Grade 7 Training manual 2017 EMS: Basic Financial literacy EMS Educators Term 3 TEACHING FINANCIAL LITERACY BETTER TRAINING RESOURCES TO BE USED DURING THE TRAINING National Curriculum Statement: Curriculum and Assessment Policy Statement: EMS Senior Phase Grade 7 – 9 Textbooks as used by the teacher for Grade 7 Laptops / Mobile Phones / Tablets (E-Learning Component) Calculators (Basic calculators and not necessarily scientific calculators) Pen (black and red), pencil, ruler, eraser, scissors, A4 papers, newsprint, Koki pens, flip charts Above All, “Take the attitude of a student. Never too big to ask questions; never know too much to learn something new” … Og Mandino 2 EMS: Basic Financial literacy 2 EMS FRAMEWORK AND BROAD TRAINING OUTCOMES After the completion of these training modules, participants are expected to be able to … MODULE: ONE • • Define basic accounting concepts Explain income and expenses MODULE: TW0 • • Bugets Savings ® Infused into the training outcomes, is the e-learning/e-pedagogy component where teachers will be exposed to ways of implementing and using the digital space to enhance the teaching of EMS 3 EMS: Basic Financial literacy 3 MODULE 1 INTRODUCTION TOT FINANCIAL LITERACY MODULE OUTCOMES Participants will be able to demonstrate and understand: • the basic accountng concepts • income and expenses 4 4 EMS: Basic Financial literacy ECONOMICS AND MANAGEMENT SCIENCES: FINANCIAL LITERACY LESSON PLAN 1: ACCOUNTING CONCEPTS Subject: EMS Grade: 7 Educator(s) Signature: Topic: Accounting concepts Date: HOD Signature: Term: 2 Week: 2- 6 Duration: 5 weeks Prior content knowledge: Link with next lesson: Learners general knowledge Budgets Content: Vocabulary/Important words: Accounting concepts In training manuel Aims and Objectives of the lesson To explain and teach the accounting concepts to the learners. Use examples in practice to bring the theory and practice together. ASSESSMENT STRATEGY: Formal X Informal Form of assessment: Assessment tool: Formal assessments Memo X Evidence of assessment Teacher: Learners TEACHER’S ACTIVITIES: LEARNERS’ ACTIVITIES: Explain concepts Mark each activity with learners Activity 1.1 – 1.7 5 EMS: Basic Financial literacy 5 RESOURCES: Training manuel and text books Teacher’s comments/reflection: HOD input: monitoring and support: 6 6 EMS: Basic Financial literacy IMPORTANT CONCEPTS AND DEFINITIONS CONCEPT CAPITAL DEFINITION Money or other property that the owner invested in his business so that the business can start, for example money he saved, vehicles (eg a truck) or even equipment (eg a computer). ASSETS Property owned by a business that can be converted to cash (money) and that lasts a very long time, for example land and buildings, vehicles, equipment and money (bank). LIABILITIES Money the business owes (debt) to other people or other businesses, eg a bank loan. INCOME Money earned by the business for eg selling products or for the rendering of a service. EXPENSES These are costs that the business incur to be able to do business. It can be payment for services that the business needs or costs when buying items that are used up in the business. The difference between Income and Expenses can either be a Profit or a Loss. PROFIT When income is MORE than expenses. LOSS When expenses are MORE than income. BUDGETS A plan on how planned income is spend. The business plans ahead where to get his income and how to spend it (for eg. expenses). SAVINGS When the business sets aside money (eg in a bank) for future use. BANKING Banks operate in the banking sector. Banks are financial institutions that safeguard the money of businesses or lend money to businesses. TRANSACTION When two parties (buyer and seller) take action. The one buys and the other sells. FINANCIAL Transactions must be recorded daily in the "books" of a business. RECORDS This is called keeping of financial records. 7 EMS: Basic Financial literacy 7 Activity 1.1: Accounting concepts Read the clues on the following page and look for the answers in the following word block.) L F X Q C F I Z M E E J B C J J N F P R O F T R N Q G F I P J O Y J I L I X K I M K E C E E T P F C N C Q E O N G G I A S M G V X N C Z S C O X Q S I N C A S D B L S X M Z E A D U I J Z X Q O K Y A S P C A X H K V R S W X Y L M P H Z I J X K S Z A P Y V V S C Z B R C Y R N W F A B R V E S U O L A P I V E C P V K T H V T S V C Y P B L V Y P C O S B U D G E T S D U U I N I N O M A A O S S Q M X S T D T Y T D A H R E U V S Z M U R F A O P D Q Q Y U M D D W V E X S K B N C H N P D V C B H C D S E Y F G L Y C L J S W O L I J B B S T M G N C R V N E G A E I J X M P O N M A J I B A P L J L Q G O F L I B P K B E N Q E A K I H P F U W B A N S P H B Z F U Q R K C M S E S H Y D X M E E U O M V O O Z L B K X U Y J G I N X U 8 8 EMS: Basic Financial literacy HINTS: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Property owned by a business that can be converted to cash (money) and that lasts a very long time, for example land and buildings, vehicles, equipment and money (bank). Banks operate in the banking sector. Banks are financial institutions that safeguard the money of businesses or lend money to businesses. A plan on how planned income is spend. The business plans ahead where to get his income and how to spend it (for eg expenses). Money or other property that the owner invested in his business so that the business can start, for example money he saved, vehicles (eg a truck) or even equipment (eg a computer). These are costs that the business incur to be able to do business. It can be payment for services that the business needs or costs when buying items that are used up in the business. Transactions must be recorded daily in the "books" of a business. This is called keeping of financial records. Money earned by the business for eg selling products or for the rendering of a service. Money the business owes (debt) to other people or other businesses, eg a bank loan. When expenses are MORE than income. When income is MORE than expenses. When the business sets aside money (eg in a bank) for future use. When two parties (buyer and seller) take action. The one buys and the other sells. Activity 1.2: Accounting concepts Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 14 P. 1 2 3 4 5 6 7 8 9 10 11 12 13 COLUMN A Transactions must be recorded daily. Property owned by a business that can be converted into cash. When expenses are more than income. Money the business owes other businesses. When two parties take action. The one buys and the other sells. The costs that the business incur to be able to run its business. Money earned by the business e.g. for rendering a service. Money or other property that the owner invested in his business so that the business can start. Financial institutions that safeguard and lend out money to businesses. When the business sets aside money for future use. A plan on how to spend planned income. Banks operates in the ... . When income is more that expenses. A B COLUMN B Financial records Transactions C D Budget Income E Banking F Capital G Expenses H Loss I Banking sector J Assets K L M Liabilities Savings Profit 9 EMS: Basic Financial literacy 9 IMPORTANT CONCEPTS AND DEFINITIONS: Formal assessment ANSWER SHEET OF GRADE 20 Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 1.6 G. 1. COLUMN A 1.1 When two parties (buyer and seller) take action. The one buys and the other sells. 1.2 When Expenses are MORE than income. 1.3 These are the costs that the business incur to be able to do business. It can be payment for services that the business needs or costs when buying items that are used up in the business. 1.4 Transactions must be recorded daily in the "books" of a business. This is called keeping of … . 1.5 Money or other property that the owner invested in his business so that the business can start, for example money he saved, vehicles (eg a truck) or even equipment (eg a computer). A COLUMN B Financial records B C Capital Loss D Transactions E F Profit Expenses (5 x 2 = 10) 2. Define the following concepts: 2.1 2.2 2.3 2.4 2.5 Assets Income Liabilities Budget Savings (5 x 2 = 10) TOTAL: 20 10 10 EMS: Basic Financial literacy INCOME AND EXPENSES CONCEPT PERSONAL INCOME PERSONAL EXPENSES STATEMENT OF NET WORTH FINANCIAL WORTH DEFINITION Money that a person earns and uses in his daily live. All the costs that you incur in to live. A statement of your financial worth at a specific period. A person's "wealth" is measured by deducting his liabilities (debt) from his assets (property). [Total Net Worth = Total Assets – Total Liabilities]] SURPLUS When income is more than expenses. DEFICIT When expenses are more than income. WAGES Are paid to a worker at the end of a work week. SALARIES Are paid to a worker at the end of a month. GOVERNMENT Money the government gives to people to help them financially, GRANTS e.g. child support, pension or disability grants. TYPES PERSONAL INCOME PERSONAL EXPENSES Practical examples • • • • • • • • • • Wages or Salaries (money for work done) Interest received (money that you receive for investments) rent income (money you receive for e.g. renting out your house. Government grants Groceries Water Electricity Rent expense Clothing etc 11 EMS: Basic Financial literacy 11 Activity 1.3: Income and Expenses 1 2 R 3 4 5 C 6 7 T 8 9 L S T 10 I 11 S Across: 1. This is an example of a government grant. Down: 10. Are paid to a worker at the end of a month. 2. Money you receive from investments are called ... received. 8. This is an example of personal expenses. 12 12 EMS: Basic Financial literacy 5. Money that a person earns and uses in his daily live are called ... . 11. A statement of net ... is your financial worth at a specific period. 7. All the costs that you incur to live a called personal ... . 3. A person's "wealth" is measured by deducting his liabilities (debt) from his assets (property) and is called ... worth. 9. Money the government gives to people to help them financially. 11. Are paid to workers at the end of a work week. 4. When income is more than expenses. 6. When expenses are more than income. Activity 1.4: Personal income and expenses Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 13 M. 1 2 COLUMN A All the costs that you incur to live a called personal ... . Money that a person earns and uses in his daily live are called personal ... A COLUMN B groceries B Surplus 3 Money the government gives to people to help them financially. C Income 4 Money you receive from investments are called interest... . D Deficit 5 This is an example of a government grant. E Salaries 6 This is an example of a personal expense. F Government grants 7 When income is more than expenses. G Wages 8 When expenses is more than income. H Received 9 Are paid to a worker at the end of a month. I Disability grant 10 Are paid to workers at the end of a work week. J Net 11 A person's "wealth" is measured by deducting his liabilities (debt) from his assets (property) and is called financial …. K Expenses 12 A statement of … worth is your financial worth at a specific period. ‘ L Worth 13 EMS: Basic Financial literacy 13 Activity 1.5: Personal Income and expenses The following is a list of all the things in Susan’s room: Bed Clothes CD player with CD’s Cell phone Bed lamp Bedding Computer Worth 350 1 500 350 1 200 50 500 3 000 Susan has R300 in her bank account. She owes her mother R200. She owes her brother R50 for a CD that she bought from him. She owes the school’s tuck shop R120. Calculate Susan’s Net Worth by completing the following Statement of Net Worth: Susan Statement of Net Worth as on ...................................... (date) ASSETS LIABILITIES NET WORTH (Surplus or Deficit?) 14 14 EMS: Basic Financial literacy Activity 1.6: Personal income and expenses 1. John Smith wants to know from you what his Financial worth is. Use the following information to draw up his Statement of Net worth. John owns a house worth R780 000. He also owns a vehicle worth R120 000. He has a mortgage bond on his house of R630 000 and still owes ABSA bank R90 000 for his vehicle. His furniture in his house is worth R60 000. His clothing is worth R14 000. He has R2 540 in his current bank account. He owes Edgars R3 100 for clothes. His tablet is worth R6 000 and his cell phone is worth R3 000. John Statement of net worth as on ...................................... (date) ASSETS LIABILITIES NET WORTH (Surplus or Deficit?) 2. Answer the following questions: 2.1 Identify John’s biggest asset. 2.2 Identify John’s biggest liability. 2.3 Calculate how much John has paid off on his vechicle so far. 2.4 John wants to buy another vehicle to the value of R230 000. He will have to loan money from ABSA to buy this vehicle. Predict if ABSA will grant him this loan or not and motivate why you feel this way. 15 EMS: Basic Financial literacy 15 PERSONAL INCOME AND EXPENSES: Formal assessment ANSWER SHEET OF GRADE 40 1. Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 1.6 H. COLUMN A 1.1 All the costs that you incur to live. A COLUMN B Net worth 1.2 A statement of your financial worth at a specific period. B Income statement 1.3 A person’s total assets – total liabilities. C Personal expenses 1.4 When expenses are more than income D Surplus 1.5 Are paid to a worker at the end of a month. E Salaries F Deficit G Statement of net worth 2. Define die volgende Concepts: 2.1 Financial worth 2.2 Government grants 3. You are appointed as the financial consultant of Susan Wilson. Use the following information to answer her questions: [5 x 2 = 10] (3) (2) [5] Susan owns a house worth R1 500 000. She aslo owns a vehicle worth R350 000. She has a mortgage bond on her house to the value of R180 000 and still owes ABSA bank R20 000 on her vehicle. Her furniture in the house is worth R230 000. Her clothes and jewelry are worth R125 000. She has R89 000 in her current bank account. She owes Edgars R12 000 for clothes. Her tablet is worth R8 000 and her cell phone is worth R6 000. She still owes Vodacom R10 000 for the tablet and cell phone. 16 16 EMS: Basic Financial literacy 3.1 Susan wants to know from you what her financial worth is. Draw up her Statement of Net Worth to calculate this. Susan Wilson Statement of Net Worth as on ...................................... (date) ASSETS LIABILITIES NET WORTH (Surplus or Deficit?) 3.2 Identify Susan’s biggets asset. (14) (2) 3.3 Identify Susan’s biggets liability. (2) 3.4 Calculate how much Susan already paid off to date on her house. (3) 3.5 Susan wants to buy another house to the value of R600 000. She will have to apply for another laon at FNB Bank. Predict if FNB Bank will grant her the loan or not. Motivate why you feel that way. (4) [25] 17 EMS: Basic Financial literacy 17 BUSINESS INCOME AND EXPENSES CONCEPT INCOME EXPENSES TYPES INCOME Current income Sales Rent income Interest on current account Interest on fixed deposit Commission income TYPES EXPENSES Material costs Cost of sales Repairs Rent expense Interest on overdraft Interest on loan Salaries Wages Trading licence Consumable goods Insurance Postage Packing material Fuel Stationery Telephone Water and electricity DEFINITION Money earned by the business for e.g. selling products or for the rendering of a service. These are costs that the businessincur to be able to do business. It can be payment for services that the business needs or costs when buying items that are used up in the business. DESCRIPTION Money received by the business for services rendered, e.g. cutting of hari (hair salon). Money received for the selling of trading stock. Money received when the business rents out its land and buildings to someone else. Interest received on the current (cheque) account of the business. Interest received on the fixed deposit invested in a bank. Income received for sales on commission basis. DESCRIPTION The costs (expenses) a service business incur when rendering it’s service, e.g. shampoo in a hair salon. The value of trading stock (cost price) that was sold. Costs of repairs to vehicles, equipment etc. The cost to rent an additional office, building or additional land. Interest that the business pays on an overdraft in the bank. Interest that the business pays on e.g. a mortgage bond. Cost of labour, usually managers, that is paid to them at the end of each month. Cost of labour that is paid weekly. Cost when obtaining a licence to operate your business. Cost of items used when trading, e.g. Handy Andy used to clean the shop. Costs to insure land and buildings, vehicles and equipment, so that it can be replaced in case of a fire. The cost to poste parcels, courier costs and the costs of stamps for letters. Cost of materials used for packaging goods e.g. boxes. Costs for diesel, petrol and oil for vehicles. Costs of pens, pencils, rubbers, paper, invoice books, etc. Costs of telephone and cell phone accounts. Costs of water and electricity of the land and buildings. 18 18 EMS: Basic Financial literacy Activity 1.7: Business income and expenses 1. Indicate if the following accounts are an expense or an income. Make a CROSS the appropriate block. ACCOUNT NAME Bv Water and electricity 1 Current income 2 Repairs 3 Material costs 4 Stationery 5 Interest on current account 6 Wages 7 Interest on overdraft 8 Commission income 9 Consumable stores 10 Postage EXPENSE × (×) in INCOME 2. Group the following accounts under the headings Income and Expenses in the following table: Sales; Trading licence; Cost of sales; Rent income; Telephone; Fuel; Salaries; Interest on fixed deposit; Insurance; Packing material; Rent expense. INCOME EXPENSES 19 EMS: Basic Financial literacy 19 3. In each of the following transactions, identify the reason why cash (money) was received or cash (money) was paid. Use the correct accounting name. TRANSACTION Ex Pay the month’s rent. 1 Receive R1 200 from ABSA on our fixed deposit invested at ABSA. 2 Receive R4 500 from Peter Pratt for the rent of an office in our building. 3 Pay the municipality R450 to renew the licence to do business. 4 Pay Total R800 for petrol. 5 Receive R260 from our client for cutting her hair. 6 Pay R15 000 per cheque to Mr Coetze for his labour this month. 7 Pay Outsurance R890 to insurance the building. 8 Pay CNA per cheque for rulers, pens and rubbers. 9 Pay R450 vir Susan vir haar Weeks se werk. 10 Receive R350 from our client for trading stock she bought from us. ACCOUNT NAME Rent expense 20 20 EMS: Basic Financial literacy BUSINESS INCOME AND EXPENSES: Formal assessment ANSWER SHEET OF 35 GRADE 1. Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 1.6 H. COLUMN A 1.1 Interest the business pays on an overdraft account. 1.2 Money earned by the business for e.g. selling products or for the rendering of a service. A COLUMN B Commission income B Interest on overdraft 1.3 Money received when the business rents out its land and buildings to someone else. C Packing material 1.4 Income received for sales on commission basis. D Income 1.5 Costs of materials used for packaging goods, e.g. boxes. E Interest on current account F Expenses G Rent income 2. (5 x 2 = 10) Indicate if the following accounts are expenses or income. Write only the word ‘income’ or ‘expense’ next to the question number ons your answer sheet, e.g. 2.6 expense. 2.1 2.2 2.3 2.4 2.5 Wages Current income Insurance Fuel Postage (5 x 1 = 5) 21 EMS: Basic Financial literacy 21 3. Group the following accounts in a table under the headings Income and Expenses. Sales; Repairs; Salaries; Interest on fixed deposit; Cost of sales (5 x 2 = 10) 3. In each of the following transactions, identify the reason why cash (money) was received or cash (money) was paid. Write the correct accounting name next to the question number on your answer sheet, e.g. 4.6 Sales. Transactions: 4.1 The business pays R580 interest on its mortgage bond to Standerd Bank. 4.2 The business pays R120 to Pick and Pay for Handy Andy and Sunlight liquid to clean the kitchen of the business. 4.3 Pay R650 to Revlon for shampoo and other hair care products needed in the hair salon. 4.4 The business receives R290 from his client for cutting and blow drying her hair. 4.5 The business pays R190 for invoice books, receipt books and black pens from CNA. (5 x 2 = 10) 22 22 EMS: Basic Financial literacy MODULE 2 MODULE OUTCOMES Participants will be able to: • Understand budgets • Understand savings ! 23 EMS: Basic Financial literacy 23 ECONOMICS AND MANAGEMENT SCIENCES: FINANCIAL LITERACY LESSON PLAN 2: BUDGETS Subject: EMS Grade: 7 Educator(s) Signature: Topic: Bugets Date: HOD Signature: Term: 2 Week: 7-8 Duration: 2 weke Prior content knowledge: Link with next lesson: Accounting concepts Savings Content: Vocabulary/Important words: Personal and business budgets In training manuel Aims and Objectives of the lesson To explain and teach budgets. Use examples in practice to make it easier for the learners. ASSESSMENT STRATEGIES: Formal X Informal Form of assessment: Assessment tool: Formal assessments Memo X Evidence of assessment Teacher: Learners: 24 24 EMS: Basic Financial literacy TEACHER’S ACTIVITIES: LEARNERS’ ACTIVITIES: Explain personal and business budgets Mark each activity with the learner Activity 2.1 – 2.3 RESOURCES: Traninig manuel and text books Teacher’s comments/reflection: HOD input: monitoring and support: 25 EMS: Basic Financial literacy 25 BUDGETS – PERSONAL AND BUSINESS CONCEPT RECEIPTS PAYMENTS BUDGETS SURPLUS DEFICIT DEFINITION Money earned by the business and all other moneys received from other sources (e.g. investments). All costs the business incur to do business as well as any other payments that must be made, e.g. to repay a loan. A plan on how planned income is spend. The business plans ahead where to get its income and how to spend it (e.g. on expenses) When RECEIPTS are more than PAYMENTS. When PAYMENTS are more than RECEIPTS. FORMAT OF A BUDGET Name of the business: Cash Budget for the period .................... to .......................... RECEIPTS *Sales and/or Current income *Interest Receive *Dividends, etc. TOTAL RECEIPTS PAYMENTS *Trading stock bought *Material costs *Insurance, etc. TOTAL PAYMENTS Surplus/Deficit Bank Starting Balance Bank Closing Balance xxx xxx xxx XXX xxx xxx xxx XXX xxx xxx xxx XXX xxx xxx xxx xxx xxx xxx XXX xxx xxx xxx 6 EASY STEPS Step 1: List all the Receipts and calculate their total. Step 2: List all the Payments and calculate their total. Step 3: Calculate the Surplus/Deficit with the following calculation: Receipts – Payments Step 4: Write in the Bank Starting Balance (it will be given to you by Step 5: Calculate the Bank Closing Balance by using the following calculation: Starting balance + Surplus OR Starting balance – Deficit Step 6: This closing balance is the starting balance for the next month. your teacher). *These Receiptets and Payments will differ from Activitiy to Activitiy. 26 26 EMS: Basic Financial literacy Activity 2.1 Personal budget You receive R50 pocket money from your parents each month. Every week end you wash the cars in the neighbourhood. You make R80 every month doing this. You go to the movies once a month and it costs R40 for the movi , cool drink and pop corn. You spend R10 per week at the school’s tuck shop. You owe your sister R100 that you will pay back over a 4 month period at R25 per month. You saw a beautiful pair of sneakers in the shop. It costs R450. You decide to save for it. You only have R120 in your bank account on 1 May 2017. 1. Draw up your Cash Budget for the period 1 May 2017 to 30 June 2017. 2. Answer the following questions: 2.1 Calculate the amount of money in your bank account at the end of June 2017? 2.2 Calculate the amount of money that you are short to buy the sneakers? 2.3 Determine how many months it will still take if you proceed as always, before you can afford the sneakers. Show your calculations. 2.4 You don’t want to wait that long. Suggest what you could do to buy it faster. 1. Your Budget Cash Budget for the period 1 May 2017 to 31 June 2017 MAY JUNE RECEIPTS TOTAL RECEIPTS PAYMENTS TOTAL PAYMENTS Surplus/Deficit Bank Starting Balance Bank Closing Balance 27 EMS: Basic Financial literacy 27 Activity 2.2 Personal budgets Marnus just finished school and got a job in Cape Town. He will earn R3 000 every month in this job. He decided to study part time. These studies will cost R700 per month. He will stay at his Aunty and must pay her R800 per month to stay there. He will take the train to work and the train ticket wil cost him R450 per month. He will keep out pocket money of R300 per month. His cell phone cost is usually R100 per month. During June he will have to spend R500 on textbooks. The rest of his money he wants to save to buy a car. His parents gave him R3 000 and it is currently in his bank account. 1. Draw up a Cash Budget for the period 1 June 2017 to 31 July 2017. 2. Answer the following questions: 2.1 Identify the amount of money Marnus will have in his bank account at the end of July 2017. 2.2 Calculate the possible growth/decline in his money from 1 June to 31 July 2017. 2.3 Marnus are interested in a car that costs R25 000. Calculate how long it will take hom to save if his expenses (payments) stay constant, as calculated in July. 2.4 Predict what will happen to Marnus’s cash if he decides to buy clothes to the value of R1 000 during July. Show your calculations in your prediction. 28 28 EMS: Basic Financial literacy 1. Marnus’s Budget Cash Budget for the period .................... to .......................... JUNE JULY RECEIPTS TOTAL RECEIPTS PAYMENTS TOTAL PAYMENTS Surplus/Deficit Bank Starting Balance Bank Closing Balance 29 EMS: Basic Financial literacy 29 Activity 2.3 Business budget Your friend heard that you know how to draw up a budget. She asked you to help her in drawing up a budget for her dog salon, Frenchy Dog Parlour for the months of June and July 2014. She gives you the following information. She has R4 200 in her business bank account at the May 2014. She pays the following every month: Rent for the shop of R1 500 per month. Water and electricity is usualy about R550 per month. She pays one worker R450 per week. The products she uses to render her service costs about R600 per month. She places and advertisement once a month in the newsletter of the local school. It costs R150 per month. She draws a salary of R6 000 per month. Her cell phone costs are usualy R400 per month. She plans to buy a brand new hair clipper during July to the value of R750. She can cut the hair of 4 dogs per day. She asks her clients R160 per dog. She works from Monday to Friday. There are 20 working days in a 1. Draw up the Cash Budget of Frenchy Dog Parlour for the period 1 June 2017 to 31 July 2017. 2. Answer the following questions: 2.1 Identify the amount of money Frenchy Dog Parlour will have in her bank account at the end of July 2017. 2.2 Calculate the possible growth/decline in her funds (money) from 1 June to 31 July 2017. 2.3 Your friend is thinking about an additional service for ther business. She wants to pick up the dogs at the clients homes and deliver them afterwards 2.3.1 Predict what addisional costs this service will imply. 2.3.2 Assume your friend decides to go ahead with this service. Suggest how she can finance the additional costs you predicted in 2.3.1 30 30 EMS: Basic Financial literacy 1. Frenchy Dog Parlour Cash Budget for the period .................... to .......................... JUNE JULY RECEIPTS TOTAL RECEIPTS PAYMENTS TOTAL PAYMENTS Surplus/Deficit Bank Starting Balance Bank Closing Balance 31 EMS: Basic Financial literacy 31 BUSINESS BUDGET: Formal Assessment ANSWER SHEET OF GRADE 35 The Cafe on the Corner approached you to assist them in drawing up a Cash Budget for the month of June 2017. You receive the following estimated amounts from the owner. The Cafe on the Corner has R12 000 in its bank account at the end of May 2017. The Cafe on the Corner usually pays the following each month: The rent for the shop is R4 500 per month. Water and electricity are usualy about R900 per month. The cashier earns a salary of R3 500 per month. The worker that is responsible for the neatness of the shop and for stocking the shelves earns R520 per week. The manager earns a salary of R8 000 per month. Telephone costs amount to R800 per month. The Cafe on the Corner advertises once per week in the local newpaper and it costs R600 per month. The delivery vehicle of the business must be serviced during June and this will amount to R900. Petrol costs per month for this delivery vehicle amount to R2 000. The owner estimates that stock with a selling price of R50 000 will be sold during June. The cost price of this stock sold will be R30 000. 1. Draw up the Cash Budget for the Cafe on the Corner for June 2017. 2. Answer the following questions: (21) 2.1 Identify the amount of money the Cafe on the Corner will have in its bank account at the end of June 2017. (2) 2.2 Calculate the possible growth/decline in the money of Cafe on the Corner from 31 May to 30 June 2017. (4) 32 32 EMS: Basic Financial literacy 2.3 Study the Cash Budget of the Cafe on the Corner and suggest 2 items where the owner can save in future. (4) 2.4 The real expense for telephone was R1 230 for June 2017. Suggest 2 control measures to prevent this waste in future. (4) TOTAL: 35 1. Cafe on the Corner Cash Budget for the month of June 2017 JUNE RECEIPTS TOTAL RECEIPTS PAYMENTS TOTAL PAYMENTS Surplus/Deficit Bank Starting Balance Bank Closing Balance 33 EMS: Basic Financial literacy 33 ECONOMICS AND MANAGEMENT SCIENCES: FINANCIAL LITERACY LESSON PLAN 2: BUDGETS Subject: EMS Grade: 7 Educator(s) Signature: Topic: Bugets Date: HOD Signature: Term: 4 Week: 5-7 Duration: 3 weke Prior content knowledge: Link with next lesson: Accounting concepts and budgets Savings Content: Vocabulary/Important words: Savings In training manuel Aims and Objectives of the lesson To explain and teach savings and the importance of it. Use examples in practice to make it easier for the learners. ASSESSMENT STRATEGIES: Formal X Informal Form of assessment: Assessment tool: Formal assessments Memo X Evidence of assessment Teacher: Learners: 34 34 EMS: Basic Financial literacy TEACHER’S ACTIVITIES: LEARNERS’ ACTIVITIES: Explain personal savings and the role of that banks play Mark each activity with the learner Activity 2.4 & 2.5 RESOURCES: Traninig manuel and text books Teacher’s comments/reflection: HOD input: monitoring and support: 35 EMS: Basic Financial literacy 35 BUSINESS SAVINGS AND INVESTMENTS CONCEPT SAVINGS INVESTMENT WASTE TYPES INVESTMENTS FIXED TERM DEPOSIT DEBENTURES SHARES UNIT TRUSTS PROPERTY TYPES OF WASTE Electricity Paper and printing Interest on accounts in arrears Telephone- and internet usage Salaries and Wages DEFINITION Money put aside for future use. Savings are usually more shortterm and are used to pay for unexpected expenses. (It will be discussed in detail in Term 4.) An investment is when you buy a financial product like a policy or investment plan, or a physical object such as a valuable painting. The return on this can either be interest or dividends or the object can grow in value. The reckless spending of or loss of money. DESCRIPTION Money is invested for a specific period in a fixed deposit with a bank and can only be released after that time has lapsed. The business gets more interest the longer the money is invested. Money borrowed from the business by other businesses or even the government. The money is payed back to the business, with interest, at a later date. To buy partial ownership in a company, you buy shares. Shareholders usually earn dividends on their money. The money from individuals or smaller businesses are put together to make a bigger amount. It is then invested as a trust. Additional buildings can be bought and then rented to other businesses. The value of the property increases over time and can be sold at a later date for a profit. POSSIBLE SOLUTIONS Turn off lights, computers and other electrical equipment that is not used. Use e-mail instead of regular mail. Recycle paper. Pay accounts (bills) on time. Get caller ID to identify workers who abuse the telephone and control the use of internet in the business. Internet and telephone useage for private matters should not be allowed. Workers must work productively. Use the work by piece system instead of paying wages per hour. Pay the worker per piece of work done and not for the number of hours worked. 36 36 EMS: Basic Financial literacy Activity 2.4 Business savings and investments 1 2 3 4 5 6 7 8 10 9 11 12 13 Across: Down: 3. Additional buildings can be bought and then rented to other businesses. 1. Use e-mail instead of regular mail save on ... 4. To buy partial ownership in a company, you buy shares. Shareholders usually earn dividends on their money. 2. To prevent paying interest on accounts in ... pay accounts (bills) on time. 37 EMS: Basic Financial literacy 37 6. Money put aside for future use. Savings are usually more short-term and are used to pay for unexpected expenses. 5. Turn off lights, computers and other electrical equipment that is not used to save on ... 7. Money is invested for a specific period in a ... term deposit with a bank and can only be released after that time has lapsed. The business gets more interest the longer the money is invested. 9. Get caller ID to identify workers who abuse the telephone and control the use of ... in the business. 8. Workers must work productively to save on waste of ... 11. The reckless spending of or loss of money. 10. Money borrowed from the business by other businesses or even the government. The money is payed back to the business, with interest, at a later date. 12. The money from individuals or smaller businesses are put together to make a bigger amount. It is then invested as a trust. 13. An … is when you buy a financial product like a policy or investment plan, or a physical object such as a valuable painting. The return on this can either be interest or dividends or the object can grow in value. 38 38 EMS: Basic Financial literacy Activity 2.5 Business savings and investments Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 14 N. 1 COLUMN A To prevent paying … on accounts in arrears pay accounts (bills) on time. A COLUMN B Savings 2 Money put aside for future use. Savings are usually more short-term and are used to pay for unexpected expenses. B Unit trusts 3 Use e-mail instead of regular mail save on ... C Waste 4 Money is invested for a specific period in a fixed ... deposit with a bank and can only be released after that time has lapsed. The business gets more interest the longer the money is invested. D Telephone 5 To buy partial ownership in a company, you buy ... Shareholders usually earn dividends on their money. E Paper 6 The money from individuals or smaller businesses are put together to make a bigger amount. It is then invested as a trust. F Property 7 Additional buildings can be bought and then rented to other businesses. G Shares 8 Get caller ID to identify workers who abuse the … . H Investment 9 When you buy a financial product like a policy or investment plan, or a physical object such as a valuable painting. The return on this can either be interest or dividends or the object can grow in value. I Term 10 Workers must work productively to save on waste of ... J Salaries 11 Money borrowed from the business by other businesses or even the government. The money is payed back to the business, with interest, at a later date. K Electricity 12 The reckless spending of or loss of money. L Debentures 13 Turn off lights, computers and other electrical equipment that is not used to save on ... M Interest 39 EMS: Basic Financial literacy 39 BUSINESS SAVINGS AND INVESTMENTS: Formal assessment ANSWER SHEET OF 16 GRADE Find the concept (from column B) that best suits the definition (from column A). Only write the correct letter next to the question number, e.g., 1.6 H. COLUMN A 1.1 Additional buildings can be bought and then rented to other businesses. 1.2 The reckless spending of or loss of money. A COLUMN B Debentures B Property 1.3 Money put aside for future use. C Savings 1.4 The money from individuals or smaller businesses are put together to make a bigger amount. It is then invested as a trust. D Waste 1.5 Money borrowed from the business by other businesses or even the government. The money is payed back to the business, with interest, at a later date. E Unit trusts F Investment G Shares (5 x 2 = 10) 2. Read each of the following scenarios. Identify the area of waste in each and devise a solution for this waste problem the business has. 2.1 ABC traders received an account of R25 000 from the municipality for Electricity. 2.2 Jabo traders just finished the 10the printer cartridge for this month. They also used 50 boxes of paper during May. (3 x 2 = 6) 40 40 EMS: Basic Financial literacy