GRADE 12

NATIONAL SENIOR CERTIFICATE

ACCOUNTING PAPER 1
JUNE 2024
MARKING GUIDELINES
MARKS: 150
MARKING PRINCIPLES:
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 correct answer. If answer is incorrect, mark workings.
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. 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. 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, marker must inspect reasonableness of answer.
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. Note that one comment
could contain different aspects.
14. Codes: f = foreign item; p = placement/presentation.
This marking guideline consists of 10 pages.

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 Gr 12 Accounting P1 2 Limpopo DoE/June 2024
Marking Guidelines

QUESTION 1
1.1 LANGA LTD
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
29 FEBRUARY 2024.
Sales 3 150 000 x
160 8 400 000 ✓*
60

Cost of sales Sales - GP (5 250 000) 

Gross profit 3 3 150 000
Other income operation 84 000 
Commission income 12 000
7 400 one mark + 2 700 one mark 72 000 *
Rent income (61 900 ✓ + 10 100 ✓✓)
Gross income operation 6 3 234 000 
Operating expenses Operating profit - GI (2 016 000) 
Salaries and wages 824 000
Depreciation 216 500
Sundry expenses balancing figure 283 000 
one mark two marks
36
622 800 *
Directors fees (605 500 ✓+ 17 300 ✓✓) OR (605 500 x 35)

Audit fees (29 000 ✓+ 14 500 ✓) OR (29 000 x 2)

3 43 500 *

Trading stock deficit 24 200 ✓✓

Provision for bad debts adjustment 13 2 000✓✓
Operating profit 14,5% of sales 1 218 000 
Interest income NP before interest expense - OP 75 500 
Net profit before interest expense 1 293 500 
Operation NP before tax + interest expense
Interest expense (53 500) ✓✓

Net profit before tax 396 800x

100 1 240 000 ✓
32

Income tax (396 800)

Net profit after tax income tax must be subtracted 10 843 200 ✓
32
*operation and one part correct

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 Gr 12 Accounting P1 3 Limpopo DoE/June 2024
Marking Guidelines

1.2 RETAINED INCOME

Balance on 1 March 2023 674 500
Net profit after tax see 1.1 843 200 
R4,15 – R3,20 (237 500) *
Repurchase of shares (250 000 ✓ x 0,95 ) Do not accept 1 037 500
OR 800 000
Ordinary share dividends (720 000) *
Interim dividends 420 000 ✓
Final dividends (1 200 000 ✓ x 25 cents ✓) 300 000 *
Balance on 29 February 2024 560 200
 operation, one part correct. 9

1.3 EQUITY AND LIABILITIES SECTION OF STATEMENT OF FINANCIAL POSITION

SHAREHOLDERS’ EQUITY 3 600 200
Ordinary share capital Shareholders’ Equity – Retained income 3 040 000 
Retained income 560 200

NON-CURRENT LIABILITIES 3 989 800 – 3 600 200 389 600 ✓

one mark one mark 389 600
Loan: Gold Bank (487 000 ✓- 97 400 ✓) OR (487 000 x 80%)

CURRENT LIABILITIES 861 200 *

Trade and other payables 427 000 *
(395 200 ✓ + 17 300  + 14 500 
Directors’ fees Audit fees
Shareholders for dividends 300 000 
Can be part of T&OP see 1.2
SARS: income tax (396 800 – 360 000) 36 800 ✓✓
Can be part of T&OP
Short-term loan see NCL above 97 400 

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 4 851 000 *

*Operation, one part correct 14

TOTAL MARKS
55

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 Gr 12 Accounting P1 4 Limpopo DoE/June 2024
Marking Guidelines

QUESTION 2
2.1 2.1.1 B ✓ Statement of Financial Position
2.1.2 A ✓ Directors Report
2.1.3 D ✓ Statement of Comprehensive Income
2.1.4 E ✓ Audit Report
2.1.5 C ✓ Cash Flow Statement
5

2.2 CHARLOTTE LTD

CASH FLOW STATEMENT FOR THE YEAR ENDED 29 FEBRUARY 2024
NOTE: Figures are NOT required in the shaded areas.
CASH EFFECTS OF OPERATING ACTIVITIES
Cash generated from operations
Interest paid
Income tax paid
4 Dividends paid 121 000 two marks (247 000) *
126 000 ✓ + 286 000 ✓ - 165 000✓ OR
-126 000 – 286 000 + 165 000
Accept other arrangements for calculations eg: brackets; ledger account
CASH EFFECTS OF INVESTING ACTIVITIES
5 Fixed assets purchased
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 of sale of fixed assets 34 500 ✓
Change in fixed deposit
CASH EFFECTS OF FINANCING ACTIVITIES
1 Proceeds of shares issued 1 240 000 ✓
Repurchase of shares
5 5 880 000 ✓ - 1 240 000 ✓ - 5 360 000 ✓ - 96 000 ✓ OR (816 000) *
-5 880 000 + 1 240 000 + 5 360 000 + 96 000
OR 120 000 one mark x 6,80 three marks OR 720 000 +96 000
Accept other arrangements for calculations eg: brackets; ledger account
2 Change in loan 1 300 000 – 950 000 (350 000) ✓✓
no part marks; one mark if 350 000 with no brackets

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

Operation (from bottom up)
Cash and cash equivalents (opening balance) 56 400 ✓
Cash and cash equivalents (closing balance) (26 300) ✓
4 -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 22

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 Gr 12 Accounting P1 5 Limpopo DoE/June 2024
Marking Guidelines

2.2.2 Calculate the following financial indicators on 29 February 2024:

Calculate: % operating profit on sales

1 122 500 ✓ x 100

4 824 000 ✓

= 23,3% 
one part correct; accept 23%
express as %; sign not necessary
3

Calculate: Acid-test ratio

NOTE: The current ratio is 1,6 : 1.

774 000 x 1,6 two marks

(1 238 400 ✓✓ – 619 000 ✓) : 774 000 ✓

= 0,8 : 1 

one part correct; as x : 1

Calculate: Net asset value (NAV) per share

6 422 800 two marks

(5 880 000 ✓ + 542 800 ✓)
980 000 ✓ one part correct
(900 000 + 200 000 – 120 000)

= 655,4 cents 
one part correct; accept 655 cents or R6,55

5
*Note: The 100 is not regarded as “one part correct” for the method mark.

TOTAL MARKS
40

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 Gr 12 Accounting P1 6 Limpopo DoE/June 2024
Marking Guidelines

QUESTION 3
3.1.1 Comment on the solvency of the company. Quote ONE financial indicator
with figures.
Financial indicator ✓ figure/s ✓ Comment ✓

The degree of solvency (Total assets: Total Liabilities) has declined from 5,0:1 to
2,0:1 (by 3,0:1). Although the solvency has declined (trend not good), the
business is still solvent. 3

3.1.2 Explain why the directors of Fungisani Ltd are satisfied with the change in
the company's liquidity. Quote TWO financial indicators with figures.
Financial indicator ✓ ✓ figures with explanation ✓ ✓

• Acid test ratio is now more efficient at 0,8:1 whereas it was too high at 2.6:1 in
2023. / more productive use of liquid assets (working capital)
• Stock turnover rate has improved from 3 times to 6 times indicating that stock
is being sold more quickly. 4

3.2.1 Refer to the market price per share. Many people feel that the market
price of the share on the JSE indicates whether the directors are
doing a good job or not.
Explain why the market price is so important in this regard.

Any ONE explanation. ✓✓

• If the market price of the share is more than the NAV of the share, it
means investors are willing to pay more for the share than it is worth.
• It shows that the shareholders have confidence in directors/company.
2

3.2.2 On 1 March 2023, additional shares were issued at R3,00 each. Quote
and explain relevant indicators with figures to show why the existing
shareholders will be satisfied with this price.
Indicator: Must compare NAV with issue price (one mark) AND Market price with issue
price (one mark)
Figure and trend: one mark each Comment: two marks

The issue price of R 3 is higher than the Market Price of 240 cents (by 60
cents). ✓✓
The issue price of R 3 is higher than the NAV of 210 cents (by 90 cents).
✓✓
Comment:
Investors will have to pay extra for the shares. The shares are in demand
and the company has a good image. ✓✓
6

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 Gr 12 Accounting P1 7 Limpopo DoE/June 2024
Marking Guidelines

3.3 Rather than issue more shares, the directors are considering taking out
additional loans. Quote TWO relevant financial indicators to support their
opinion.
Financial indicator ✓✓ Figures and trend ✓✓ Comment
✓✓

Debt-Equity ratio remains constant at 0,1:1

There is a very low risk.

ROTCE increased from 25,6% to 44,3%.

It is more than the interest on loan of 13%, the company is positively geared. 6

3.4.1 If the company issued all its unissued shares the following year, how
much capital could it expect to raise for the company?
Provide a calculation. Note that the authorised share capital
comprises 1 000 000 ordinary shares.
The shares will be issued at 10% more than the current market price.

Unissued shares: 1 000 000 – 762 500 = 237 500 ✓✓

Price: 2,40 x 110% (1,10) = 2,40 + 0,24 =2,64 ✓✓

Receive: 237 500 x 2,64 = 627 000 * one part correct

5

3.4.2 Peggy M, one of the shareholders, is currently the owner of 400 000
shares. What will happen to her shareholding if all the unissued
shares are issued? Show calculations to support your answer.

400 000 ✓
Current: x 100 = 52,5% * one part correct
762 500 ✓

400 000 ✓
After: x 100 = 40,0%  *one part correct
1 000 000 ✓

Peggy will no longer be the majority shareholder ✓✓

8

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Gr 12 Accounting P1 8 Limpopo DoE/June 2024
Marking Guidelines

3.5.1 One of the directors feels that the dividend pay-out rate (%) should
have remained constant. Give ONE reason (with figures) to support
this opinion.

One valid reason ✓✓ part-marks for partial explanations figure/s ✓

• If the DPR remained constant, the company would have been able to
retain 50% of EPS (instead of 33%); to focus on the long-term growth of
the company.

• A drop in EPS (from 96 cents) to 72 cents (by 24 cents / 25%) and an

unchanged DPS at 48 cents has effectively increased the dividend
payout rate from 50% to 67% (by 17%).

• A constant dividend payout rate of 50% would have resulted in a lower

DPS of 36 cents (by 12 cents / 25%) in line with the drop in EPS.
3

3.5.2 Explain (with figures) why one of the shareholders, Thabiso, feels that
the dividends he earns in Fungisani Ltd are not as good as those he
earns in Sikedi Ltd.

One valid reason ✓✓ part marks for partial explanations Figure/s ✓

• The price per share at Fungisani Ltd is more than double the price at
Sikedi Ltd (820 cents against 400 cents)
Thabiso received 36 cents per share at Fungisani Ltd and 28 cents
at Sikedi Ltd. He expects the DPS at Fungisani Ltd to be more than
double the amount he received at Sikedi Ltd (i.e. over 56 cents)

• Received DPS of 36c on an investment of 820c;

(dividend yield of 4,4%) in Fungisane Ltd.
Received DPS of 28c on an investment of 400c;
(dividend yield of 7%) in Sikedi Ltd.
3

TOTAL MARKS
40

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 Gr 12 Accounting P1 9 Limpopo DoE/June 2024
Marking Guidelines

QUESTION 4

4.1 A company board of directors has different committees with different

functions. Choose the function in COLUMN B that matches the committee in
COLUMN A. Write only the letter (A – D) next to the question numbers (4.1.1 to
4.1.4) in the ANSWER BOOK.

4.1.1 D✓
4.1.2 C✓
4.1.3 A✓
4.1.4 B✓ 4

4.2 Who is the audit report addressed to? Give a reason for your answer.

The shareholders. ✓

They are the owners of the company and have appointed the auditors. ✓ 2

4.3.1 Identify the type of audit report issued by the auditor.

Provide ONE reason for your answer.

Unqualified report ✓

One valid point ✓✓ part marks for partial/incomplete/unclear responses.

The auditors did not find any problems with information on the financial
statements / they “present fairly” the financial position of the company / it is
a clean (good) report “in all material respects”. 3

4.3.2 Explain the impact of such a report on the image of the company.
State ONE point.

One valid point ✓✓ part marks for partial/incomplete/unclear responses.

• This will impact positively on the share price/demand for shares.

• Potential investors would be interested in buying shares.
• Directors appointed are reliable; shareholders are confident in their
ability to continue good governance.
• Employees and other role players would recognize that good internal
controls are employed and continue to maintain this. 2

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 Gr 12 Accounting P1 10 Limpopo DoE/June 2024
Marking Guidelines

4.4 Mention possible implications for the Municipal Manager should he accept
this offer. Explain TWO points.

Two valid and different points. ✓✓ ✓✓part marks for partial/incomplete/unclear responses.
Be aware of alternative valid responses.

• Face a disciplinary hearing for engaging in an unethical transaction.

• Can be criminally charged for accepting a bribe.
• Lose his position as a Municipal Manager – seen as unreliable /untrustworthy.
• Compromise his integrity and lose the trust of the community. 4

TOTAL MARKS
15

TOTAL 150 MARKS

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