GAUTENG DEPARTMENT OF EDUCATION

PROVINCIAL EXAMINATION
NOVEMBER 2020
GRADE 11

ACCOUNTING
PAPER 1

MARKING GUIDELINES

14 pages

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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 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 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. Where penalties are applied, the marks for that section of the question cannot be a
final negative.
8. ‘Operation’ means check operation. ‘One part correct’ means operation and one part
correct. Note: ‘check operation’ must be +, -, x, - as per memo.
9. ‘One part correct’ means operation and one part correct. Where method marks are
awarded for one part correct, the marker must inspect the reasonableness of the
answer and at least one part must be correct before awarding the mark. If a figure
has earned a method-mark, this will be regarded as ‘one part correct’.
10. In calculations, do not award marks for workings if numerator and denominator are
swapped – this also applies to ratios.
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 a case do not award a method-mark.
Indicate with a .
12. Be aware of candidates who provide valid alternatives beyond the marking
guideline.
13. Codes: f = foreign item; p = placement/presentation.

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

QUESTION 1: FINANCIAL STATEMENTS (55 marks; 42 minutes)

Golden Gate Traders

Statement of Comprehensive Income (Income Statement) for the year ending 30
June 2020

Sales (337 600√ – 1600√) 336 000

Cost of Sales (Award 3 marks if =sales + 4000 /1.6) (212 500) √√ 
Gross Profit 123 500 
Other operating income 18 687 
Rent income (17 836 – 1 456 √ √ ) 16 380
Discount received (600 – 100 √) 500
Trading stock surplus 437 √ √
Bad debts recovered 1 370 √
Gross operating income 142 187 
Other operating expenses (136 587) 
Repairs 1 618
Bad debts 1510
Telephone (2 350 + 230 √ ) 2 580
Rates 2 850
Insurance (4 120 - 1 000 √ √ ) 3 120
Packing materials (13 500 x 80%) 10800√√
Water and electricity 4 830
Salaries (78 000 + 4 200 √ ) 82 200
U.I.F. contributions (3 120 + 42 √ + 42 √ ) 3 204
Provision for bad debts adjustment 400 √
Depreciation 23 475√
Operating Profit 5600 
Interest income (1 125 + 375 √ √ ) 1 500
Profit before Interest Expenses 7 100 
Interest expenses (6 000) √ 
Net Profit for the Year 1 100 

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

Golden Gate Traders

Notes to Financial Statements as at 30 June 2020

1.2.1 Trade and other receivables

Trade debtors (31 900 - 1 600 √ + 1 370√ ) 31 670

Provision for bad debts(550 + 400) (950) √
Net trade debtors 30 720
Prepaid expenses (must be same as Insurance adjustment) 1 000 
Accrued income (must be same as Interest income adjustment) 375 
32 095

1.2.2 Trade and other payables

Trade creditors (21 363 + 2 000√) 23 363 √

Income received in advance (must be same as Rent adjustment) 1 456 
Accrued expenses (must be same as Telephone adjustment) 230√
Creditors for salaries (4 200 - 840 -150 - 42) 3 168 √
SARS : PAYE 840 √
Medical aid fund 150 √
U.I.F. (42 √ + 42 √ ) 84
29 291

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

Calculations:

Cost of sales:

336 000 + 4000 /11/160 = 212500

Trading stock deficit/surplus:

42563 +1000 – 44 000 = 437

Rent income:

15 600 / 12 x 7 = 9 100
15 600 + 12 % = 17 472 / 12 x 5 = 7 280
9 100 + 7 280 = 16 380 – 17 836 = - 1 456

Interest on fixed deposit:

10 000 x 15 % = 1 500 /12 x 3 = 375

10 000 x 15 % = 1 500 – 1 125 = 375

Interest on loan:

18 000 + 48 000 = 66 000 - 60 000 = 6 000

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

QUESTION 2: PARTNERSHIPS (40 marks; 32 minutes)

2.1 TRUE or FALSE

Number Answer
2.1.1 False
2.1.2 False
2.1.3 True
2.1.4 False
2.1.5 False

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2.2 Mighty Mouse Traders
Notes to Financial Statements as at 28 February 2020

Current Accounts

Mighty Mouse Total

Net profit as per Income Statement 61 200 79 800 141 000

Partners’ salaries 54 400 √ √ 78 000 √

Interest on capital 13 000 √ √ 8 000 √
Primary distribution of profit 67 400 86 000
Final distribution of profit/loss (6 200)  (6 200) 

Drawings for the year (20 300) √ √ (5 800) √ √

Retained income for the year 40 900 74 000
Balance at beginning of year (4 800) √ 6 200 √

Balance at end of year 36 100 80 200 116 300

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

Calculations for drawings: Mighty Calculations for drawings: Mouse

20 000 - 700 + 1 000 = 20 300 6 800 – 1 000 = 5 800

Calculation for salaries: Mighty Calculation for salaries: Mouse

49 600 = 11 months
4 + 7 (1,2)
12,4

49 600 = 4000
12,4

4 000 + 20 % = 4 800

49 600 + 4 800
= 54 400

Calculations for interest on capital: Calculations for interest on capital: Mouse

Mighty
100 000 x 8 % = 8 000
100 000 x 8 % = 8 000

100 000 x 10 % = 10 000 / 12 x 6 = 5 000

8 000 + 5 000 = 13 000

Calculations for share of remaining profit/loss:

141 000 – 132 400 – 21 000 = (12 400)

(12 400 / 2 = (6 200)

Ratio: Each had R100 000 capital at beginning of year. So ratio is 1 : 1

Calculation for Total Current Assets using the given Current Ratio:

CA : CL

??? : 67 250

1,2 : 1

67 250 x 1,2 = 80 700

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

Calculation for Trade and other Receivables using given Acid Test Ratio:

Receivables + Cash : CL

??? + 11 500 : 67 250

0,5 : 1

67 250 x 0,5 = 33 625 – 11 500 = 22 125

Calculation for Total Non-Current Liabilities using given Debt-Equity Ratio:

NCL : OE

??? : 416 300

1,5 : 416 300

416 300 x 1,5 = 624 450

Calculation for missing Inventories figure:

:
80 700 – 22 125 – 11 500 = 47 075

Calculation for missing Fixed Assets figure:

1 108 000 – 80 700 = 1 027 300 – 20 000 = 1 007 300

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

2.3 Mighty Mouse Traders

Statement of Financial Position (Balance Sheet) as at 28 February 2020

ASSETS
NON-CURRENT ASSETS 1 027 300 
Fixed assets 1 007 300 
Financial assets
Fixed deposit : Giant Bank (10 000 – 10 000) 0
Fixed Deposit : Small Bank (20 000) 20 000 √
CURRENT ASSETS (must be CL x 1,2) 80 700 
Inventories 47 075 
Trade and other receivables (must be CL x 0,5 – cash) 22 125 
Cash and cash equivalents (500 + 1 000 + 10 000) 11 500 √ 
Total assets (must be same as total equity and liabilities) 1 108 000 

EQUITY AND LIABILITIES

OWNERS’ EQUITY 416 300 
Capital (200 000 + 100 000) 300 000 √ √
Current accounts (must come from 2.2) 116 300 
NON-CURRENT LIABILITIES (must be OE x 1,5) 624 450 
Loan : Giant Bank ( ??? – 5 000) 624 450
CURRENT LIABILITIES 67 250 
Trade and other payables (45 050 + 1 200) 46 250 √
Bank overdraft (12 200 + 5 000 – 1 200) 16 000 √ 
Short term loan 5 000 √ 
Total equity and liabilities 1 108 000 

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

QUESTION 3: ANALYSIS AND INTERPRETATION (20 marks; 16 minutes)

3.1 Calculate King Ben’s percentage earnings for the year ended
31 December 2020. Does he have reason to be satisfied? Give ONE
reason for your answer.

Earnings of Ben x 100

Average equity of Ben

165 000 + 60 000 + (37 100 / 2 √) x 100

(505 562 + 597 012) / 2 √

165 000 √ + 60 000 √ + 18 550  x 100

551 287 √

243 550 x 100

551 287

44,1 % 

Satisfied √ / Not satisfied

Reason:

His earnings of 34,2 % is above what he could earn on an outside investment

like a fixed deposit, which currently earns about 5% interest. √ √

(Any other reasonable answer) (10)

3.2 Calculate the debt-equity ratio on 31 December 2020.

Calculation:

250 000 √ : 1 038 154 √

0,2 : 1  (3)

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

3.3 The partners are considering taking up an additional R200 000 loan at an
interest rate of 12% per annum.
Do you think this is a good idea? Refer to ONE financial indicator and to
gearing to motivate your answer with figures

Good idea √

Motivation:

Debt-Equity ratio  improved from 0,3 : 1 to 0,2 : 1 √

Business is lowly geared, has more own than foreign capital.

(Any other reasonable answer) (3)

3.4 Comment on the liquidity position of the business. Refer to TWO financial
indicators for 2020 to motivate your answer.

Financial indicator 1:
Current ratio decreased from 1,7 : 1 to 1,4 : 1 √√

Financial indicator 2:
Acid test ratio decreased from 1,2 : 1 to 0,8 :1 √√

1 mark for each ratio

1 mark for each trend with figures. (4)

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

QUESTION 4: ASSET MANAGEMENT & INTERNAL CONTROL

(35 marks; 30 minutes)

4.1 Ethics

Number Answer
4.1.1 E√
4.1.2 F√
4.1.3 A√
4.1.4 D√
4.1.5 C√ 5

4.2 Accounting Equations

Owners’
Number Account debited Account credited Assets Liabilities
equity
Example Bank Capital : Barack 0 + 50 000 - 50 000

4.2.1 Drawings : Barack √ Bank √ 0 - √ 8 000 + √ 8 000

4.2.2 Drawings : Michelle √ Trading stock √ - √ 800 - √ 800 0

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

4.3 Asset Management

4.3.1 If all vehicles are depreciated using the same method, what is the rate
of depreciation used by the business?

Calculations:

47 500 / 6 x 12 = 95 000

95 000 √
x 100
380 000 √

= 25 %  (3)

4.3.2 It was decided to sell Vehicle 2 (see fixed asset register) as it was
costing too much in repairs and maintenance.

Complete the asset register page to calculate the vehicle’s book value
on the date it was sold. (Round off to the nearest rand when doing all
depreciation amounts.)

Movement
Accumulated Carrying
Date Cost price Depreciation
depreciation value
28 February 2018 380 000 47 500 47 500 332 500
28 February 2019 380 000 83 125 130 625 249 375
28 February 2020 380 000 62 344 192 969 187 031
31 May 2020 380 000 11 689 204 658 175 342

Calculations:

February 2020:

249 375 √ x 25 %  = 62 344 + 130 625√ = 192 969 ;

380 000 – 192 969 = 187 031 

May 2020:

187 031  x 25 % = 46 758 / 12 x 3  = 11 689 + 192 969 

= 204 658
380 000 – 204 658  = 175 342 

Accept : 46 757,75 / 46 757 11 689,44 / 11 689,25 / 11 689,50 (10)

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 ACCOUNTING
MEMORANDUM PAPER 1 GRADE 11

4.4 Problem solving

Accounting Made Easy

Branch Problem√ with figures √ Solution √

School is not full. Get more learners by

Place for another advertising more. √
Daveyton
60 learners. √√

Too many learners. Reduce the number of

There are 40 more than learners. √
Actonville
there should be. √√ Get more educators.

School is not full. Advertise the school. √

There is no advertising. Get a cheaper premises.
Rent is very high, Take control of expenses.
Farramere
R12 000.
Not charging learners
R120 √√

(For all the above accept any other reasonable answers.)

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TOTAL: 150

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