FAC1601 - Financial Accounting And Reporting (FAC1601)
Exam (elaborations)
FAC1601-Financial Accounting And Reporting Assignment 5 Semester 1 2022.
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Course
FAC1601 - Financial Accounting And Reporting (FAC1601)
Institution
University Of South Africa
FAC1601-Financial Accounting And Reporting Assignment 5 Semester 1 2022. Moletji Ltd is public company owned by two prominent business women and the local community trust around the Capricorn District
Municipality. The company was founded in the year 2018 and the following information pertains to...
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2.00 Moletji Ltd is public company owned by two prominent business women and the local community trust around the Capricorn District
Municipality. The company was founded in the year 2018 and the following information pertains to the company:
Extract of accounts pertaining to the statement of financial position as at 31 December:
Extra from the statement of financial position
2020 2019
R R
Land and buildings at cost 647 200 529 500
Vehicles at cost 227 700 111 900
Furniture at cost 68 300 58 100
Accumulated depreciation: Vehicles 49 700 38 700
Accumulated depreciation: Furniture 12 500 10 800
Share capital: ordinary shares 409 600 217 600
Share capital: 12% preference shares 211 100 145 100
Dividends receivable - 2 300
Investments at fair value 134 100 -
SARS (income tax) 37 300 Dr 84 600
Loans from shareholders - 29 300
Long-term loan 95 900 76 600
Loans to directors 40 800 11 800
Retained earnings 384 900 302 100
Trade payables control 51 000 41 300
Accrued security expense 6 000 1 500
Dividends payable 37 300 12 100
Prepaid expenses (advertising) 6 300 4 500
Inventory 92 000 62 900
Trade receivables control 52 800 63 500
Bank 29 900 1 600
Items disclosed in the statement of profit or loss and other comprehensive income for the year ended 31 December 2020:
Extract from the statement of profit and loss
R
Revenue 1 660 000
Cost of sales 614 800
Other operating expenses 118 800
Administrative expenses (including salaries and
136 600
wages)
Dividend income: listed investments 6 900
Interest expense 9 600
Loss on sale on listed investments 2 800
Fair value gain: listed investments 12 600
Income tax expense 196 100
Depreciation 33 100
Profit on sale of non-current assets: furniture 550
Loss on sale of non-current asset: vehicle 10 200
Profit for the year 505 000
Additional information:
1. The following relates to property, plant and equipment:
· On 31 October 2020, a vehicle with a cost price of R71 000 and accumulated depreciation of R50 000 (on 1 January 2020) was sold for cash.
A replacement vehicle was bought on 1 December 2020.
· On 20 June 2020, furniture with a cost price of R4 000 and accumulated depreciation of R1 200 was sold for cash. A replacement furniture
was bought on 31 July 2020.
· All other purchases were in cash.
2. It is the accounting policy of the company to provide for depreciation as follows:
· Vehicles: According to the diminishing balance method, at 20% per annum.
· Furniture: According to the straight-line method, at 25% per annum.
3. The following relates to the shares of the company:
· On 31 August 2020, the shareholders approved the capitalisation issue of one (1) ordinary share for every four (4) ordinary shares held. On
that date the number of ordinary shares issued were 98 000 shares. The capitalisation issue was done from retained earnings at R0,50 per share.
All other issued shares were paid for in cash.
· The company allotted and issued 45 000 ordinary shares and 12% preference shares on 31 October 2020.
· On 15 December 2020, the company declared an ordinary dividend of 30 cents per share.
4. The investments consist of listed shares in Mankweng Ltd, bought for R3 each on 1 January 2020. The company sold 4 000 of these shares
on 30 November 2020.
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