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Summary FAC 3701 Assignment 1 Semester 1 & 2 2021 General Financial Reporting (FAC3701)
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Summary FAC 3701 Assignment 1 Semester 1 & 2 2021 General Financial Reporting (FAC3701)
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Fac3701/ep/gdEXAMPACK
FAC3701
LUCIANO SCHOOL OF LAW & SOCIAL SCIENCES [LSLSS]
March 8, 2015
Authored by: levison kamanga
, 1
Contents
FEEDBACK ON PREVIOUS EXAMINATION PAPERS ........................................................................................ 2
OCTOBER / NOVEMBER 2011 ............................................................................................................... 2
MAY / JUNE 2012 ................................................................................................................................ 12
OCTOBER / NOVEMBER 2012 ............................................................................................................. 20
MAY / JUNE 2013 ................................................................................................................................ 30
OCTOBER / NOVEMBER 2013 ............................................................................................................. 38
MAY / JUNE 2014 ................................................................................................................................ 47
LUCIANO SCHOOL OF LAW & SOCIAL SCIENCES [LSLSS]
, 2
FEEDBACK ON PREVIOUS EXAMINATION PAPERS
OCTOBER / NOVEMBER 2011
SOLUTION 1: ACCOUNTING POLICIES, HANGERS IN ACCOUNTING ESTIMATES AND
ERRORS, IAS 10 (AC107) – EVENTS AFTER THE REPORTING PERIOD 1AS12 (AC102) –
INCOME TAXES AND IAS 18 (AC111) REVENUE
Question 1.1.
Calculation of corrected profit before Tax of rainbow Limited for the year ended 28 February
2011
R
Provisional profit 690 000
Cash on delivery sales – reversed (40 000)
Credit loss [ 10 000 – 0.10) (9000)
Change in accounting estimate (300 – 500 ) (50 000)
Interest – tax (4000)
Realties – tax 2010 (6000)
Corrected profit 581000
Question 2
Calculation of current Tax Rainbow Limited for year ended 28 February 2011
R
Profit before tax (see 91) above) 581 000
Exempt differences (52 000)
Interest on tax 4 000
Penalties on tax 6000
Dividends received (60 000)
Capital profit on sale of machine (24 000 – 20 000) x (100 – 50%) (2000)
Temporary Differences 87 000
Cash on delivery sales 40 000
Profit on sale of machine (20 000 – 12 000) (8 000)
LUCIANO SCHOOL OF LAW & SOCIAL SCIENCES [LSLSS]
, 3
Recoupment on sale of machine (20 000 – 10 000) 10 000
Depreciation (300 000 ÷ 2 ) 150 000
Tax allowance (500 000 ÷ 4) (125 000)
Royalties received in advance 20 000
Taxable income 616 000
Current tax (616 000 x 28%) 172 480
Question 3
Calculation of deferred Tax Balance in the Statement of Financial position of Rainbow Limited
as at 28 February 2011
Carrying Tax Base Temporary Deferred Tax
amount Difference Asset / Liability)
at 28 %
R R R R
Cash on delivery sales 40 000 - 40 000 11200
Royalties received in advance 20 000 - 20 000 5600
machinery (i) (ii) 25 000 (7000)
150 000 125 000
Deferred tax asset 9800
Machinery carrying Amount
R
Carrying amount : beginning of year 300 000
Depreciation (300 000 ÷ 2) (150 000)
Carrying amount : end of year 150 000
NB: The asset is depreciated over the revised useful life.
LUCIANO SCHOOL OF LAW & SOCIAL SCIENCES [LSLSS]
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