MARKING GUIDELINE

NATIONAL CERTIFICATE

FINANCIAL ACCOUNTING N5

3 JUNE 2019

This marking guideline consists of 8 pages.

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FINANCIAL ACCOUNTING N5

QUESTION 1

1.1 INCOME STATEMENT OF KZ STORES ON 28 FEBRUARY 2017

Sales – 500 250 000
Less: Cost of sales 22 200
Gross profit 227 800
Plus: Other incomes 7768
Discount received (6 830 – 347) 6483
Bad debts recovered 1 057
Provision for bad debts adjustment 228
Operating incomes 235 568
Less: Operating expenses (269 548)
Municipal expenses 12 302
Telephones and postage 10 160
Stationery – 264 679
Bad debs + 790 (5 962 + 790) 6 752
Interest on loan 17 100
Rent expenses 35 289
Salary: Katsande 96 000
Discount allowed 3 259
Wages 60 000
Insurance 18 400
Provision for discount allowed 345
Trading stock deficit 442
Depreciation (8 200 + 620) 8 820
Net loss  (33 980) (30)

APPROPRIATION STATEMENT
KATSANDE NEGOMASH TOTAL
Interest on capital 6 000 3 000 9 000
Interest on current 1 560 (1090) 470
account
Interest on drawings  (800) (274)  (1 074)
Salary – 80 000 80 000
Employee bonus fund 1 828 1 828
Current account  (82 803)  (41 401)  (124 204)
Net profit 1828 (76 043) 40235 (33 980) (20)

 Principle/method marks

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FINANCIAL ACCOUNTING N5

QUESTION 2

2.1 JOURNAL ENTRIES

2.1.1 DATE DETAILS DEBIT CREDIT

5/01/2017 Purchases 25 000
Creditors control (J Smith) 25 000
Stock purchases on credit
(3)

2.1.2 DATE DETAILS DEBIT CREDIT

17/01/2017 Bank 4 300
Debtors control (S
Swanepoel) 4 300
Debtors paid his account
(3)

2.1.3 DATE DETAILS DEBIT CREDIT

25/01/2017 Debtors control (R Nel) 5 300
Sales 5 300
Stock sold on credit to
debtor
(3)

2.1.4 DATE DETAILS DEBIT CREDIT

28/01/2017 Goods to branch 2 400
Branch adjustment 600
Branch stock 3 000
Stock returned to head office
(4)

2.1.5 DATE DETAILS DEBIT CREDIT

30/01/2017 Branch wages 60 700
Head office bank 60 700
Wages paid by head
office
(3)

(Any relevant narration)

The whole line entry must be correct and the amount must appear
in the correct column.

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FINANCIAL ACCOUNTING N5

2.2 2.2.1 BRANCH STOCK ACCOUNT

Balance b/d 14 700 Goods to branch 8 400
Goods to branch 188 400 Branch bank 76 570
Branch debtors 47 800
Branch 890
adjustment
Branch deficit 52 860
Balance c/d 16 580
203 100 203 100
Balance b/d 16 580
(9)

2.2.2 BRANCH ADJUSTMENT

Balance c/d 8 290 Balance b/d 7 350
Goods to branch 4 200 Goods to branch 94 200
Branch stock (deficit) 52 860
Branch stock 890
Branch profit and loss 35 310

101 550 101 550

Balance b/d 8 290
(7)

2.2.3 BRANCH PETTY CASH

Balance b/d 2 000 Telephone 2 450
Head office 10 Diesel 1 670
700
Donation 3 100
Sundry account 3 880
Balance c/d 1 600
12 700 12 700
Balance b/d 1 600 (8)
[40]

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FINANCIAL ACCOUNTING N5

QUESTION 3

3.1 FIFO METHOD

Date Receipts Issued Balances
Units Totals Units Totals Units Totals Totals
01 50 @ R20. R1 000 R 1000
06 15 @ R20 R300 35 @ R20 R700 R700
08 35 @ R724,5 35 @ R20 R700
R20,70 0
35 @ R724,5 R1 424,50
R20.70 0
09 10 @ R20 R200 25 @ R20 R500
35 @ R724,5 R1 224,50
R20.70 0
14 25 @ R20 R500
5 @ R20,70 R103,50 30 @ R621,0 R621,00
 R20.70 0
21 43 @ R911,6 30 @ R621,0
R21,20 0 R20.70 0
43 @ R911,6 R1 532,60
R21.20 0
24 30 @ R621
R20,70
25 @ R530 18 @ R381,6 R381,60
R21,20 R21,20 0
31 20 @ R592 18 @ R381,6
R29,60 R21,20 0
20 @ R592 R973,60
R29,30 (27)

3.2 3.2.1 Cost price = 100 × SP

100 – Loss
= 100/95 × R805
= R847.37 or 847
Loss = R805 – R847.37
= R42.37 or R42 (5)

3.2.2 Mark-up price = 100 + 25 × 100 × R80 (3)

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FINANCIAL ACCOUNTING N5
100 100 – 8
= 125/100 × 100/92 × R80
= R108,70 

3.2.3 Price code = DOTE/AS (2)

3.2.4 Selling price = CP × 200 

100
= R450 × 200
100
= R900 (3)
[40]

QUESTION 4

General Ledger of Sony Traders for the year ending 31 December 2017.

4.1 DEBTORS CONTROL ACCOUNT

Balance b/d 53 100 Bank 36 200
Sales 28 312 Discount allowed 1 350
Bad debts 1 062
Balance c/d 42 800
Totals 81 412 81 412
Balance b/d 42 800 (15)

4.2 CREDITORS CONTROL ACCOUNT

Bank 14 400 Balance b/d 39 000
Discount received 630 Purchases 8 130
Balance c/d 32 100
Totals 47 130 47 130
Balance b/d 32 100 (12)

4.3 VEHICLE ACCOUNT

Balance b/d 132 000 Assets disposal 29 000
Balance c/d 103 000
132 000 132 000
Balance b/d 103 000 (4)

4.4 ACCUMULATED DEPRECIATION ON VEHICLE

Assets disposal 13 850 Balance b/d 67 200
Balance c/d 53 350
Totals 67 200 67 200
Balance b/d 53 350 (5)

4.5 ASSETS DISPOSAL (4)

Vehicle 29 Accumulated depreciation
000 on vehicle 13 850
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Profit on sale of assets 4 850 Bank 20 000
33 850 33 850
[40]

QUESTION 5

5.1 Acid test ratio:

Current asset – Inventory : Current liabilities

419 500 – 151 200 : 77 000
268 300 : 77 000
3.48:1

Comment: The acceptable ratio is 1 : 1. 3,5 is greater than 1 : 1; therefore, the

liquidity position of the business is very good.

5.2 Average collection period for debtors:

Average debtors × 365
Credit sales
189 400 × 365 (158 000 + 220 800) \ 2
1 188 000
58,19 days

Comment: The collection of debtors obligations is within 60 days. The faster

the money comes in, the better the cash flow.

5.3 Gross profit percentage on turnover:

Gross profit × 100

Turnover

1 775 600 × 100
1 980 000
89,68%

Comment: The business is doing good. See the gross profit percentage of
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FINANCIAL ACCOUNTING N5
89,68% as compared to 70%.

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FINANCIAL ACCOUNTING N5

5.4 Stock turnover rate:

Cost of sales
Average stock
204 400
159 600 (188 000 + 151 200) \ 2
1,28 times

Comment: The stock turnover rate is poor, compared to that of similar

businesses. The rate has weakened, compared to 3 times that of similar
businesses.

5.5 Current ratio:

Current assets : Current liabilities

419 500 : 77 000
5.45 : 1

Comment: According to bank practice, an acceptable ratio is 2 : 1. The

business is doing well, as the 5,45 ratio is above 2 : 1.
(5 × 6) [30]

TOTAL: 200

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