GRADE 8 ECONOMIC MANAGEMENT SCIENCES

YEAR-END EXAMINATION
8 NOVEMBER 2010 MARKS: 170
EXAMINER: MRS U DUROW TIME: 2 hours
MODERATOR: MRS R BOUWER
INSTRUCTIONS:

1. This paper consists of 11 pages.

2. Please check that your question paper is complete.
3. Read the questions carefully.
4. Answer the questions on the answer booklet supplied.
5. It is in your interest to write legibly and present your work neatly.
6. You may NOT use green or red ink. You may use a pencil, but please use a soft, dark pencil.
7. Try to keep to the time allocation suggested below.

TOPIC Learning MARK TIME

Outcome AVAILABLE

1 Cash Journals LO 3 30 21

2 Accounting equation LO 3 24 17

3 Wages & salaries LO 3 26 18

4 Employment legislation LO 3 12 9

5 Trade Unions LO 1 20 14

6 Savings & investment LO 2 52 37

7 Inflation LO 1 6 4

TOTALS 170 120 MINUTES

Grade 8 Economic Management Science Final Examination 2010 Page 1

QUESTION 1 CASH JOURNALS (30 marks; 21minutes)

LO 3 Managerial, consumer and financial knowledge and skills

AS 9 Complete cash transactions in the books of a retail business.

Record the following transactions in the Cash Journals of FERTIG’s Stores.

All the columns have been drawn up for you. Note the business uses a 50% mark-up on cost.
Transactions for November 2010

3 Bought the following from Taylor Stores and paid by cheque no. 66
● goods, R1 750
● stationery, R300

4 Bought a computer for R10 000 from Cutler Traders and paid by cheque.

6 Cash sales, R1 800 as per cash register roll.

Received a cheque from A. Tenant for rent for the last quarter. Rent amounts to R45 000 per
annum. Receipt 25 was issued.

9 Paid CC Potgieter Traders, R10 000 for the rent of the building

10 Cashed a cheque for the following :

● vehicle expenses, R550

15 Cash sales of merchandise costing, R4 500 as per cash register roll.

16 Sent a cheque to Telkom to pay the telephone account, R950, of which R200 was for the
owners’ personal telephone.

22 Paid for the repairs done on the businesses deliver vehicle, R 1 200 at Toyota Co.

25 The owner Mr Fertig increased his capital contribution from R200 000 to R250 000.

Grade 8 Economic Management Science Final Examination 2010 Page 2

QUESTION 2 ACCOUNTING EQUATION (24 marks; 17 minutes)

LO 3 Managerial, consumer and financial knowledge and skills

AS 8 Differentiate between financial concepts used in business

Record the following transaction in the table provided to show the effect of the accounting
equation:

Transactions:

1. Bought stationery by cheque, R244

2. Bought a vehicle from Muller & Son on credit, R60 000

3. Paid the rates and taxes account, R450

4. Received R760 for services rendered

5. Paid Muller & Son the first instalment of R5 000

6. Bought equipment from Bouwer Traders and paid by cheque, R2 000.

Grade 8 Economic Management Science Final Examination 2010 Page 3

QUESTION 3 WAGES AND SALARIES (26 marks; 18
minutes)
LO 3: Managerial , consumer and Financial Knowledge and skills
As 1 Describe the levels, categories, remuneration and responsibilities of jobs (calculations)

Study the TWO pay slips below and answer the questions that follow:

Hot Dog Palace Enterprises

Employee: Mr C Harebottle
Employee no: 044
Pay period: 01/10/2010 – 08/10/2010
Cheque no; 9347
EARNINGS R
Description Hrs Amount
Basic 40 2 320,00
Overtime 8 696,00
DEDUCTIONS
UIF 30,16
NMP Medical Fund 70,00
Sanlam Pension Fund 68,67
FI Employees’ Union 40,00
Tax 542,88
TOTAL DEDUCTIONS 751,71
NET PAY 2 264,29

The Banana Breadbox

101 Berry Road
Cape Town

Employee name Identity no. Employee no. Period

Ms B Khumalo 8510100040076 96009 30/10/2010
EARNINGS DEDUCTIONS
Description Amount Description Amount
Basic salary 5 000,00 PAYE Tax 1 673,45
Overtime 1 350,87 MX Health 415,25
Petrol allowance 320,00 Liblife Pension Fund 375
Social Fund 20,00
UIF 50,00
GROSS SALARY 6 670,87 TOTAL DEDUCTIONS 2 533,70
NET PAY 4 137,17

Grade 8 Economic Management Science Final Examination 2010 Page 4

 3.1 What is the name of Mr Harebottle’s employer? (1)

3.2 How much did Ms Khumalo earn before deductions? (1)

3.3 What is Mr Harebottle’s normal wage per hour? (2)

3.4 What is Mr Harebottle’s overtime wage per hour? (2)

3.5 List Ms Khumalo’s deductions and briefly explain them. (10)

3.6 What pay period does Mr Harebottle’s cheque cover? (1)

3.7 Does Mr Harebottle earn a salary or a wage? Explain your answer. (2)

3.8 How much is Ms Khumalo’s take-home pay? (1)

3.9 Mr Harebottle’s payslip shows a deduction for FI Employees’ Union.

What is the purpose of trade unions? (2)

3.10 To which Government department is tax money paid? (1)

3.11 On what amount is tax usually calculated? (1)

3.12 What additional benefit is Ms Khumalo receiving from her employer? (1)

3.13 What does the acronym PAYE stand for? (1)

Grade 8 Economic Management Science Final Examination 2010 Page 5

 Kgosietsile More has
recently started working for
a new employer, Mr Ryan
Peter, as a bookkeeper
assistant. When he started
working there, Mr Peter
informed him that he would
not be getting an
employment contract
because he did not want to
burden him with paperwork.
It was agreed that
Kgosietsile would work five
days a week from 7am to
5pm, with lunch from 1pm
to 1.25pm.
QUESTION 4 EMPLOYMENT LEGISLATION
(12 marks; 9 minutes)
LO 3: Managerial , consumer and Financial Knowledge and skills
AS 2 Research the laws affecting the basic conditions of employment and non-
discrimination in the workplace
Read the following paragraph and answer the question
that follows.
Now answer the following question:
Mr Peter is treating Kgosietsile unfairly and is breaking a number of
employment laws. Explain SIX ways in which Mr Peter is breaking the
law according to the Basic Conditions of Employment Act.

Mr Peter pays Kgosietsile

an hourly wage of R60.
Sometimes he requires him
to work overtime, and he
pays him R80 per hour for
her overtime. Because there
is often quite a lot of work
that needs to be done, Mr
Peter sometimes asks
Kgosietsile to bring his 13-
year-old daughter, Tanya, to
assist with the filing. He
pays Kgosietsile an hourly
wage of R40 for this
additional work. Mr Peter
deducts 1% off Kgosietsile’s
gross wage each week and
pays it over to the
Unemployment Insurance
Fund.

Kgosietsile is allowed to
take two weeks’ leave per
year according to the
agreement. Mr Peter has
made him sign a letter
stating that he will never
become a member of a
Trade Union while under his
employment. He has also
required him to undergo an
HIV/AIDS test as well as an
Grade 8 Economic Management Science Final Examination 2010 Page 6
IQ test, saying that his wage
will be adjusted based on
the results of these tests.
QUESTION 5 TRADE UNIONS (20marks; 14 minutes)

Read the articles and answer the following questions:

Teachers union warns of strike

Jul 28, 2010 10:30 AM | By Sapa

The SA ………….. Union (Sadtu) will embark on strike action if the government does
not improve its wage offer within the next seven days, officials say.

SADTU President Thobile Ntola

Photograph by: Tyrone Arthur

There's still an opportunity to avert the strike... I think we are challenging the government,” Sadtu
president Thobile Ntola told reporters in Johannesburg.

He said the national executive committee of Sadtu decided at a meeting on Tuesday that its 245,000
members would embark on a strike within seven days – unless a new offer acceptable to teachers was
made.

The state was offering a 6.5 percent increase and a housing subsidy of R620 per month.

The union was demanding an 8.6 percent increase and a R1000 housing subsidy.

“The union will be serving a notice to the employer today wherein the employer has seven days to better
the offer in order to avert the strike,” said general secretary Mugwena Maluleke.

http://www.timeslive.co.za/business/article573677.ece/Teachers-union-warns-of-strike
[Downloaded: 26 October 2010]

5.1 What is the full name of the union? (1)

5.2 Which industry does it represent? (1)

Grade 8 Economic Management Science Final Examination 2010 Page 7

 5.3 What is the dispute about? (2)

5.4 What can SADTU do about this problem? (2)

5.5 What is the difference between a boycott and a strike? (2)

5.6 Do you agree with the trade union’s decision to strike? Give a reason for
your answer. (3)

5.7 Name 3 main trade union federations in South Africa. (3)

5.8 Name and discuss THREE ways in which the CCMA can reduce

industrial relations conflict. (6)

QUESTION 6 SAVINGS AND INVESTMENT (52 marks; 37

minutes)

LO 2 Sustainable growth and development

AS 8 Discuss the importance of savings for investment
AS 9 Explain the role of savings and investment in economic prosperity and growth
LO 3 Managerial, consumer & financial knowledge and skills
AS 8 Investigate the various methods of savings and investment

6.1 Give TWO reasons why it is important to save and invest money. (4)

6.2 What is the main difference between saving money in a “piggy bank” container and a bank
account. (2)

6.3 Look at the following example of how compound and simple interest has been calculated.
R1 000 has been deposited with into a savings account with the post office (B) and another R1
000 has been deposited with a
registered bank (A).

A B
COMPOUND INTEREST SIMPLE INTEREST
R 1 000 R 1 000
@ 12% p.a Interest @ 12% p.a interest
over 3 years over 3 year
-end of year 1 R1120,00 -end of year R1 120,00
-end of year 2 R1254,40 -end of year 2 R1240,00
-end of year 3 R ? -end of year 3 R ?

6.3.1 What is the essential difference between the TWO types of interest? (2)

6.3.2 Calculate the value of your savings at the end of year 3 according to compound interest as per
example. (3)
Grade 8 Economic Management Science Final Examination 2010 Page 8
6.3.3 Calculate the total value of your savings at the end of year 3 according to simple interest as per
example. (3)

6.4. Read the article “Gordhan reins in banks” and answer the questions that follow:

Gordhan reins in banks According to Gordhan, the banks had ………..

agreed to implement 19 of 28
recommendations made by the Standard Bank said the meeting came
Finance minister promises changes in at the culmination of many years of
banking inquiry panel of the
how banks deal with customers
Competition Commission. detailed research on market

Jun 1, 2010 10:53 PM | By ZWELI

"Fees charged must be lower than they
MOKGATA
are, whether for low-income or high-
income accounts," said Gordhan.

Finance Minister ……….. has promised "Debit-order cancellations must be

that big changes in the way banks
treat their customers are on the way,
following a meeting with banking
bosses…..
He told the media in Pretoria that the
talks would lead to lower costs for
consumers and increased competition
between banks.
"The banking sector has done
extremely well during the financial
crisis because we've had an excellent
regulatory system compared to those
countries that were worst affected."
made easy. Banks should detail ATM
charges and be transparent on how
much is exactly involved. If you want
to switch from one bank to another, all
the factors that make this switching
difficult must be made easy."
Gordhan said other recommendations
made by the Competition Commission conditions, consumer behaviour, and
would continue to be discussed. international trends and best practice.
- Additional reporting by I-Net Bridge
"We've crossed an important
and Sapa
milestone, but this is not the end of
this process, but only the beginning.

Coovadia said the meeting between Banks will have to detail ATM
He said that, despite the recent Greek
Gordhan and the banks was a step in charges and exactly how much
long-term debt crisis that has
the right direction because it would is involved in transactions
threatened world financial institutions,
make banking more efficient and Picture: PETER MOGAKI
South Africa was "fairly sound" - but
transparent. Source:
that he would be watching
http://www.timeslive.co.za/business/a
developments.
The most contentious issue was the rticle482712.ece/Gordhan-reins-in-
Present at the meeting on Monday imposition by banks of penalty fees. banks[Downloaded: 26 October 2010
were chief executives and chairmen
Coovadia said that most banks were
from Absa, Standard Bank, First
cutting such charges for lower-income
National Bank, Nedbank, Investec,
customers to R15. ………..
African Bank and Capitec.

6.4.1 Identify FOUR services banks charge their customers for. (4)

6.4.2 How are some banks more competitive than others? (2)

6.4.3 What do you think would happen, if everyone who has money saved in their bank accounts,
decided to draw it all out on the same day? Explain. (4)

6.4.4 Who is the Minister of Finances? (2)

Grade 8 Economic Management Science Final Examination 2010 Page 9
6.4.5 If a bank accept R120 000 from someone who deposits this money with the bank for 1
year and pays him 12% p.a interest, how much will the bank earn, if it lends the same
money to someone else at 21% p.a interest. (Show your calculations).
(4)

6.4.6 Who is the Governor of the SA Reserve Bank? (2)

6.4.7 Name TWO functions of the SA Reserve Bank. (4)

6.4.8 What is the current prime lending rate p.a on home loans? (1)

6.4.9 Define the term “repo rate”? (2)

6.5 Read the share data below and answer the questions that follow:

Name Code Close High Low DM YM% DY PE DV

ABSA ASA 13314 13606 13314 -91 3.4 3.3 12.4 792597
CAPITEX CPI 14990 15000 14900 -10 141.8 1.6 23.0 19524
FIRSTRAN FSR 2038 2095 2028 -27 15.9 3.8 11.3 10842271
D
NEDBANK NED 13300 13600 13206 -194 6.1 3.3 13.1 846189
STANDAR SBK 10550 10646 10470 +19 5.7 3.7 13.0 3706965
D
The Star, Business report, Tuesday, October 26 2010

6.5.1 Calculate the close share price of the following shares on 25 October 2010
(a) ABSA (2)
(b) Standard Bank (2)

6.5.2 Which share has doubled in value since 26 October 2009?

Give a reason for your answer. (3)

6.5.3 How many of each of the following shares can an investor with
R100 000 buy?
(a) Capitex (2)
(b) Firstrand (2)

6.5.4 Calculate the spread of Nedbank share. (2)

Grade 8 Economic Management Science Final Examination 2010 Page 10

QUESTION 7 INFLATION (6 marks; 4 minutes)

LO 1 The economic cycle

AS 8 Explain what inflation is and discuss reasons for changes in inflation rates

“The government continually adjusts the price of petrol. Adjustments are usually an increase in the
petrol price. This will affect inflation.”

7.1 Give one possible cause for the increase in the price of petrol. (2)

7.2 What will happen to the price of goods and services if the price of

petrol increases? (2)

7.3 How will the rising prices of petrol affect the purchasing power of
consumers? (2)

Grade 8 Economic Management Science Final Examination 2010 Page 11