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FAC2601/101/3/2012
Tutorial Letter 101/3/2012 Financial statements for companies Semesters 1 and 2
Department of Financial Accounting
This tutorial letter contains important information about your module.
Bar code
FAC2601
2
CONTENTS
1 INTRODUCTION AND WELCOME ................................................................................................ 3
2 PURPOSE OF AND OUTCOMES FOR THE MODULE ................................................................ 4
2.1 Purpose .......................................................................................................................................... 4 2.2 Outcomes ....................................................................................................................................... 4
3 LECTURER AND CONTACT DETAILS ......................................................................................... 4
3.1 Lecturers ......................................................................................................................................... 4 3.2 Department ..................................................................................................................................... 5 3.3 University ........................................................................................................................................ 6
4 MODULE RELATED RESOURCES............................................................................................... 6
4.1 Study material ................................................................................................................................. 6 4.2 Prescribed books ............................................................................................................................ 7 4.3 Recommended books ..................................................................................................................... 7 4.4 Electronic Reserves (e-Reserves) .................................................................................................. 7
5 STUDENT SUPPORT SERVICES FOR THE MODULE ................................................................ 7
6 MODULE SPECIFIC STUDY PLAN ............................................................................................. 11
7 MODULE PRACTICAL WORK AND WORK INTEGRATED LEARNING ................................... 13
8 ASSESSMENT ............................................................................................................................. 13
8.1 Assessment plan .......................................................................................................................... 13 8.2 General assignment numbers ....................................................................................................... 14 8.2.1 Unique assignment numbers and due dates of assignments ....................................................... 15 8.3 Submission of assignments .......................................................................................................... 15 8.4 Assignments ................................................................................................................................. 16
9 EXAMINATIONS .......................................................................................................................... 58
10 OTHER ASSESSMENT METHODS ............................................................................................. 58
11 FREQUENTLY ASKED QUESTIONS .......................................................................................... 58
12 GENERAL ................................................................................................................................... 59
13 ANNEXURE A: ASSUMED KNOWLEDGE ................................................................................. 60
Please note / important notes:
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2 PURPOSE OF AND OUTCOMES FOR THE MODULE 2.1 Purpose Welcome to the FAC2601 module of your studies with the Department of Financial
Accounting of Unisa.
The purpose of this module is to provide learners with knowledge and skills to enable them to draw up the annual financial statements of companies in accordance with the requirements of the Companies Act and certain statements of Generally Accepted Accounting Practice.
2.2 Outcomes Please refer to your study guide for the evaluation criteria for each study unit. 3 LECTURER AND CONTACT DETAILS 3.1 Lecturers
The addresses for communication with the University appear in the brochure: My studies @ Unisa which you have received together with your tutorial matter. You may contact your lecturers in the following ways: Mr G J Steyn: Room 4-53, AJH vd Walt building Miss C S Grondt: Room 4-78, AJH vd Walt building Mr C Els: Room 4-57, AJH vd Walt building Mr F Montgomery: Room 4-54, AJH vd Walt building Mr C Mkefa: Room 4-68, AJH vd Walt building Telephone number for all above lecturers: (012) 429-4238 E-mail address for semester 1 and 2: [email protected] Personal visits To avoid any disappointment, make an appointment with a lecturer as they may not always be readily available due to other commitments.
3.2
Depart Written Addres FOR AThe HeDepartP O BoUNISA0003 PLEAS The foassista Mrs D By teleRoom 4
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3.3 University Communication with the University If you need to contact the University about matters not related to the content of this module, please consult the publication My studies @ Unisa that you received with your study material. This brochure contains information on how to contact the University (e.g. to whom you can write for different queries, important telephone and fax numbers, addresses and details of the times certain facilities are open). Always have your student number at hand when you contact the University. How can students contact Unisa: • Unisa website: http://www.unisa.ac.za and http://mobi.unisa.ac.za.
All study related information is now available. • myUnisa: http://myunisa.ac.za and http://myunisa.ac.za/portal/pda.
Students can access their own information. • E-mail: [email protected].
Students may send an e-mail for information on how to contact Unisa via e-mail.
• Sms: 32695 (only for students in South Africa) Students may send a sms for more information on how to contact
Unisa via sms. The sender will receive an auto response sms with the various sms options. The cost to the student per sms is R1.
• Fax: (012) 429-4150 Students will be able to fax their enquiries, where after it will be
distributed to and processed by the relevant department. 4 MODULE RELATED RESOURCES 4.1 Study material
The study material for this module entails the following: Supplied by UNISA
• One study guide. • A number of tutorial letters which you will receive during the semester. This tutorial matter will not necessarily be available at the time of registration. Such tutorial matter will be dispatched to students as it becomes available (for instance, feedback on assignments). If you have access to the internet, you can view the study guides and tutorial letters for the modules for which you are registered on the university’s online campus, myUnisa, at http://my.unisa.ac.za. Please Note: Your lecturers cannot help you with missing study material. Please contact Unisa Contact Centre, via your preferred method (refer to 3.3).
4.2
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5.1 Contact with fellow students 5.1.1 Study groups
It is advisable to have contact with fellow students. One way to do this is to form study groups. The addresses of students in your area may be obtained from the following department: Directorate: Student Administration and Registration PO Box 392 UNISA 0003
5.1.2 myUnisa If you have access to a computer that is linked to the internet, you can quickly access resources and information at the university. The myUnisa learning management system is Unisa's online campus that will help you to communicate with your lecturers, with other students and with the administrative departments of Unisa – all through the computer and the internet. To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the “Login to myUnisa” link on the right-hand side of the screen. This should take you to the myUnisa website. You can also go there directly by typing in http://my.unisa.ac.za. Please consult the publication My studies @ Unisa, which you received with your study material, for more information on myUnisa.
5.1.3 Tutor information
REGION: PHYSICAL ADDRESS CONTACT DETAILS: TUTORIAL SERVICES
NORTH-EASTERN POLOKWANE 23A Landros Mare’ Street Polokwane, 0742
(015) 290-3443 Fax: (015) 291-3443
NELSPRUIT Standard Bank Centre: 1st Floor 31 Brown Street Nelspruit, 1201
(013) 755-2476 Fax: (013) 7552489
MIDDELBURG Cnr Church & Bhimy Damane Str Town Square Building Ground Floor Middelburg, 1050
(013) 282-4115 Fax: (013) 282-6221
GAUTHUTutoBuildUnisCnr WJOHTutoOld J1 KeJohaFLOTutoCnr CF-BloBENUnisCor. DaveVAASediMeyeKWADURTutoUnisBola TutoUnisRoomCamPIETTutoReid1 LaPieteNEWTutoCnr SNewCAPPARTuto15 JeParo
UTENG UTONG (Suorial Serviceding 14, Roa SunnysidWalker & J
HANNESBUorial ServiceJSE Annek
erk Street annesburg,RIDA
orial ServiceChristiaan ock, Florid
NONI a EkurhuleR51 & Bra
eyton AL
beng Coller BLVD, VA-ZULU NARBAN orial Servicea Kwa-Zulnd Bank B
orial Servicea Kwa-Zulm 1b5, G
mpus. DurbTERMARITorial Serviced Building (ngalibaleleermaritzbu
WCASTLE orial ServiceSutherland
wcastle, 294PE COASTROW orial Serviceean Simon
ow, 7499
unnyside) es Office oom 2.40 de CampuJoubert strURG es Office kes Buildin
, 2000
es Office de Wet/Pia
eni Regionazil Str,
ege PremVanderbijlpATAL
es Office u Natal
Building. Du
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TZBURG es Office (top floor, re Str rg, 3201
es Office d and Hard40
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us reets
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ioneer Ave
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mises, No.6park, 1911
urban
or, Stange
room 22),
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Centre
6 Frikkie
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(012) 4Fax: (012
(011)
(011) 4Fax: (011
(011) 8
016 93
(031) 3Fax: (031
(033) 3Fax: (033
(031) 3
(021) 9Fax: (021
441-5751 ) 441-5804
630-4541
471-2082 ) 471- 349
8459306/00
31 9979/98
332 2202 ) 337-2026
355-1734 ) 394-3626
335-8127
936-4190 ) 936-4124
4
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GEORGE Tutorial Services Office 129 Mitchell street George, 6529
(044) 884 1300
MTHATHA Tutorial Services Office 32 Cnr Victoria & York Rd Str Economic Affairs Building Umtata, 5100
(047) 531-5002/6 Fax: (047) 531-5120
EAST LONDON Tutorial Services Office 10 St Lukes Road Southernwood East London, 5201
(043) 743 9246 Fax: 043 743 9273
PORT ELIZABETH Tutorial Services Office Corner of Cape, Greyville and Ring Rds, Green Acres Port Elizabeth, 6045
(041) 363 1070 Fax: 041 363 1071
MIDLANDS MAFIKENG Tutorial Services Office 29 Main Street Opposite ABSA Bank, Mafikeng, 2745
: (018) 381-6617/7318
Fax: (018) 381-7926
RUSTENBURG Tutorial Services Office Forum Building (1st Floor) Cnr. OR Tambo & Steen Street Rustenburg, 0300
(014) 594 8800/8856 Fax: (014) 594-8863
POTCHEFSTROOM Tutorial Services Office 20 Auret Street Potchefstroom, 2531
(018) 294 3362/3341 Fax: (018) 297-2107
KIMBERLEY Tutorial Services Office Shop 3 – Liberty Life Building Chapel Street Kimberley, 8301
(053) 832 6391
BLOEMFONTEIN Tutorial Services Office NRE House 161 Zastron Street Bloemfontein, 9301
(051) 411-0455 Fax: (051) 430-3822
KROONSTAD Tutorial Services Office NFS Building 1st floor 36 Brand Street Kroonstad, 9500
(056) 213-2053/4 Fax: (056) 213-1867
6 Use You 6.1 6.2
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6.7 General remarks
Please note: Enquiries about assignments (e.g. whether or not the university has received your assignment or the date on which an assignment was returned to you) must be directed to the Unisa Contact Centre via your preferred method (refer to 3.3)
Assignments should be addressed to: The Registrar PO Box 392 UNISA 0003 You may submit written assignments and assignments done on mark-reading sheets either by post or electronically via myUnisa. Assignments may not be submitted by fax or email. For detailed information and requirements as far as assignments are concerned, see the brochure My studies @ Unisa, which you received with your study material. Proposed Study Programme for 2012 Experience has shown that students often fail to plan their studies properly so as to achieve specific study goals at predetermined dates. This leads to a haphazard approach to their studies and the use of ineffective study techniques. We are of the opinion that the restructuring of the module content into shorter study units which should be completed in accordance with a well-planned programme, will greatly assist students in making a success of their studies. We assume the following: That your studies should commence towards the middle of January (first semester) and June (second semester) and that the full module should be completed by approximately the end of April (first semester) and September (second semester). This will leave sufficient time for revision. Study programme: First semester – 2012
Assignment Date Study unit Due date 01
02
03
15/01/2012 to
09/03/2012
13/03/2012 to
07/04/2012
11/04/2012 to
23/04/2012
1 – 6
7 – 11
1 – 11
12/03/2012
10/04/2012
25/04/2012
Stu
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Students require a final mark of 50% to pass a module. This final mark is electronically calculated as follows:
(5% x mark obtained for compulsory assignment 01) + (5% x mark obtained for compulsory assignment 02) + (90% x mark obtained in the examination).
Sub minimum requirements A sub minimum of 40% in the examination is required. Paragraph 4.13 of the Assessment Policy provides that the final mark of a student is a combination of the year mark and the examination mark, in the ratio as explained above. In case where a student does not obtain the required sub minimum of 40% in the examination, the year mark does not count. The final mark is the examination mark obtained. Results of supplementary examination In terms of paragraph 4.19 of the Assessment Policy the year mark, previously obtained will not contribute to results of students writing supplementary examinations. The final mark is the supplementary examination mark. Please ensure that the first compulsory assignment reaches the University before the due date - late submission of the assignment will result in you not being admitted to the examination.
Also refer to paragraph 3 of Tutorial Letter ACTALL-4/301/2012.
The assessment of FAC2601 consists of a year mark from the two compulsory assignments (10%), plus the mark obtained from a 2 hour examination (90%). Take note: Assignment 01 is compulsory. It is marked electronically and contributes 5% towards the final mark. Assignment 02 is also compulsory. It is also marked electronically and also contributes 5% towards the year mark. The electronic (computerised) marking of the assignments relies totally on the use of mark-reading sheets. An assignment can only be marked if a mark-reading sheet is submitted. Students can also use the internet to submit the assignments. (Refer to the section on myUnisa).
8.2 General assignment numbers
Assignments are numbered consecutively per module, starting from 01.
8.2.
8.3
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Contributitowards fi
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15
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16
• Calculate your answers for the multiple-choice questions of assignments 01 and 02 on a separate piece of paper. Use a mark-reading sheet to complete assignments 01 and 02 and submit the assignments. Ensure that you use the correct UNIQUE NUMBER allocated for the particular assignment and semester. This assignment can also be submitted via myUnisa.
Remember: - there is only one correct answer to each question, and - all questions are equal in value.
• No bar code should be attached to the mark-reading sheet. • Assignments must not reach us later than the dates specified in paragraph 6.7 of this
tutorial letter. • Assignments must under no circumstances contain any correspondence. • Specify the module code (FAC2601) and assignment number (01 or 02) in all enquiries
regarding assignments handed in for marking. Examination admission requirements The submission of Assignment 01 is a requirement to be admitted to the examination. It will, however, be to your own advantage to complete all the assignments, as: • the assignments provide practice which is essential in your study of Accounting, • valuable revision material is contained in the assignments and ensure that you work
throughout the semester, and • the type of questions in assignment 03 and the study guide are usually representative
of the type of questions which you can expect in the examination. Plagiarism Do not copy the assignment solutions of fellow students!! Plagiarism (copying) is the act of taking word, ideas and thoughts of others and passing them off as your own. It is a form of theft which involves a number of dishonest academic activities.
The Disciplinary Code for Students (2004) is given to all students at registration. Students are advised to study the Code, especially Sections 2.1.13 and 2.1.14 (2004:3-4). Kindly read the University’s Policy on Copyright Infringement and Plagiarism as well.
8.4 Assignments All the assignments of this module, both first and second semester, will now follow.
FOR THIS A
EXAMINA5% T
-
ASSIFIRST
ASSIGNMATION ATOWARD
STUDEN
FOR THEDue d
Unique
IGNMENT SEME
MENT IS CDMISSIO
DS YOUR
NTS REGIS
E FIRST Sdate: 12/03
Number:
NT 01: STER
COMPULON AND C
FINAL M
STERED:
SEMESTE3/2012 : 295823
LSORY CONTRIBU
ARK
:
ER
UTES
FAC2601/101
17
18
ASSIGNMENT 01/2012 DUE DATE: First semester - 12/03/2012 UNIQUE NUMBER: FIRST SEMESTER: 295823 DOT NOT SUBMIT ASSIGNMENTS BY MEANS OF FAX OR E-MAIL NB: 1. This assignment must be answered on a mark-reading sheet or can be submitted via
myUnisa. This assignment is marked electronically, therefore the strict adherence to the due date.
2. Before answering this assignment please read paragraphs 8 of this tutorial letter. 3. This assignment covers study units 1 – 6 and comprises 10 multiple choice
questions. 4. NO EXTENSION WILL BE GRANTED FOR THE LATE SUBMISSION OF THIS
ASSIGNMENT AND NO CORRESPONDENCE OR TELEPHONE CONVERSATIONS WILL BE CONDUCTED IN THIS REGARD.
5. IMPORTANT ASPECTS REGARDING MULTIPLE-CHOICE ASSIGNMENTS
• A mark-reading sheet is required for answering assignment 01. Before completing the mark-reading sheet please see the instructions contained in this year’s issue of “My studies @ Unisa”. Read these instructions CAREFULLY and follow them EXACTLY to avoid mistakes.
• Work carefully through the relevant tutorial matter before you tackle the
assignment. • Calculate your answer on a separate piece of paper before you complete the
mark-reading sheet.
REMEMBER
- There is only one correct answer to each question. - All questions are equal in value. - Only mark-reading sheets provided, may be used. - Colour in the correct block with a HB pencil. - Fill in you student number correctly. - Fill in the assignment number correctly. - Fill in the unique assignment number for the specific semester correctly. Every
assignment which is marked by the computer is given a unique number. The number contains information on the course code and assignment number. When the computer reads the mark-reading sheet with, say, the unique number , it “knows” that it is Assignment 01 for that specific module.
- Send only your mark-reading sheet to the Assignment Section in the appropriate envelope.
- Make sure that you have enough mark-reading sheets.
DO NOT
- m- te- st- co- co- m- su- try
T:
make more ear or fold ttaple the molour outsiolour in the
make correcubmit answy to repair
than one mthe mark-r
mark-readinde the bloce block witctions withwers on a wa torn ma
mark per qreading sheng sheet tock, h a pen,
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question, eet, o another p
n fluid, eet of pape
sheet with
piece of pa
er, or h sticky tap
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FAC2601
e.
/101
19
20
FIRST SEMESTER 2012 ASSIGNMENT 1 (20 marks) (24 minutes) Answer the following multiple choice questions. Indicate your choice by only selecting 1, 2, 3 or 4 for each question answered. 1. The objective of financial statements is:
1. To enable the users of financial statements to make useful economic decisions. 2. To provide useful information regarding financial statements to users. 3. To provide information about the financial position, performance and the change in
the financial position of the entity. 4. All of the above.
2. Which one of the following options does not describe income according to the Accounting
Framework?
1. Decreases of assets. 2. The increases in economic benefits during the accounting period. 3. An increase in equity, excluding contributions from owners. 4. Decreases of liabilities.
3. Capitalisation shares represent:
1. Shares issued to new shareholders at a payment. 2. Shares issued to existing shareholders at no payment. 3. Shares issued to new shareholders at no payment. 4. Shares issued to existing shareholders at a payment.
Use the following information to answer question 4 and 5. The following balances were extracted from the accounting records of Els Limited for the year ended 28 February 2011: R Ordinary share capital 2 000 00010% Preference shares 220 000
The ordinary shares were issued at R2 each and the preference shares at R5 each. Els Limited was incorporated with the following authorized share capital: 1 000 000 Ordinary shares 200 000 10% Preference shares
Dividends on ordinary shares, at 5c per share, should still be provided for. No dividends were declared or paid during the previous year. 4. The dividend on ordinary shares at 28 February 2011, will be calculated as:
1. 1 600 000 x R2 x 5c = R160 000. 2. 1 000 000 2 000 000
R2 x 5c = R50 000.
3. 1 000 000 2 000 000R2
x 5% = R50 000. 4. None of the above.
ASSIGN 5. The
1. 22. 3. 4.
6. Whic
1. 2. 3. 4.
7. Pref
know
1. 2. 3. 4.
8. The
occu
1. 2. 3. 4. A
9. Reve
1. W2. A3. A4.
10. Reve
1. 2. W3. A4. A
NMENT 1 (
dividend o
200 000 x R220 000 10% x R 2None of th
ch of the fo
Expenses Expenses Expenses None of th
ference shawn as:
RedeemabParticipatinCumulativeOrdinary s
fundamenur and not
Going conMatching. RelevanceAccrual.
enue on su
When the At the endAt the begOn a straig
enue on tu
Over the pWhen the At the endAt the beg
(continued
on 10% pre
10% x R5 x R0,10 =
220 000 = Rhe above.
ollowing st
result in dtake a formare a decr
he above.
ares which
ble prefereng preferee preferen
shares.
ntal accouwhen cash
cern.
e.
ubscription
cash is rec of the subinning of thght-line ba
uition fees
period of incash is rec of the tuitinning of th
d)
eference s
= R100 00R22 000.
R22 000.
atements a
ecrease inm of out florease in ec
h are entitle
ence sharence sharesce shares.
unting conh is receive
ns is recog
ceived. bscription ahe agreemsis over th
is recognis
struction.ceived. ion period.he tuition p
hares at 28
00.
are true?
n liabilities.ows or depconomic be
ed to arrea
s. s. .
cept that ed or paid,
nised:
agreementment. he period o
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. period.
8 February
pletion of aenefits dur
ar dividend
transactio is known
t.
f the agree
y 2011 will
ssets. ring the acc
ds payable
ns are acas:
ement.
be calcula
counting p
out of futu
ccounted f
FAC2601
ated as:
eriod.
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for when t
/101
21
are
they
22
ASSIGNMENT 01:
SECOND SEMESTER
THIS ASSIGNMENT IS COMPULSORY FOR EXAMINATION ADMISSION AND CONTRIBUTES
5% TOWARDS YOUR FINAL MARK
STUDENTS REGISTERED:
- FOR THE SECOND SEMESTER Due date: 27/08/2012
Unique Number: 237193
ASSIGN DUE DA UNIQUE DOT NO NB: 1.
2. 3.
4.
5.
REMEM
- T- A- O- C- F- F- F
ascocoit
- Sen
- M
NMENT 01/
ATE:
E NUMBER
OT SUBMIT
This asssubmittedstrict adh
Before an
This assquestions
NO EXTASSIGNMCONVER
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A mcompyear’and f
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mark
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ill in you still in the asill in the ssignment ontains inomputer reis Assignmend only nvelope.
Make sure t
/2012
R:
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signment d via myUherence to
nswering th
signment cs.
ENSION WMENT RSATIONS
ANT ASPE
mark-readinpleting the s issue offollow them
k carefullygnment.
ulate your k-reading s
ly one corrs are equa
reading she correct btudent numssignment unique as which is m
nformation eads the mment 01 foryour mark
that you ha
Second s
SECOND
NMENTS B
must be Unisa. Thisthe due da
his assignm
covers stu
WILL BE GAND N
S WILL BE
ECTS REG
ng sheet mark-read
f “My studm EXACTL
y through
answer oheet.
rect answeal in value.eets providblock with amber correcnumber co
ssignment marked by
on the cmark-readinr that speck-reading s
ave enough
semester
D SEMEST
BY MEANS
answereds assignmate.
ment pleas
udy units
GRANTEDNO COE CONDUC
GARDING
is requireding sheet dies @ UnLY to avoid
the relev
n a separa
er to each q ded, may ba HB pencctly. orrectly.
number fthe comp
course cong sheet wcific modulesheet to t
h mark-rea
- 27
TER: 23
S OF FAX
d on a ment is ma
se read pa
1 – 6 an
D FOR THRRESPON
CTED IN T
MULTIPL
ed for anplease se
nisa”. Read mistakes.
vant tutoria
ate piece
question.
be used. cil.
for the sputer is give
ode and with, say, the. he Assign
ading shee
7/08/2012
37193
OR E-MAI
mark-readarked elec
ragraph 8
nd compris
HE LATE SNDENCE THIS REGA
LE-CHOICE
nswering ae the instrd these in
al matter
of paper b
pecific semen a uniquassignmen
he unique n
nment Sec
ets.
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ding sheectronically,
of this tuto
ses 10 m
SUBMISSOR
ARD.
E ASSIGN
assignmenructions constructions
before yo
before you
mester corue numbernt numbernumber , it
ction in the
FAC2601
t or can therefore
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multiple ch
ION OF TTELEPHO
NMENTS
nt 01. Beontained in
CAREFU
ou tackle
complete
rrectly. Ev. The numr. When t “knows” t
e appropri
/101
23
be the
oice
THIS ONE
efore this LLY
the
the
very ber the that
iate
24
DO NOT:
- make more than one mark per question, - tear or fold the mark-reading sheet, - staple the mark-reading sheet to another piece of paper, - colour outside the block, - colour in the block with a pen, - make corrections with correction fluid, - submit answers on a written sheet of paper, or - try to repair a torn mark-reading sheet with sticky tape - use another one.
SECONASSIGN Answer 1, 2, 3 o 1. Reve
1. 2. A3. T4. A
2. The
com
1. 2. 3. 4.
3. Whic
1.
t2. T
a3. T
t4.
4. An e
1. T2. 3. 4.
5. A co
loanrate on 5the l5 Ma
1. 2. 3. 4.
D SEMESNMENT 1 (
the followr 4 for eac
enue on re
Legal title A significaThe purchAfter signin
following mpany:
Managing Financial dChairman None of th
ch of the fo
Notes andunderstandthe financiThe stateperformanan entity. The statemthe liquidityNone of th
expense is
The reductBy way of Option 1 aNone of th
ompany en is repayais 10% pe
5 March 20long-term arch 2011.
R22 500. R21 250. R20 000. None of th
TER 2012(20 marks)
wing multich question
eal estate s
passes to nt deposit ase price ing all purc
directors
director andirector. of board o
he above.
ollowing st
d additionad financial al statemement of cce and cha
ment of finy and solv
he above.
defined as
tion of ecoincrease o
and 2. he above.
ntered intoable in 5 eer year. Inte011. The yeloan on th.
he above.
) (24 minu
ple choicen answered
sales is rec
the buyer.is receiveds settled in
chase docu
are cons
nd marketi
of directors
atements i
al appendistatement
ents. comprehenanges in fi
nancial posency can b
s follows a
onomic resoof liabilities
an unsecqual instaerest for thear end of
his date wa
utes)
e questiond.
cognised w
d. n full. uments by
sidered a
ng director
.
is false?
ices providts and info
nsive inconancial po
sition reflecbe calculat
according to
ources durs or depleti
ured long-llments co
he current yf the compas R200 00
ns. Indicat
when:
both partie
s a non-e
r.
de additionormation th
ome providosition and
cts the ecoted with the
o the frame
ring the acon of asse
-term loan ommencingyear must
pany is 2800. Calcul
te your ch
es.
executive
nal informhat does no
des informshows the
onomic rese informati
ework:
ccounting pets.
agreemeng on 31 Austill be proFebruary 2ate the int
hoice by o
director o
ation requot appear
mation on e economic
sources ofion.
period.
nt on 1 Maugust 2010ovided for a2011 and tterest that
FAC2601
only selec
of the pa
uired to beon the fac
the financ resource
f an entity
arch 2010. 0. The inteand is payathe balancis payable
/101
25
cting
arent
etter ce of
ncial es of
and
The erest able
ce of e on
26
ASSIGNMENT 1 (continued) 6. The authorised share capital is:
1. The total amount paid up by shareholders. 2. The total amount of shares issued to shareholders. 3. The maximum amount mentioned in the memorandum of association. 4. The same as the ordinary share capital.
7. Revenue attributable to instalment sales (excluding interest) is recognised:
1. When a significant deposit is received. 2. On date of sale. 3. When the buyer makes a final payment. 4. None of the above.
8. Income from franchise fees is recognised:
1. On a basis that reflects the purpose for which the fees were charged. 2. At the end of one agreement. 3. On a straight-line basis over the period of the agreement. 4. When the cash is received.
9. Income from lay away sales is recognised:
1. When the order is placed. 2. When the buyer makes a final payment or a significant deposit is received. 3. On a straight-line basis over the period of the agreement and as soon as the goods
are delivered. 4. None of the above.
10. ABC Limited issued 2 000 redeemable preference shares on 1 January 2002. The
shares are redeemable in cash at the option of the holder. If the options are not exercised, the shares will be redeemable on 31 December 2012. How will you disclose the preference shares in the financial statements of ABC Limited on 29 February 2008?
1. Equity. 2. Financial long term liability. 3. Contingent liability. 4. None of the above.
CTHIS AS
COUNTS
ASFIR
SSIGNMEN5% TOW
STUDE
- FOR TDue
Uniqu
SSIGNMERST SEM
NT IS COWARDS YO
ENTS RE
THE FIRSe date: 10ue Numb
ENT 02:MESTER
OMPULSOOUR FINA
GISTERE
T SEMES0/04/2012er: 32579
R
ORY AND AL MARK
ED:
STER 2 94
K
FAC2601/101
27
28
ASSIGNMENT 02/2012 DUE DATE: First semester - 10/04/2012 UNIQUE NUMBER: FIRST SEMESTER: 325794 DOT NOT SUBMIT ASSIGNMENTS BY MEANS OF FAX OR E-MAIL NB: 1. This assignment must be answered on a mark-reading sheet or can be
submitted via myUnisa. This assignment is marked electronically, therefore the strict adherence to the due date. 2. Before answering this assignment please read paragraphs 8 of this tutorial letter. 3. This assignment covers study units 7 – 11 and comprises 10 multiple choice
questions. 4. NO EXTENSION WILL BE GRANTED FOR THE LATE SUBMISSION OF THIS
ASSIGNMENT AND NO CORRESPONDENCE OR TELEPHONE CONVERSATIONS WILL BE CONDUCTED IN THIS REGARD.
5. IMPORTANT ASPECTS REGARDING MULTIPLE-CHOICE ASSIGNMENTS
• A mark-reading sheet is required for answering assignment 01. Before
completing the mark-reading sheet please see the instructions contained in this year’s issue of “My studies @ Unisa”. Read these instructions CAREFULLY and follow them EXACTLY to avoid mistakes.
• Work carefully through the relevant tutorial matter before you tackle the
assignment. • Calculate your answer on a separate piece of paper before you complete the
mark-reading sheet.
REMEMBER
- There is only one correct answer to each question. - All questions are equal in value. - Only mark-reading sheets provided, may be used. - Colour in the correct block with a HB pencil. - Fill in you student number correctly. - Fill in the assignment number correctly. - Fill in the unique assignment number for the specific semester correctly. Every
assignment which is marked by the computer is given a unique number. The number contains information on the course code and assignment number. When the computer reads the mark-reading sheet with, say, the unique number , it “knows” that it is Assignment 02 for that specific module.
- Send only your mark-reading sheet to the Assignment Section in the appropriate envelope.
- Make sure that you have enough mark-reading sheets.
DO NOT
- m- te- st- co- co- m- su- try
T:
make more ear or fold ttaple the molour outsiolour in the
make correcubmit answy to repair
than one mthe mark-r
mark-readinde the bloce block witctions withwers on a wa torn ma
mark per qreading sheng sheet tock, h a pen,
h correctionwritten sherk-reading
question, eet, o another p
n fluid, eet of pape
sheet with
piece of pa
er, or h sticky tap
aper,
pe - use aanother on
FAC2601
e.
/101
29
30
FIRST SEMESTER 2011 ASSIGNMENT 2 (20 marks) (24 minutes) Answer the following multiple choice questions. Indicate your choice by only selecting 1, 2, 3 or 4 for each question answered. 1. Which of the following is true according to IAS 16?
1. The cost relating to the opening of a facility can be capitalised against the cost of the asset.
2. Property, plant and equipment (PPE) must initially be measured at residual value. 3. An item of PPE is recognised as an asset if it is probable that economic benefits will
flow and costs can be measured reliably. 4. All of the above.
2. Which one of the following costs is NOT regarded as a directly attributable cost of an
item of property, plant and equipment?
1. Cost of advertising and promotional activities. 2. Cost of site preparation. 3. Professional fees. 4. None of the above.
3. On 31 March 2010 a motor vehicle with an original cost of R100 000 and on which
accumulated depreciation of R40 000 was written off at the beginning of the financial year, was traded in at a loss of R7 000. Motor vehicles are depreciated at 20% per annum according to the straight-line method. The financial year ends on 30 June 2010. The total depreciation for the current year is:
1. R20 000. 2. R15 000. 3. R60 000. 4. None of the above.
4. Which of the following statements are false?
1. Net realisable value is an entity-specific amount realised from the sale of inventories in the ordinary course of business by that entity.
2. Inventory is measured at lower of cost and net realisable value. 3. Inventory is held for sale in the ordinary course of business. 4. None of the above.
5. Which one of the following is not a cost formula of inventory according to IAS 2
(AC 108)?
1. First-in, first-out (FIFO). 2. Weighted average costs. 3. Last-in, first-out (LIFO). 4. None of the above.
ASSIGN 6. Whic
(AC
1. 2. 3. T4. A
7. Whic
cost
1. 2. T3. A4.
Answers 8. Whic
R4010%
1. 2. 3. 4.
9. Whic
inve
1. 2. 3. 4.
10. Assu
comvalu
1. 2. 3. 4.
NMENT 2 (
ch of the 105)?
Lease agreOwnershipThe lesseeAll of the a
ch one of t of invento
Purchase Transport Answer 1 aNone of th
s in questio
ch one of 000, rece
% per period
R372 500.R272 548.R528 000.None of th
ch one of tsted at the
R726 873.R826 880.R411 700.None of th
ume you impound inte
e of the inv
R25 900. R25 094. R57 500. None of th
(continued
following
eement is p is not trane does notabove.
the followiory?
price of finand handland 2.
he above.
ons 8 to 10
f the folloeived at thd?
he above.
the followine end of ea
he above.
invest R5 erest per avestment?
he above.
d)
will be cl
normally snsferred to normally h
ng accord
nished gooding cost.
0 must be c
owing amohe end of
ng amountach period
000 per annum. Wh
?
assified a
shorter thao the lessehave the o
ing to IAS
ds of raw m
calculated
ounts repreach perio
ts represenfor ten per
annum for hich one of
s an oper
n the econe at the en
option to pu
2 (AC 108
materials.
to the nea
resent the od for twe
nt the futurriods, at an
10 years the follow
rating leas
nomic usefund of the leurchase the
8) is includ
arest rand.
present elve period
re value ofn interest r
at the ening amoun
se accordi
ul life of thease agreee asset.
ded from t
value of ads, at a dis
f an amounrate of 15%
nd of eachnts represe
FAC2601
ng to IAS
e asset. ement.
he purcha
an annuityscount rat
nt of R35 8% per perio
h year at 1ent the pres
/101
31
S 17
sing
y of e of
800, d?
15% sent
32
ASSIGNMENT 02: SECOND SEMESTER
THIS ASSIGNMENT IS COMPULSORY AND COUNTS 5% TOWARDS YOUR FINAL MARK
STUDENTS REGISTERED:
- FOR THE SECOND SEMESTER Due date: 24/09/2012
Unique Number: 311199
ASSIGN DUE DA UNIQUE DOT NO NB: 1.
2. 3.
4.
5.
REMEM
- T- A- O- C- F- F- F
ascocoit
- Sen
- M
NMENT 02/
ATE:
E NUMBER
OT SUBMIT
This asssubmittedstrict ad
Before an
This assquestions
NO EXTASSIGNMCONVER
IMPORTA
• A macompleyear’s follow
• Work
assign • Calcul
mark-r
MBER
here is onlAll questionOnly mark-rColour in th
ill in you still in the asill in the ssignment ontains inomputer reis Assignmend only nvelope.
Make sure t
/2012
R:
T ASSIGN
signment d via myUherence to
nswering th
signment cs.
ENSION WMENT RSATIONS
ANT ASPE
ark-readingeting the missue of “Mthem EXA
carefully nment.
ate your areading sh
ly one corrs are equa
reading she correct btudent numssignment unique as which is m
nformation eads the mment 02 for
your mark
that you ha
Second s
SECOND
NMENTS B
must be Unisa. Thiso the due d
his assignm
covers stu
WILL BE GAND N
S WILL BE
ECTS REG
g sheet ismark-readiMy studies
ACTLY to a
through t
answer oneet.
rect answeal in value.eets providblock with amber correcnumber cossignment marked by
on the cmark-readinr that speck-reading
ave enough
semester
D SEMEST
BY MEANS
answereds assignmdate.
ment pleas
udy units 7
GRANTEDNO COE CONDUC
GARDING
s requiredng sheet ps @ Unisaavoid mista
the releva
n a separa
er to each q ded, may ba HB pencctly. orrectly.
number the comp
course cong sheet wcific modulesheet to t
h mark-rea
-
TER:
S OF FAX
d on a ment is ma
se read pa
7 – 11 an
D FOR THRRESPON
CTED IN T
MULTIPL
d for ansplease see”. Read th
akes.
ant tutoria
ate piece o
question.
be used. cil.
for the sputer is give
ode and with, say, the. the Assign
ading shee
24/09
3111
OR E-MAI
mark-readarked elec
ragraphs 8
nd compri
HE LATE SNDENCE THIS REGA
LE-CHOICE
swering ae the instruese instruc
al matter
of paper b
pecific semen a uniquassignmen
he unique n
nment Sec
ets.
9/2012
99
IL
ding sheectronically,
8 of this tut
ises 10 m
SUBMISSOR
ARD.
E ASSIGN
assignmenuctions coctions CAR
before yo
before you
mester corue numbernt numbernumber , it
ction in the
FAC2601
t or can therefore
torial letter
multiple ch
ION OF TTELEPHO
NMENTS
t 02. Bentained in REFULLY
ou tackle
complete
rrectly. Ev. The numr. When t “knows” t
e appropri
/101
33
be the
r.
oice
THIS ONE
efore this and
the
the
very ber the that
iate
34
DO NOT:
- make more than one mark per question, - tear or fold the mark-reading sheet, - staple the mark-reading sheet to another piece of paper, - colour outside the block, - colour in the block with a pen, - make corrections with correction fluid, - submit answers on a written sheet of paper, or - try to repair a torn mark-reading sheet with sticky tape - use another one.
SECONASSIGN Answer 1, 2, 3 o 1. The
1. S2. 3. 4. A
2. A ne
yearrequ
1. 2. 3. 4.
3. Whic
1.
2. 3. 4.
4. Whic
pres
1. Tc
2. T3. 4.
5. Whic
1. T2. 3. 4. A
D SEMESNMENT 2 (
the followr 4 for eac
historical c
Selling expConversioPurchasingAnswer 2 a
ew assessr. Which onuired?
Damaged Increases Increases None of th
ch of the fo
Property, revaluationInventory aProperty, pNone of th
ch of the sentation o
The classifclassificatiThe measuClassificatNone of th
ch of the fo
The lesseeLease termOwnershipAll of the a
TER 2012(20 marks)
wing multich question
cost of inve
penses. n cost. g cost. and 3 abov
sment of nene of the fo
inventoriesin selling cin selling p
he above.
ollowing st
plant andn model. are measuplant and e
he above.
following of financial
fication of on in the surement oftion of finanhe above.
ollowing w
e has the om represenp transferreabove.
) (24 minu
ple choicen answered
entories in
ve.
et realisabollowing do
s. cost. prices.
atements a
d equipme
ured at the equipment
is not a instrument
related intstatement of financial ncial instru
ill be class
option to punts most ofed to the le
utes)
e questiond.
ncludes:
ble value (oes not ind
are false?
ent can b
lower of ncan serve
requiremets in the fin
erest, dividof financialinstrument
uments und
sified as a f
urchase thf the econoessee at th
ns. Indicat
NRV) of indicate that
be measur
et realisab as securti
ent accordnancial sta
dends, lossl position.ts on the cder assets
finance lea
he asset. omic life ofhe end of th
te your ch
nventory ist a possible
red by th
ble value aniy for long-
ding to IAatements?
ses and pr
ost price th, liabilities
ase accord
f the asset.he lease te
hoice by o
s made in e NRV adj
e cost m
nd cost. -term loans
AS 32 (AC
rofits driven
hereof. and equity
ding to IAS
. erm.
FAC2601
only selec
each finanustment is
odel and
s.
C 25) for
n through t
y.
17 (AC 10
/101
35
cting
ncial s not
the
the
their
05)?
36
ASSIGNMENT 2 (continued) 6. Which of the following statements i.r.o. leases are false?
1. A lease agreement of land will normally be classified as a finance lease. 2. The duration of the finance lease is normally equal to the economic life of the asset. 3. To determine if a lease agreement is an operating lease or a finance lease, the
substance of the agreement must be considered and not the legal form thereof. 4. None of the above.
Answers in questions 7 to 8 must be calculated to the nearest rand. 7. Assume you invest R15 000 on 1 November 2000. The interest rate is 18% per annum
and interest is compounded quarterly in arrears. Which one of the following amounts represent the value of the investment at 31 October 2004?
1. R28 200. 2. R22 125. 3. R30 336. 4. None of the above.
8. Which one of the following amounts represents the present value of an annuity of
R25 300, received at the end of each period for five periods, at a discount rate of 10% per period?
1. R 12 650. 2. R139 150. 3. R 95 907. 4. None of the above.
9. On 31 March 2010, furniture with an original cost price of R100 000, and on which
R40 000 were already written off at the beginning of the financial year, were traded in at a loss of R5 000. Furniture is depreciated at 10% per year according to the straight-line method. The financial year ends on 30 June 2010.
Which of the following options represents the carrying amount of furniture sold that must
be disclosed in the property, plant and equipment note?
1. R52 500. 2. R55 000. 3. R50 000. 4. None of the above.
10. Profits and losses arising through fair value adjustments of financial assets classified as
fair value through profit and loss are recognised as follows:
1. Directly in equity. 2. In profit or loss. 3. Only option 1 and 2. 4. No adjustment is made in the financial records.
FIR
THIS ASAND D
-
ASRST AND
SSIGNMEDOES NO
STUDE
- FOR TDue
FOR THDue
SSIGNMED SECON
NT IS NOOT COUN
ENTS RE
THE FIRSe date: 25
HE SECONe date: 08
ENT 03:ND SEM
OT COMPUT ANY M
GISTERE
T SEMES5/04/2012
ND SEME8/10/2012
MESTER
ULSORY ARKS
ED:
STER 2
ESTER 2
FAC2601/101
37
38
QUESTION
SUBJECT
MARKS
MINUTES
1 Statement of comprehensive income and notes 30 36 2 Statement of comprehensive income and notes 25 30 3 Statement of changes in equity 20 24 4 Statement of changes in equity 26 32 5 Statement of financial position and notes 24 28 6 Statement of financial position and notes 30 36 7 Statement of changes in equity 26 32
8 – 11 Property, Plant and Equipment (PPE) (Study unit 9)
26
31
12
Financial Instruments (Study unit 8)
8
10
13 – 15
Property, Plant and Equipment (PPE) (Study unit 9)
32
38
16 – 22
Revenue (Study unit 5)
35
42
23
Operating Lease (Study unit 11)
18
22
24
Finance Lease (Study unit 11)
35
42
25
Finance Lease (Study unit 11)
16
19
26 Time value of money 44 53 27 Time value of money 25 30 420 505
QUESTI The folloended 2
RevenuCost of Other opDistributAdminisOther opRetaineLand at BuildingPlant anFurniturAccumu- Buildin- Plant a- FurnituInvestmLoan to Long-terIncome Addition 1. Inve - 40 0
of Svotethe not-h
- 30 0
of BThesR15
- 20 0
capidirecobta
ION 1 (30
owing bala8 February
e ..............sales .......perating intion cost ...
strative expperating exd earningsvaluation (
gs at cost ..nd machinee and equ
ulated deprngs ...........and machinure and eqents .........Bolo Limitrm loan ....tax expens
nal inform
estments co
000 OrdinaStud Limitee. These sh
shares wheld-for-tra
000 Ordinaolo Limitedse shares 0 000 on 2
000 Ordinatal of Mactors valueained for sp
marks) (36
ances werey 2006:
................
................come .......................
penses .....xpenses (ins (1 March (1 March 2................ery at cost ipment at creciation ................nery .........uipment ...................ted ...........................se ............
mation:
onsist of th
ary shares ed consistshares are twas R3 eading.
ary shares d consists
are trade28 Februar
ary sharesax (Pty) Limed the shpeculative
6 minutes
e extracted
................
................
................
................
................ncluding fin2005) ......
2005) ........................(purchase
cost (purch
................
................
................
................
................
................
................
he following
in Stud Lis of 400 0traded on
each on 2
in Bolo Liof 40 000
ed on the ry 2006.
s in Max (Pmited conshares at Rpurposes.
s)
d from the
................
................
................
................
................nance cos................................................
ed on 1 Mahased on 1
................
................
................
................
................
................
................
g:
mited at a000 ordinar
the JSE S28 Februa
mited at aordinary sJSE Secu
Pty) Limitesists of 2
R6 each o
books of
................
................
................
................
................t) .............................................................
arch 2004) 1 Septemb
................
................
................
................
................
................
................
cost of Rry shares
Securities Ery 2006. T
cost of Rshares of Rurities Exch
ed at a cos200 000 oron 28 Feb
Vula Limit
................
................
................
................
................
................
................
................
................
................er 2004) ..
................
................
................
................
................
................
................
120 000. Tof R1 eac
Exchange These sh
150 000. TR1 each. Ehange and
st of R120rdinary shbruary 200
ted for the
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
The issuedch. Each sand the mares are
The issuedach share d the mark
0 000. Thehares of R06. These
FAC2601
financial y
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
R 12 000 5 000
245 1 200 3 000 1 025 5 000 2 000 1 800 3 500
700
198 1 050
101 390 600
1 600 585
d share cashare has
market valuclassified
d share cahas one v
ket value
e issued shR1 each.
shares w
/101
39
year
000000000000000000000000000000000
000000500000000000800
pital one
ue of as
pital vote. was
hare The
were
40
QUESTION 1 (continued) 2. Other operating income consists of:
- dividends received from Bolo Limited ............................................................. - interest received on loan to Bolo Limited ........................................................ - dividends received from Max (Pty) Ltd ........................................................... - dividends received from Stud Limited ............................................................. - profit on sale of non-current asset ..................................................................
R 90 00045 00060 00040 00010 000
3. Administrative expenses consist of:
Printing and stationery ................................................................................... General expenses .......................................................................................... Salaries and wages ....................................................................................... Telephone ...................................................................................................... Auditors’ remuneration - Fees for audit ............................................................................................... - Expenses .....................................................................................................
R 800 000300 000
1 200 000610 000
75 00015 000
4. Key personnel of Vula Limited and Bolo Limited are as follows:
Chairman ...................................................................................... Managing director ......................................................................... Marketing director ......................................................................... Directors ....................................................................................... Accountant .................................................................................... Financial director .......................................................................... Marketing manager .......................................................................
Vula Ltd A B C
D and E F G H
Bolo Ltd G A -
F and I J E K
5. The following salaries were paid during the year:
Managing director ........................................................................Marketing director ........................................................................Financial director .........................................................................Accountant ...................................................................................Marketing manager ......................................................................Other ............................................................................................
Vula Ltd R
300 000180 000250 000190 000200 00080 000
Bolo Ltd R
200 000160 000200 000150 000120 00060 000
6. General expenses include amongst others the following: 6.1 Entertainment allowances of R24 000 and R12 000 paid to the managing directors of
Vula Ltd and Bolo Ltd respectively for the current financial year. 6.2 During the financial year the directors of Vula Ltd and Bolo Ltd each attended four board
meetings. The directors of Vula Ltd and Bolo Ltd received R1 000 and R800 each per meeting. The chairmen of the two companies received an additional R750 and R500 respectively per meeting.
QUESTI 7. Othe
loss 8. The Build Plan Furn 9. The
annu 10. The
ten annu
REQUIR Prepare 28 FebrPractice Only sh Ignore c
ION 1 (con
er operatinon sale of
non-curredings nt and macniture and e
loan to Bum.
long-term equal annum, is paya
RED:
the statemruary 2006.
how the no
comparative
ntinued)
ng expensef a non-cur
nt assets a
chinery equipment
Bolo Limite
loan was ual installmable bi-ann
ment of com6 in compl
ote on pro
e figures a
es include rrent asset
are deprec Ex 15
t 10
ed was ma
incurred oments starnually on 3
mprehensiiance with
ofit before
and the sta
depreciatit of R14 00
ciated at thxpected us5% per ann0% per ann
ade on 1
on 31 May rting 31 Au31 August a
ive incomeh the requi
tax.
tement of
on for the 00.
e followingseful econonum using num using
June 200
2001 andugust 2004and 28 Fe
e of Vula Lirements o
changes in
current fin
g rates: omic life of the straighthe reduci
05 at an in
the capita4. Interestbruary eac
Limited for of General
n equity. S
nancial yea
50 years ht-line methng balance
nterest rat
al portion ist, calculatech year.
the financly Accepte
how calcu
FAC2601
ar as well a
hod e method
te of 10%
s repayabled at 15%
ial year ened Accoun
lations.
/101
41
as a
per
le in per
nded nting
42
QUESTION 2 (25 marks) (30 minutes) The following balances were extracted from the books of Last Resort Limited for the financial year ended 29 February 2008:
Total sales (including VAT at 14%) ................................................................ VAT paid ........................................................................................................ Cost of sales .................................................................................................. Administrative expenses Bank charges ............................................................................................. Salaries and wages .................................................................................... Advertising ................................................................................................. Auditors’ remuneration - Fees for audit ........................................................................................... - Expenses ................................................................................................. Distribution cost .............................................................................................. Other operating expenses (including finance cost and depreciation) ............. Other operating income .................................................................................. Provisional tax paid ........................................................................................ Proceeds on sale of motor vehicle ................................................................. Preliminary expenses ..................................................................................... Equipment at carrying amount ....................................................................... Motor vehicles at cost .................................................................................... Accumulated depreciation: Motor vehicles ..................................................... Investments .................................................................................................... Long-term loan (Cr) ........................................................................................ Income tax expense .......................................................................................
R 7 980 000
840 0002 800 000
12 0002 000 000
110 000
40 0008 000
268 000370 00038 000
480 00085 000
7 50048 000
240 00060 000
370 00090 000
421 950 Additional information: 1. VAT for January and February 2008 will be paid on 25 March 2008. 2. Included under salaries and wages are the following payments to top management:
Salaries - Managing director ........................................................................................ - Chairman of the directory ............................................................................. - Marketing manager ...................................................................................... - Financial director .......................................................................................... Travelling allowance – Managing director .......................................................... Entertainment allowance – Marketing manager ................................................. Pension payments - Managing director ........................................................................................ - Chairman .....................................................................................................
R
240 000120 000180 000200 00012 000
6 000
24 00012 000
The top management were paid R5 000 each for attending directors’ meetings. 3. The long-term loan was incurred on 1 January 2002 and the capital portion is repayable
in five equal annual installments starting 31 August 2006. Interest is calculated at 15% per annum and is payable at the end of each financial year.
QUESTI 4. Othe
Dividend - Only - SmaInterest r
The issuR2 each Last RespurchasSecuritieThe marmade repurpose 5. The Moto Equ One
sold All t
equi REQUIR 1. Prep
yearAcce
2. Show
Resorequ
ION 2 (con
er operatin
s receivedResort (Pt
rt Resort Lreceived fro
ued ordinah). Last Re
sort Limiteed for R2es Exchanrket value egarding ths.
non-curre
or vehiclesipment
e of the mo on 31 Aug
the equipmpment occ
RED:
pare the str ended 2epted Acco
w the noteort Limite
uirements o
ntinued)
ng income c
d from the fty) Limited
Limited ......om Only R
ary share csort Limite
ed owns 10250 000. Tge and theon 29 Febhe increas
nt assets a
s - 20%- 20%
otor vehiclegust 2007.
ment was curred sinc
tatement o29 Februaounting Pra
e on profitd for theof General
consists of
following cd ...............................
Resort (Pty
capital of ed owns 12
00 000 of The sharee market vbruary 200sed marke
are deprec
% per annu% per annu
es with a c
purchasece then.
of comprehry 2008 actice. Ign
before taxe financial ly Accepte
f:
companies................................) Limited ..
Only Reso2 000 share
the 2 400 es of Smavalue per s8 was R3
et value. T
ciated at th
m using thm using th
carrying am
d on 1 M
hensive incin compliaore compa
x for the syear end
ed Account
: ................................................
orts (Pty) es in Only
000 issueart Resort share was per share
These shar
e following
he reducinghe straight-
mount of R
March 2005
come of Laance witharative figu
statement ded 29 Fting Practic
................
................
................
Ltd is R40Resort (Pt
ed shares Limited a
R2,50 eacand no ad
res were o
g rates and
g balance m-line metho
R80 000 on
5 and no
ast Resort the requres. Show
of compreFebruary 2ce.
................
................
................
0 000 (shaty) Ltd.
in Smart Rare tradedch on 28 Fdjustmentsobtained fo
d methods:
method od
n 28 Febru
sales or
Limited fouirements
w all calcula
ehensive in2008 acco
FAC2601
.......
.......
.......
R
12 20
6 38
ares issue
Resort Limd on the JFebruary 20s has yet bor specula
:
uary 2007
purchases
or the finanof Gene
ations (1
ncome of Lording to
(1
/101
43
R
000000000000
d at
mited JSE 007.
been ative
was
s of
ncial rally 13)
Last the
12)
44
QUESTION 3 (20 marks) (24 minutes) The following information appear, inter alia, in the books of Vision Limited on 28 February 2006 Land at valuation ...................................................................................................Share capital – ordinary shares ............................................................................10% Cumulative preference shares ......................................................................12% Non-cumulative preference shares ...............................................................Share issue expenses ...........................................................................................Surplus on revaluation of non-current assets ........................................................Reserve for increased replacement cost of non-current assets ............................15% Long-term liability ..........................................................................................Retained earnings (1 March 2005) ........................................................................Profit for the year ...................................................................................................
R 3 000 0001 500 000
300 000550 00025 000
500 000250 000
1 400 000350 000800 000
Additional information: 1. The land was revalued at replacement value on 30 November 2005 for R4 000 000 by
Mr Value, a sworn appraiser, but no entry has as yet been passed in the books to record this.
2. Vision Limited was incorporated with an authorised share capital of: 2 000 000 Ordinary shares 500 000 10% Cumulative preference shares 300 000 12% Non-cumulative preference shares 300 000 14% Redeemable preference shares 3. The issued share capital of Vision Limited consists of: 1 200 000 Ordinary shares 200 000 10% Cumulative preference shares issued during 2002 275 000 12% Non-cumulative preference shares issued on 31 May 2003 4. The following decisions were made by the directors on 28 February 2006 and must still
be recorded in the following order: 4.1 Capitalisation shares must be issued to the ordinary shareholders in the ratio of one
ordinary share at R1,25 for every 6 ordinary shares held. 4.2 Share issue expenses must be written off against retained earnings. 4.3 The reserve for increased replacement cost of non-current assets must be increased to
R340 000. 4.4 An ordinary dividend of 10c per share was declared. No dividends were declared by the
company during the previous financial year. 5. The long-term liability was incurred in 2000 and the capital portion is repayable in
15 equal annual installments starting 1 January 2006. REQUIRED: Prepare the statement of changes in equity of Vision Limited for the financial year ended 28 February 2006 according to Generally Accepted Accounting Practice. Show calculations.
QUESTI The foll30 June
OrdinaryCumulatReserveProceedRetaineProfit fo12% LonLand at BuildingMachineFurniturAccumu - Build - FurnInventorShare isTrade aCash anInvestm Addition 1. Trio 800 250 100 2. The
on 1 3. The
reco 3.1 Cap
ordinordincom
3.2 Sha 3.3 Rese 4. The
equaover
ION 4 (26
lowing info2006:
y share cative preferee for replacds of 40 00d earningsr the year .ng-term loacost ........
gs at cost ..ery at carrye and equ
ulated deprdings .......niture and ry .............ssue expennd other re
nd cash eqents .........
nal inform
Limited wa000 Ordin000 12% C000 5% R
company January 2
following orded in th
italisation nary sharenary divide
mpany did n
re issue ex
erve for re
long-term al annual ir fixed prop
marks) (32
ormation
pital - 1 Juence sharecement of n00 ordinarys (1 July 20................an ............................................ying amounipment at creciation ................equipment................nses .........eceivablesquivalents .................
mation:
as incorpoary sharesCumulative
Redeemable
did not iss2006 12 50
decisions e followin
shares me at R1,20 end of 20cnot declare
xpenses m
placement
loan was nstallmentperty.
2 minutes
appears,
uly 2005 (ise capital ...non-curren
y shares iss005) .........................................................................nt .............cost..........
................t ............................................... ...............................................
orated with s e preference preferen
sue any pre00 cumulat
were madng order:
ust be issfor every 8
c per sharee any divide
must be writ
t of non-cu
incurred dts starting
s)
amongst
ssued at R................
nt assets (1sued on 31................................................................................................................
................
................
................
................
................
................
................
an authori
ce sharesce shares
eference stive prefere
de by the d
sued to the8 ordinary e was decends durin
tten off aga
urrent asse
during 20030 April 20
others, in
1,20 each)................1 July 20051 March 20................................................................................................................
................
................
................
................
................
................
................
ised share
shares durience share
directors o
e ordinaryshares helared. Thisg the prev
ainst retain
ets must be
0 and the 006. The lo
n the boo
) ...............................5) .............006 ..........................................................................................................................
................
................
................
................
................
................
................
e capital of:
ing the prees were iss
on 30 June
y shareholdld. After ths decision vious financ
ned income
e increased
capital pooan is sec
oks of Tri
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
:
evious finasued at R4
e 2006 and
ders in thehe capitalis
was madecial year.
e.
d with R70
rtion is repcured by a
FAC2601
o Limited
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
......
R432 200 20 56 80
200 80
100 500 225 100
30 42 80 16 65 71
120
ncial year,4,08 each.
d must stil
e ratio of sation issuee because
0 000.
payable in first mortg
/101
45
on
000000000000000000000000000000000
000600200000400000000
, but
ll be
one e an
e the
five gage
46
QUESTION 4 (continued) 5. Land and buildings are situated on erf 3510, George, and consist of an office block. The
land was revalued at replacement value on 31 October 2005 for R150 000 by Mr Black, a sworn appraisor, but no entry has as yet been passed in the books to record this. Buildings are depreciated at 2% per annum according to the straight-line method.
6. All the machinery was purchased on 1 July 2004. The company provides for depreciation
on machinery at 25% per annum on the diminishing balance method. No sale of machinery occurred since date of purchase.
7. Furniture and equipment is depreciated on the straight-line method over a period of
5 years. On 31 March 2006 an old computer which originally cost R5 000 and on which R3 000 accumulated depreciation was written off at the beginning of the financial year, was traded in for a new computer at a cost of R15 000. The new computer has an estimated scrap value of R3 000, while the remaining furniture and equipment have no residual value.
8. Investments consist of the following: 8.1 15 000 Ordinary shares in Reds Limited at a cost of R60 000. The issued share capital of
Reds Limited consists of 20 000 ordinary shares. Each share has one vote. These shares are traded on the Johannesburg Securities Exchange and the market value was R4 each on 30 June 2006.
8.2 50 000 Ordinary shares in Bulls Limited at a cost of R50 000. The issued share capital of
Bulls Limited consists of 750 000 ordinary shares. Each share has one vote. These shares are traded on the Johannesburg Securities Exchange and the market value on 30 June 2006 was R2 per share. This investment was designated as financial asset held at fair value through profit or loss.
8.3 10 000 Ordinary shares in Blue (Pty) Limited at a cost of R10 000. The issued share
capital of Blue (Pty) Limited consists of 100 000 ordinary shares. The directors valued the shares at R1,50 on 30 June 2006. This investment was designated as not-held-for-trading.
Any fair value adjustments must still be accounted for. REQUIRED: Prepare the statement of changes in equity of Trio Limited for the financial year ended 30 June 2006 according to the requirements of Generally Accepted Accounting Practice. Ignore comparative figures. Show all calculations.
QUESTI REQUIR Use the 5.1 The 5.2 The 5.3 The Your anPractice QUESTI The follo Land at BuildingPlant anFurniturAccumu- Plant a- FurnituInvestmProvisioBank ovOrdinary6% Cum8% NonRetainePreliminShare is10% LonProfit (foLoan to Trade aInventorTrade a Addition 1. The 2 50 1 00 1 50 1 50
ION 5 (24
RED:
informatio
note relati
note on pr
asset sect
nswers m. Ignore co
ION 6 (30
owing bala
cost ........gs at cost ..nd machinee and equ
ulated deprand machinure and eqents .........
onal tax payverdraft .....y share ca
mulative pren-cumulativd earnings
nary expenssue expenng-term loaor the curreQuattro Ltnd other reries ..........nd other p
nal inform
authorised00 000 Ord00 000 10%00 000 6% 00 000 8%
marks) (28
on given in
ing to the l
roperty, pla
tion of the
ust compomparative
marks) (36
nces were
................
................ery at carryipment at creciation nery (1 Juluipment (1................yments ....................pital .........eference s
ve preferens (1 July 20ses ..........nses .........an ............ent year) btd (repayabeceivables................ayables ...
mation:
d share cadinary shar% Redeem
CumulativNon-cumu
8 minutes
question 5
ong-term l
ant and eq
statement
ly with the figures, b
6 minutes
e extracted
................
................ying amouncarrying am
y 2005) ....1 July 2005................................................................
share capitnce share c005) .........................................................
before tax able 30 Jun ...............................................
pital of theres able prefe
ve preferenulative pref
s)
5 to do the
iability at 3
quipment a
t of financia
he requirebut show al
s)
from the b
................
................nt (1 July 2mount (1 J
................5) .............................................................................tal .............capital ......................................................................and deprece 2010) ...................................................
e company
rence sharnce sharesference sh
following i
30 June 20
t 30 June 2
al position
ments of ll calculatio
books of P
................
................2005) .......uly 2005) .
................
................
................
................
................
................
................
................
................
................
................
................ciation ......................................................................
is as follow
res s ares
in the book
006.
2006.
as at 30 J
Generallyons.
urco Limite
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ws:
ks of Trio L
une 2006.
y Accepte
ed at 30 Ju
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FAC2601
Limited:
ed Accoun
une 2006:
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
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..
..
R 1 000 1 878 2 432
400
768 200 400 80
675 3 000
500 300 800 30 12
1 000 1 000
150 748 950 133
/101
47
nting
000400000000
000000000000000000000000000000000000000000500000400
48
QUESTION 6 (continued) 2. The issued share capital of the company is as follows: 1 500 000 Ordinary shares 500 000 6% Cumulative preference shares issued on 1 July 2000 600 000 8% Non-cumulative preference shares issued on 1 April 2006 3. 500 000 Ordinary shares were issued on 31 March 2006 at R2 per share. 4. The following transactions have not yet been recorded and should be done in this order: 4.1 Land was revalued on 1 May 2006 at replacement value for R1 500 000 by Mr Value, a
sworn appraiser. 4.2 Tax for the current year amounts to R161 150. 4.3 Preliminary and share issue expenses must be written off against retained income. 4.4 A capitalisation issue must be done of one ordinary share at R2 for every ten ordinary
shares held. 4.5 Ordinary dividends of 5 cents per share were declared on 30 June 2006. No dividends
were declared or paid by the company during the previous financial year. 5. The following information regarding property, plant and equipment is available: 5.1 All the machinery was purchased on 31 March 2004 for R3 000 000. Installation costs
amounted to R200 000. The company provides for depreciation on machinery at 20% per annum on the reducing balance method. During the current financial year all the machinery was withdrawn from the production process for a period of 3 months and used in the construction of the buildings. No sales or purchases transactions took place during the current financial year. The following direct cost relating to the buildings was debited to buildings:
Labour R 678 400 Material R1 200 000 5.2 Land and buildings, consisting of factory buildings and offices in Sunward Park, Erf 323,
are owner occupied. The building was completed on 2 January 2006 and is depreciated at 2% per annum using the straight-line method.
5.3 On 31 March 2006 furniture and equipment with a cost price of R100 000, that had been
depreciated by R40 000 up to the beginning of the financial year, was traded in at a loss of R5 000 as part payment for new equipment costing R80 000. Furniture and equipment are depreciated at 10% per annum on the straight-line method.
6. Investments consist of the following: 6.1 120 000 Ordinary shares in Quattro Limited at a cost of R200 000. The issued share
capital of Quattro Limited consists of 200 000 ordinary shares of R1 each. Each share has one vote. The market value of the investment was R200 000 on 30 June 2006.
QUESTI 6.2 20 0
capisharJoha30 Jpurp
6.3 70 0
of Ssharmarkinve
7. Inve
RawWorFinis
REQUIR Prepare notes ofAccepteShow al QUESTI REQUIR Use the Purco LiAccepte QUESTI 8. Wha 9. Give 10. Give
desc(AC
ION 6 (con
000 Preferetal of Thakres. Each annesburgune 2006
pose of sel
000 Ordinaugar Limitres of Sugket value ostment hel
entories at
w materialsrk in progreshed good
RED:
the “Assef Purco Limd Accountl calculatio
ION 7 (26
RED:
informatioimited for td Account
ION 8 - 11
at are the e
e four exam
e two exacribe the 123).
ntinued)
ence sharekalaka Limshare has Securitiesamountedling or rep
ary shares ted consistgar Limitedon 30 Juneld for tradin
30 June 20
s ...............ess ...........ds .............
et” sectionmited as aing Practic
ons.
marks) (32
on given inthe year ening Practic
(26 marks
elements o
mples of co
mples of accounting
es in Thakmited consis one votes Exchangd to R2,50urchasing
in Sugar Lts of 4 000
d are tradee 2006 amng in the b
006 consis
................
................
................
n of the stat 30 Junece. Ignore
2 minutes
n questionnded 30 Juce. Show a
s) (31 min
of the cost
osts that ar
the derecg treatmen
kalaka Limists of 30 . The sha
ge and theeach. Theit in the ne
Limited at a0 000 ordied on the J
mounted to books of Pu
sted of:
................
................
................
atement oe 2006 to comparativ
s)
n 7 to preune 2006 tall calculati
nutes)
of an asse
re not cost
cognition ont of such
ited at a c000 ordinares of Tha
e market vese sharesear term.
a cost of Rnary shareJohannesbR3 each.
urco Limite
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of financialcomply w
ve figures
epare the sto comply wons.
et (PPE item
ts of a PPE
of the carrh a loss o
cost of R60ary sharesakalaka Limvalue of ths were acq
R140 000. Tes. Each sburg SecuThis inves
ed.
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position, with the req
and the no
statement with the re
m) in terms
E-item.
rying amoor profit a
0 000. Thes and 30 0mited are e preferenquired prin
The issuedshare has rities Exch
stment is re
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as well asquirementsote on acco
of changeequirement
s of IAS 16
unt of a Pas prescrib
FAC2601
e issued sh00 preferetraded on
nce sharesncipally for
d share caone vote.
hange andegarded as
..
..
..
R 300 400 250
s the relevs of Geneounting po
es in equitts of Gene
6 (AC 123)
PPE-itembed in IAS
/101
49
hare ence the s on r the
pital The the s an
000000000
vant rally
olicy.
ty of rally
)? (6)
(6)
and S 16
(4)
50
QUESTION 8 - 11 (26 marks) (31 minutes) 11. Give a short description of the following under revaluation methods in order to comply
with IAS 16 (AC 123):
(a) Change in accounting policy (2) (b) Residual value (2) (c) Estimated useful life (2) (d) Determination of replacement value (4)
QUESTION 12 (8 marks) (10 minutes) Describe two methods how the gain or loss arising from a change in the fair value (market value) of a financial asset shall be recognised and give the journal entry of each method. QUESTION 13 (10 marks) (12 minutes) The following information applies to the machinery of X Limited: Cost price of equipment (purchased 1 January 20.0) R100 000 Accumulated depreciation on 31 December 20.1 R20 000 Expected useful life (straight-line method) 10 years Financial year end 31 December At the beginning of 20.2 the equipment was revalued at a net replacement value of R120 000. REQUIRED: Journalise the revaluation of the machinery in the records of X Limited according to the net replacement value basis in accordance with IAS 16(AC 123).35. QUESTION 14 (10 marks) (12 minutes) The following information relating to assets are supplied to you:
Cost of asset (purchased 01/01/20.1) Accumulated depreciation on 31/12/20.4
R 100 000(40 000)
Carrying amount 31/12/20.4 60 000
Expected useful life (straight-line method)
10 years The net replacement value on 01/01/20.5 R 90 000 It is company policy to revalue assets on the net replacement value basis. REQUIRED: Journalise the revaluation of the asset according to the net replacement value basis in accordance with IAS 16(AC 123).35.
QUESTI The netbeginni The ass Accumu The ass The net REQUIR Journalisaccorda QUESTI Answer 16. Wha 17. Wha 18. How 19. Whe 20. Whe
good (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
ION 15 (12
t replacemng of fina
et was orig
lated depr
et is depre
replaceme
RED:
se the revnce with IA
IONS 16 -
the followi
at is the de
at is disclos
w will reven
en will reve
en will reveds in the fo
Bill and HGoods shLay awayOrder whheld in inSale andSales to Subscript
InstalmenReal esta
2 marks) (
ment valuncial year
ginally purc
reciation on
eciated on
ent value o
valuation oAS 16 (AC
22 (35 ma
ng in acco
efinition of r
sable in re
nue be mea
enue be rec
enue be rollowing ca
Hold sales hipped suby sales hen paymeventory repurchasintermediations nt sales ate sales
14 minute
ue of ther).
chased for
n the date
the straigh
of the asset
of the ass123).
arks) (42 m
ordance to
revenue?
spect of re
asured?
cognised?
recognisedases:
bject to con
ent is receiv
se agreemate parties
es)
following
r R180 000
of revaluat
ht-line basi
t on 1 Janu
set accord
minutes)
IAS 18 (AC
evenue in f
d in accord
nditions
ved in adva
ents
g asset is
0 on 1 Janu
tion is R30
s over the
uary 20.3 i
ding to the
C 111):
financial st
dance with
ance for go
given on
uary 20.2.
0 000.
expected
is R160 00
e net repla
tatements?
h IAS 18 (
oods not p
n revaluat
useful life
00.
acement v
?
(AC 111) o
presently
FAC2601
tion date
of 6 years
value basi
on the sal
/101
51
(at
.
s in
(3)
(4)
(2)
(2)
e of
(1) (3) (1)
(1) (1) (1) (1) (2) (1)
52
QUESTION 16 - 22 (continued) 21. When will revenue be recognised in accordance with IAS 18 (AC 111) on the rendering
of services in the following cases? (i) Installation fees (1) (ii) Service fees included in price of product (1) (iii) Advertising commissions (2) (iv) Insurance agency commissions (1) (v) Admission fees (1) (vi) Tuition fees (1) (vii) Initiation, entrance and membership fees (1) (viii) Franchise fees (1) (ix) Development of customized software (1) 22. When is the revenue in respect of license fees and royalties recognised in terms of IAS 18 (AC 111)? (2) QUESTION 23 (18 marks) (22 minutes) The preliminary Statement of Comprehensive Income before taking into account any additional information of Salsa Limited, a dealer in motor vehicles for the year ended 28 February 19.7 is as follows:
19.7 R
Income Sales of motor vehicles Dividends received (unlisted)
1 780 00013 500
Expenses 1 793 500
(1 414 300)
Advertising Cleaning Commission paid to sales staff Depreciation – workshop equipment Depreciation – office equipment Operating lease – premises
9 0004 500
23 60011 20015 00049 000
Initial payment Payments for the year
9 00040 000
Printing and stationery Purchases – consumables Purchases – motor vehicles Salaries and wages Loss on a litigation settlement (tax deductible)
11 00066 000
1 068 00072 00085 000
PROFIT FOR THE YEAR 379 200OTHER COMPREHENISIVE INCOME - TOTAL COMPREHENSIVE INCOME FOR THE YEAR 379 200
QUESTI Addition 1. Sals
presof th
Initia Insta Dura 2. Sals 3. The
28 F
REQUIR Prepare 28 Febru1973 anrequired QUESTI The folloagreeme Date Cas Leas Paym
The macat 20% p The com REQUIR a) Calcb) Prepc) Jour
Jour
ION 23 (co
nal inform
a Limited ently occue lease are
al paymentallment peration of the
a Limited p
SA NormFebruary 19
RED:
the notesuary 19.7. nd Generad.
ION 24 (35
owing detaent:
e of commeh price – Rse period iments of R
chine was per annum
mpany’s fin
RED:
culate the npare an amrnalise all rnal narrati
ontinued)
mation:
entered iupying. The as follow
t r month e lease
paid comm
mal tax rate9.7 is R125
s to the an Your ans
ally Accept
5 marks) (4
ails relate t
encement R180 000 s 3 year
R43 500 ar
available fm on cost.
ancial yea
nominal intmortisation
relevant trions are no
nto an ophe lease agws:
R9 000 R5 000 3 years
mission of R
e is 29%. 5 100.
nnual finanswer must ted Accou
42 minute
to a mach
of agreem
re payable
for use and
ar ends on
terest rate table. ransactionot required
perating legreement w
R7 200 to e
Salsa Lim
ncial statecomply w
unting Prac
es)
ine acquire
ment – 1 Ju
half-yearly
d put into u
30 June.
per year.
s (cash trd.
ease agreewas entere
enter into t
mited’s tax
ements of with the reqctice. The
ed by Mel
ly 20.3
y in arrears
use on 1 Ju
ansactions
ement for ed into on
the lease a
xable inco
Salsa Limquirements
accountin
ba Ltd in t
s.
uly 20.3. D
s included)
the prem1 July 19
agreement
ome for th
mited for ths of the Cong policy n
terms of a
Depreciatio
) over the
FAC2601
mises they .6. The te
.
e year en
he year enompanies notes are
finance le
on is written
lease per
/101
53
are erms
nded
nded Act, not
ease
n off
riod.
54
QUESTION 25 (16 marks) (19 minutes) Luxury Travel Limited, a newly established car rental company based in Cape Town, entered into a finance lease agreement to acquire two new limousines which will make up their entire current limousine fleet. The following information is available: Contract date 1 January 20.1 Total cash price of the vehicles R1 600 000 Deposit 20% of cash price Installments – paid half yearly in arrears R228 050 Date of first instalment 30 June 20.1 Lease period 4 years Nominal interest rate 17,25% (fixed rate) per annum Effective interest rate 17,99% per annum Total scrap value of the vehicles R200 000 Estimated useful life 5 years
Luxury Travel Limited paid commission of R16 000 to enter into the lease agreement. The two limousines were docked at Cape Town harbour on 2 January 20.1 and put into immediate use. Depreciation is written off over their expected useful lives according to the straight-line method. Luxury Travel Limited’s profit before tax, before taking the lease into account, amounted to R950 000 for 20.1. Classic Bank financed the deal and provided you with the following correct amortisation table:
Date
Interest
R
Capital
R
Installments
R
Outstanding balance
R 01/01/2001 30/06/2001 31/12/2001 30/06/2002 31/12/2002 30/06/2003 31/12/2003 30/06/2004 31/12/2004
- 110 400 100 253 89 230 77 257 64 251 50 123 34 777 18 109
- 117 650 127 797 138 820 150 793 163 799 177 927 193 273 209 941
- 228 050 228 050 228 050 228 050 228 050 228 050 228 050 228 050
1 280 000 1 162 350 1 034 553 895 733 744 940 581 141 403 214 209 941
- REQUIRED: Disclose all the relevant notes concerning the lease in the annual financial statements of Luxury Travel Limited for the year ended 31 December 2001. Your answer must comply with the requirements of the Companies Act, and Generally Accepted Accounting Practice. Ignore the accounting policy notes, comparative figures and all taxation implications. Do all calculations to the nearest Rand.
QUESTI This queto two-te 26.1 D
pe 26.2 D
pe 26.3 D
be 26.4 D
of 26.5 A 26.6 C
an 26.7 A
pa 26.8 C
9 26.9 A
an REQUIR Calculat 26.10 A
co REQUIR Calculat 26.11 A
is REQUIR How lon
ION 26 (44
estion consenths (2/10
Determine teriod for te
Determine teriod for te
Determine ears intere
Determine tf 7% per a
At what rate
Calculate thnd interest
An amount ayable mo
Calculate amonths.
Assume yound interest
RED:
te the value
Assume yoompound i
RED:
te the pres
Assume yous payable m
RED:
g will it tak
4 marks) (5
sists of 13 0) of a perc
the presenen periods,
the future en periods,
the effectiest at a nom
the nominannum, if in
e of interes
he effectivet is compou
of R2 00onthly in arr
t what rat
u invest R2t is compou
e of the inv
u invest Rnterest pe
ent value o
u invest R2monthly in
ke to doubl
53 minute
independecent (%). S
nt value of, at a disco
value of , at an inte
ive interesminal rate
al interest nterest is co
st would an
e rate of inunded qua
00 is invesrears. How
e of intere
20 000 on unded qua
vestment a
R5 000 perr annum.
of the inve
2 500 nowarrears.
e the inves
es)
ent sub-quShow all yo
f an annuiount rate of
an amounerest rate o
st rate for of 5% per
rate for a lompounde
n investme
nterest wharterly.
sted at a w long will
est will R3
1 Novembarterly in ar
at 31 Octob
r annum fo
stment.
w at a nomi
stment?
uestions. Aour working
ty of R30 f 10% per
nt of R40 0of 10% per
r a buildinannum, co
loan whiched half-yea
nt be triple
hen the no
nominal init take to t
3 000 incre
ber 19.9. Trrears.
ber 20.4.
or 5 years
nal interes
Answers mugs and form
000, receperiod.
000, invesperiod.
g society ompounded
h bears intearly.
ed over a p
minal rate
nterest rattriple the am
ease to R9
The interes
s at the en
st rate of 1
ust be calcmulas.
ived at the
sted at the
savings ad monthly.
erest at an
period of 12
of interes
te of 18%mount inve
9 435 afte
t rate is 18
nd of each
5% per an
FAC2601
culated cor
e end of e
e end of e
account w
n effective
2 years?
st is 18% p
p.a., inteested?
r 6 years
8% per ann
h year at 1
nnum. Inte
/101
55
rrect
each
each
hich
rate
p. a.
erest
and
num
15%
erest
56
QUESTION 26 (continued) 26.12 A person wishes to have R100 000 at the end of 10 years. How much must he invest at the end of each year (at 15% per annum) for the
amounts to accrue to R100 000? (Ignore taxation). 26.13 A person borrows R4 000 for 4 years at 16% interest and undertakes to repay this
debt in three equal payments of R1 000 at the end of years 1, 2 and 3 and a final payment at the end of year 4.
What will the amount of the final payment be? (Ignore taxation).
QUESTION 27 (25 marks) (30 minutes) Do the necessary calculations to answer the following questions (choose only A, B, C, or D). Do all calculations to the nearest R1 or 1 decimal place, except where indicated otherwise. (a) The present value of an annuity of R2 000 per annum for 6 years at 8% compounded
interest per annum is:
A. R 1 260 B. R14 672 C. R 9 246 D. None of the above.
(b) The effective rate of interest when the nominal rate of interest is 18% per annum and
interest is compounded monthly is:
A. 15,0% B. 19,6% C. 12,7% D. None of the above.
(c) R2 000 will increase to R4 178 after 6½ years at a rate of:
A. 14% B. 12% C. 18% D. None of the above.
(d) Buli must repay his study loan on 30 November 20.4. He will have to repay R40 000. His
best friend who won the Lotto decided to repay the loan on his behalf on 30 November 20.1. The interest rate on the loan is 16% and interest is compounded quarterly. The amount that Buli’s friend has to pay now, if calculations are done to the nearest R100, is:
A. R25 600 B. R22 100 C. R25 000 D. None of the above.
QUESTI (e) An a
comrepa
A. B. C. D.
(f) Ms Dchildwhanear
A. B. C. D.
(g) Wha
annu
A. 2B. C. D.
ION 27 (co
amount of mpound inteayable at th
R2 487 R3 310 R3 300 None of th
Dodo decidd’s first birtt amount wrest Rand.
R66 900 R54 719 R49 561 None of th
at will the um and int
20,250% 15,025% 16,160% None of th
ontinued)
R1 000 iserest per ahe end of t
he above.
des to savthday onwwill be ava)
he above.
effective rterest is co
he above.
s invested annum. Ththe term is
ve for her dard, puts aailable on
rate of inteompounded
annually ahe compou:
daughter’saway R1 2her daugh
erest be wd quarterly
at the endund amoun
s higher ed200. If she hter’s eight
hen the noy?
d of each ynt of the o
ducation, areceives 1
teenth birth
ominal rate
year for 3 ordinary an
and every y10% interehday? (Ro
e of intere
FAC2601
years at 1nnuity whic
year, fromest per annound off to
est is 16%
/101
57
10% ch is
the num, o the
per
58
9 EXAMINATIONS
Use your my Studies @ Unisa brochure for general examination guidelines and examination preparation guidelines. Information regarding the examination At the end of the semester you will be required to write a two hour examination. Start every question on a new (separate) page. When answering a question, always read what is required before reading through all the information. This will enable you to know immediately what information is needed to answer the question. If you read through the question in its entirety without knowing what is required, you will have to reread the information and waste time in this manner. If you obtain between 40% and 49% as a final mark, you will be allowed to write a supplementary examination. The supplementary examination will be written at the end of the following semester. To pass this supplementary examination, you must obtain at least 50% in the examination itself. This means that if you qualify for a supplementary exam in May 2012 you will write the FAC2601 second semester paper in October 2012. Students who qualify for a supplementary examination in October 2012 will write the FAC2601 paper in May 2013. A student may, however, write only one supplementary examination per enrolment. If you qualify for a supplementary examination, no further study material will be supplied to you during the following semester. You must not submit any assignments. All supplementary students may still contact their lecturers if they have any queries or problems. Due to various reasons the lecturers cannot send, fax or e-mail previous year’s exam papers or assignments and solutions and we would appreciate it if you will not contact us in this regard. You are advised to consult the time-table timeously in order to plan your final revision programme accordingly. Please start early to avoid cramming at the last moment. Ensure that you have received all assignment solutions at least two weeks before the examination. No solutions will be faxed to students in the 14 days prior to the examination. Solutions are available on myUnisa system of UNISA’s webpage.
10 OTHER ASSESSMENT METHODS None 11 FREQUENTLY ASKED QUESTIONS The my Studies @ Unisa brochure contains an A-Z guide of the most relevant study
information.
12
GENE
In spitcomprecome aenable With be Mr G J Miss CMr C J Mr F MMr C MLECTU
ERAL
e of the cehensible across suc
e us to mak
est wishes
Steyn C S Grondt
Els MontgomeryMkefa URERS: A
care takenand free fr
ch matters,ke the nece
y
ACCOUNT
n to ensurrom errors, or mattersessary cor
TING 2 - F
re that stus and omiss which arerrections.
FAC2601
dy guidessions, disce not clear
s, assignmcrepanciesrly express
ments, and s may occused, kindly
FAC2601
solutions ur. Should let us know
/101
59
are you w to
60
13 ANNEXURE A: ASSUMED KNOWLEDGE
It is assumed that students have knowledge to do some elementary calculations. Some of these are discussed in the following paragraphs, in order to help those students who wish to acquaint themselves with the relevant subjects.
13.1 Basic calculations
To calculate a percentage of an amount or number e.g. 13% of R3 900. The 13% actually means 13 out of 100, or 13 ÷ 100; and the word “of“ means “multiply by”. Therefore: 13% of R3 900 can be read:
13 ÷ 100 x R3 900 = R507,00 or, when using a pocket calculator: 3 900 x .13 = 507.00. (By using the factor of “.13”, you have already divided the 13 by 100. All percentages can be used in this manner.)
To relate the price of a number of items to a single item e.g. R39,52 paid for 13 items, one item will cost R39,52 ÷ 13 = R3,04. This amount can then be used to calculate the price of another number of articles of the same calibre, e.g. 27 items will cost 27 x R3,04 = R82,08.
13.2 Interest Interest is in effect the payment for the use of somebody else’s money and is therefore the “price” of money or a finance cost. Interest can be receivable (e.g. interest on investments) or it can be payable (e.g. interest on loans, bonds or debentures). To calculate interest, one needs:
The amount involved, The interest rate at which it is invested/borrowed, and The period for which it is invested/borrowed.
Whenever a period is involved, students can consider using a “time-line” which may help in
the calculation. A time-line can be prepared as follows: (a) Information:
Amount invested (or borrowed) R12 000 Interest rate 10,5% Period: 1 May 20.1 to 31 December 20.1 = 8 months.
1 May 20.1 31 Dec 20.1
Period: 8 mths
Interest rate: 10.5%
Total period = 8 months (or 2/3 of a year = 0,6667 yr).
(b) Info
1 M
Tot
Examp 1. Pe
AmIntePe Ca OROROR
2. Pe AmIntePe Ca OROROR
ormation: AmountInterest Period:
May 20.0
PerioInteres
tal period =
ples:
riod shorte
mount inveserest rate riod: 1 May
alculation o
R1R: R1R: R1R: R1
riod longer
mount inveserest rate riod: 1 May
alculation o
R1R: R1R: R1R: R1
t invested (rate 1 May 20
od: 8 mths
st rate: 10.5
= 20 month
er than one
sted (or bo
y 20.0 to D
of interest:
2 000 x 102 000 x 0,2 000 x 0,2 000 x 0,
r than one
sted (or bo
y 20.0 to 3
of interest:
2 000 x 102 000 x 0,2 000 x 0,2 000 x 0,
(or borrow
.0 to 31 De
31 Dec 01 Jan
s 5%
hs (or 1 an
e year:
orrowed)
Dec 20.1 =
0.5 ÷ 12 = 105 x 8 ÷ 1105 x 2 ÷ 3105 x 0,66
year:
orrowed)
31 Dec 20.
0,5 ÷ 100 x105 x 20 ÷105 x 5 ÷ 3105 x 1,66
ed)
ecember 2
c 20.0 n 20.1
Perio(
Interes
nd 2/3 of a
8 months
12 = 3 = 667 =
1 = 1 yr, 8
x 20 ÷ 12 =÷ 12 = 3 = 667 =
R12 000 10,5%
20.1 = 1 yr,
od: 12 mth(= 1 yr) st rate: 10,
year = 1,6
R12 000 10.5%
R 840.00R 840,00R 840,00R 840,00
R12 000 10.5%
mths (or 2
= R2 100,0R2 100,0R2 100,0R2 100,0
% , 8 months
31 Dec 2
s
5%
6667 yr).
%
0 0 0 0
% 20 mths)
00 00 00 00
(or 20 mth
20.1
FAC2601
hs).
/101
61
62
3. Profits
In the case of the calculation of profits a period is not involved; therefore no time-line is necessary. In this case the amount and the percentage are the key factors.
Examples:
3 Profits: 3.1 Profit on cost price:
Cost price R23 000 Profit on cost price 25% To calculate: Selling price Calculation of selling price:
R23 000 + (R23 000 x 25 ÷ 100) = R23 000 + R5 750 R28 750
OR: R23 000 + (R23 000 x 0,25) = R23 000 + R5 750 R28 750
OR: R23 000 x 1,25 R28 750
The rationale behind the last calculation is that , if the cost price Is R1,00 the profit will be R0,25, and the selling price will be R1,25. Therefore: if the cost price is R23 000, the selling price will be R23 000 x 1,25.
3.2 Profit on selling price:
Selling price R23 000 Profit on selling price 25% To calculate: Cost price Calculation of cost price: R23 000 – (R23 000 x 25 ÷ 100) = R23 000 – R 5 750 R17 250 OR: R23 000 – (R23 000 x 0,25) = R23 000 – R5 750 R17 250 OR: R23 000 x 0,75 R17 250 In this case the calculation of the last amount is not as simple as in the previous case. One must reason a little: The selling price of R23 000 includes a profit of 25%, therefore, if the selling price is R1,00, and the profit is R0,25, the cost price (which is less than the selling price) will be R0,75. Thus, to calculate the cost price: If the selling price is R23 000, the cost price will be R23 000 x 0,75.
3.3 Se SeProTo Ca
OR OR TheincprocalR2
To
Co
Pr
Se
Givpric Givpric
4. Ra 4.1 Pe
A p15%his
By par
lling price
lling price ofit on costcalculate:
alculation o
R2= R
R: R2 = R
R: R2
e calculatiocludes a profit is R0,25culate the3 000 ÷ 1,
sum up:
ost price
rofit
elling price
ven the cosce) multiply
ven the sece) divide t
atios
rcentage a
percentage% actually
s ratio will b
43 ÷ 60 x
dividing thr 4.2 below
is given bu
t price Cost pric
of cost price
23 000 – (RR23 000 – 23 000 – (RR23 000 – 23 000 ÷ 1,
on of the lrofit of 25%5, the coste cost pr25.
x
e
st price any cost pric
lling price the selling
as a ratio:
e can also y means 15be 43 to 60
100 = 71,7
he values bw).
ut the perc
e
e:
R23 000 x 2R4 600
R23 000 X R4 600 25 (note: d
ast amoun% on costt price (whiice: If the
1,0
1,25 0,2
1,2
nd you havee with 1,25
and you mprice with
be regard5 out of 100 (indicated
7% (or 71,7
both sides
centage pro
25 ÷ 125)
0,20)
divided by)
nt is reasot price, theich is less e selling
00
25
25
e to calcul5 (if the pe
must calcul 1,25 (if th
ed as a ra00 or 15:10d as 43:60
7 out of 10
of the colo
ofit is on co
R23 000 25%
R18 400
R18 400) R18 400
ned as follerefore, if tthan the seprice is R
1,25
ate the selrcentage is
ate the coe percenta
atio, a ratio00. If a stu), or
00 or 71,7:
on by 100,
ost price:
%
lows: The the sellingelling priceR23 000,
lling price s 25%).
st price, (wage is 25%
o to 100. Thdent obtai
100).
you get a
selling pricg price is Re) will be Rthe cost
(which is m
which is les%).
his meansned 43 ma
ratio of 0,
FAC2601
ce of R23 R1,25 and
R1,00. Thusprice will
more than
ss than se
that a ratiarks out of
717:1 (refe
/101
63
000 the s, to be
cost
lling
io of f 60,
er to
64
Similarly, if the sales of an entity is R245 000, and the gross profit on these sales is R147 000, the percentage gross profit is: R147 000 ÷ R245 000 x 100 = 60%. Without doing a complicated calculation, one can immediately say that the cost price is 40% (= 100% - 60%). This 40% can also be calculated as follows:
R245 000 – R147 000 [= R98 000] ÷ R 245 000 x 100 = 40%. FAC2601_2012_TL_101_3_E.doc
