Income Revenue: Total Sales ( x 30% x 60%) x 100/ Subscription Fees ( x 12/15 x 100/114)

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Shannon Whitehead
5 years ago
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1 FAC2601 May/June 2013 Solution QUESTION 1 FIND ME LTD STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2013 R Revenue Cost Of Sales (55%) ( ) Gross Profit (45%) Other Operating Income ( (C4) ) Administrative Expenses ( ) Distribution Costs ( ) Other Operating Expenses ( ) ( ) Finance Costs ( ) C2 (29 250) Profit Before Tax Income Tax ( ) Profit for the year Other Comprehensive Income Mark-to-Market Adjustment ([R11 x ] ) Revaluation Adjustment (950k-750k) Total Comprehensive Income FIND ME LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY PROFIT BEFORE TAX Profit before tax is disclosed after taking the following into account, amongst others: Income Revenue: Total Sales ( x 30% x 60%) x 100/ Subscription Fees ( x 12/15 x 100/114) Income From Subsidiaries: - Dividends Interest Income From Listed investments - Dividends Fair Value adjustments on Financial Assets ( x 0.50) Profit on Sale of Equipment (C4) Expenses Salaries and Wages Directors Remuneration Executive Directors - Emoluments Pensions Less: Paid by Subsidiaries ( ) Total Paid by the company

2 Non Executive Directors - Emoluments Pensions Less: Paid by the subsidiary - Total Paid by the company Depreciation ( (C3) (C4) (C4) Auditors Remunerations - Audit Fees Expenses Calculations 1. Directors Remuneration Executive Mr Adam = Non-Executive Mr Bruce = * Mr Dave = Pensions = Pensions = Total Emoluments = Total Emoluments = *Paid by Subs = Finance Costs 8 Instalments 2 Paid 6 Left Therefore: /6 = equal payments Interest after payment: x 15% x 6/12 = (31 Aug Feb 2013) Interest before payment: ( ) x 15% x 6/12 = (1 Mar 31 Aug 2012) 3. Motor Vehicles CA 28 Feb 2013 = % p.a. therefore Useful life = 5 years At 28 Feb 2013 vehicles are 2 years old. Therefore the remaining useful life is 3 years Depreciation is straight line, therefore equal every year: / 3yrs = depreciation.

3 4. Equipment Asset Sold = x 20% x 9/12 = depreciation CA = = Profit = Proceeds CA = = profit. Other equipment: Cost = Acc Depr = (90 000) CA = Less Asset sold (68 000) Remaining Equipment CA (Y/E) = CA (B.O.Y) x (100%-depr Rate) = CA (B.O.Y) x 80% CA (B.O.Y) = / 80% CA (B.O.Y) = Therefore Depreciation = =

4 QUESTION 2 JOKER LTD STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012 Assets R Non-current Assets Property Plant and Equipment Investment in Subsidiary Current Assets Inventory Trade and Other Receivables Total Assets b) Notes to the Financial Statements of Joker Ltd as at 30 June Property Plant and Equipment Land Buildings Machinery Furniture and Equipment Carrying amount 1 July Cost Accumulated Depreciation - - ( ) ( ) Additions Disposals (31 250) Revaluations Depreciation - ( ) ( ) ( ) Depreciation Capitalised ( ) ( ) Carrying Amount 30 June Cost Accumulated Depreciation - ( ) ( ) ( ) Buildings consist of a factory building and are situated on Erf 342, Mbombela. Calculations: 1. Machinery CA = (1 Jul 2011 B.o.Y) x 20% = months Capitalised = x 6/12 = Cost = = Accumulated Depreciation B.o.Y = = Buildings Additions = = Depreciation Capitalised = (C1) Total Cost = Depreciation = x 2% x 6/12 =

5 3. Land Reval = NRV CA = = Furniture and Equipment Furniture Sold = x 25% x 10/12 = depreciation CA = = New Asset = x 25% x 2/12 = Old Assets (not sold): CA (BoY) = AD (BoY) = ( ) Cost = , Less asset sold (90 000) = unsold assets x 25% = depreciation Total Depreciation = = Closing Cost = (unsold) (new) = Total PPE = = Inventory: Raw Materials = Finished Goods = ( x 92%) Work in Progress = Total = Trade Receivables: Receivables = Cred Losses= (53 000) Total =

6 QUESTION 3 BULLS-EYE LTD STATEMENT OF CHANGES IN QUITY FOR THE YEAR ENDED 31 DECEMBER 2012 Ordinary Share Capital 10% Cumulative Preference Share Capital 12% Non- Cumulative Preference Share Capital Revaluation Reserve Mark-to- Market Reserve Retained Earnings Balance 1 Jan Changes in Equity Total Comprehensive Income Profit for the year Other Comprehensive Income Ordinary shares issued Non-cumulative preference shares issued Capitalisation issue ( ) Dividends - Ordinary (C6) ( ) - Preference (C7) (67 750) Preliminary expenses written off (17 500) Balance 31 December

7 Calculations: 1. Revaluation: R = Non-cumulative pref share issue = x 2.50 = (1 Jul) 3. Finance Cost: x 10% x 6/12 = Mark to market adjustment = Capitalisation issue: No. Of Shares R value Old Shares New issue Before Cap Issue Cap Issue: x 1/ X R Total After Cap issue Ordinary Dividend = (c5) x 15c = R Preference Dividends: Cumulative: x 10% x 2 years = Non-cumulative: New shares = x 12% x 6/12 = Old Shares = ( ) x 12% = Total Preference dividends = = Profit for the year: Gross Profit Admin expenses ( ) Distribution expenses (15 000) Other Operating expenses (30 000) Other income Finance Cost (c3) (28 750) Tax Expense ( ) Net profit

8 QUESTION 4: Operating Lease: Calculations: 12 x = x = Average = /24 months = 7 500p.m. per machine Journals 28 Feb 2013 Dr Operating Lease expense (P/L) (7 500 x 2 x 9months) Cr Bank (SFP) (8 750 x 2 x 9months) Dr Operating Lease prepayment Feb 2014 Dr Operating Lease expense (P/L) (7 500 x 2 x 12months) Cr Bank (SFP) (8 750 x 2 x 3months x 2 x 9) Cr Operating Lease prepayment Feb 2015 Dr Operating Lease expense (P/L) (7 500 x 2 x 3months) Cr Bank (SFP) (6 250 x 2 x 3months) Cr Operating Lease prepayment 7 500

MEMORANDUM FAC2601 MAY

MEMORANDUM FAC2601 MAY MEMOANDUM FAC2601 MAY 2012 60 FAC2601/201/3 SOLUTION 1 Equalisation of operating lease payments: (3 000 x 12) + [(3 000 x 115%) x 12] + (1 200 x 12) ) 36 36 000 + 41 400 + 14 400 ) 36 = 2 550 per month