suggestions  
Have special rates during December and January for families

to stay in the hotel.
Advertise family Christmas parties or end-of-year business

parties in the restaurant.
Organise a vacation program with activities for children at the pool

while parents make use of the restaurant.
2
TOTAL MARKS
35 TOTAL: 150

Accounting P2 Prep Sept 2021 Memo Eng

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Accounting P2 1 FS/September 2021

Grade 12 Prep. Exam. Marking Guidelines

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These marking guidelines consists of 12 pages.

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1.2 CREDITORS RECONCILIATION

1.2.1 Explain the purpose of preparing a creditors reconciliation.

Any TWO points   part marks for partial correct answers

An internal control measure to ensure that all payments, returns,

1.2.2 Creditors Ledger Creditors Reconciliation

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1.2.3 Refer to Information D.

Provide a possible reason why the EFT issued on 28 August

1.3 DEBTORS AGE ANALYSIS

1.3.1 Name ONE debtor whose credit limit can be increased.

L Lindiwe  abides to credit terms and definitely needs an

1.3.2 Provide ONE reason to show that Sophia struggles to

Any ONE reasons with figures/evidence 

Any ONE acceptable suggestions 

If a debtor reached his credit limit, the account must be blocked/frozen

Copyright reserved Please turn over

If a debtor is in arrears with his debts (not sticking to credit terms), he

Frequent reminders and notices must be sent to debtors, followed by 4

Any TWO acceptable consequences   part marks for partial correct

 Cash flow problems/creditors must be paid/replacement of

1.4 VALUE ADDED TAX (VAT)

+12 540 + 43 800 – 29 700 + 3 150 – 1 200 + 450 – 1 320

Any ONE acceptable explanation/advice 

 Adjusting any figures is illegal and unethical. (Evasion of tax.)

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2.2 QUALITY PRINTERS & INK (PTY) LTD

2.2.1 Calculate the value of the closing stock on 31 August 2021

= 4 937 000  one part correct

2.2.2 Identify which model of printer is not selling as well as Mark

 The sold 110 of 200 (55%) in 12 months = average of 9 per

Provide two suggestions to solve this problem.

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 Order fewer quantities

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130  x 365 days  = 46 days 

(300 + 900 – 20)

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3.1 BLITZ ENERGY DRINKS

3.1. FACTORY OVERHEADS COST NOTE

Indirect labour 88 000 + 10 560 98 560 

Direct material cost PC – DLC 894 800 

3.1. Abridged Income Statement (Statement of Comprehensive

Net profit for the year 1 200 000 7

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Provide ONE valid point  explaining economies of scale

3.2. Variable cost:

Provide TWO reasons for the change in the direct material

TWO reasons listed  

 Supporting cheaper suppliers/bulk discounts received

Explain TWO control measures that the business can

TWO internal control measures  

 Train workers if they lack proper skills

Explain whether the selling and distribution cost have been

Explanation  figures (with comparison) 

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 Selling and distribution is well controlled because more has