Exam (elaborations)
FAC2602 EXAM PACK
- Institution
- University Of South Africa (Unisa)
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,May/ June 2015 MemoQUESTION 1
(a) DR CR
Ordinary share capital 720 000
Retained earnings 12 000
Goodwill 10 800
NCI 292 800
Investment in Tide ltd (MHG) 450 000
(b) Interest received (MHG) 11 000
Interest paid (Tide) 11 000
(c) Accumulated depreciation (Tide) 8 334
Retained earnings (MHG) 4 167
Depreciation (MHG) 4 167
(d) Preference dividends received (MHG) 7 920
NCI 6 480
Preference dividends paid (Tide) 14 400
(e) Current account with Tide 54 000
Dividends received (MHG) 54 000
Dividends paid (Tide) 54 000
Current account with MHG 54 000
CALCULATIONS
Analysis of the owners’ equity of Tide ltd
Total MHG 60% NCI
At since
At acquisition
Share capital 720 000 432 000 288 00
Retained earnings 12 000 7 200 4 800
732 000 439 200 292 800
Purchase difference 10 800 10 800
Consideration and NCI 450 000
(2) Interest on loan (11% x 300 000) x 4/14
11 000
,(3) Depreciation 30 June 2013 to 30 April 2014
(20% x 25 000) x 10/12
4167
1 May 2014 to 30 APRIL 2025
= 20% (25 000-4167)
4167
(4) Total ordinary dividend of tide Ltd = 0.15x 600 000
= 90 000
Attributed to MHG = 60% x 90 000
= 54 000
(5) Total preference dividend= 12% x 120 000
= 14 400
Attributed to MHG 55%x 14 400
Attributed to NCI 45% x 14 400
QUESTION 2
(a)
M COM LTD Group
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 August 2014
R
Revenue (1 000 000+1 075 000-312 500) 1 762 500
Cost of sales (2) (728 500)
Gross profit 1 034 000
Other income
Dividends received (40 000-27 500) 12 500
Admin, operating and other expenses
Depreciation (27 500+18 750-5 000) (41 250)
Other expenses (340 250+296 750) (637 000)
Finance costs
Interest on bank overdraft (6 250)
Interest on debentures (4 500-1 500) (3 000)
Profit before tax 359 000
Income tax expense (80 150+104 650) (184 800)
Profit for the year 174 200
Other comprehensive income for the year ………….
Total comprehensive income for the year 174 200
Total comprehensive income for the year attributed to:
Owners (174 200-66 170) 108 030
NCI (53 670-2 500+1 500) 66 170
174 200
(b)
M COM LTD GROUP
Consolidated statement of changes in equity for the year ended 31 August 2014
Ordinary 10% Revaluation Retained NCI
shares Preference surplus earnings
shares
Balances at the beginning of the year 362 500 225 000 175 000(1) 15 000(2) 135 500
, Changes during the year
Profit for the year 108 030 66 170
Preference dividends (22 500) (41 250)
Balances at the end of year 362 500 225 000 175 000 100 530 160 420
(1) 125 000+50 000
(2)42 500-25 000+2 500-5 000
(3) 10% x 225 000
Calculations
Analysis of the owners’ equity of D.com ltd (preference shares)
Total M COM 40% NCI 60%
At since
At acquisition
Preference shares 125 000 50 000 75 000
Outstanding preference dividends 31 250 12 500 18 750
156 250 62 500 93 750
Purchase difference ………… ……….
Consideration and NCI 62 500
Since acquisition
Outstanding dividends 25 000 10 000 15 000
Current year
Attributable profit 25 000 10 000 15 000
Dividend (68 750) (27 500) (41 250)
Analysis of the owners’ equity of D com ltd (ordinary shares)
Total M COM 80% NCI 20%
At since
At acquisition
Share capital 43 750 35 000 8 750
Revaluation surplus 31 250 25 000 6 250
Retained earnings 2 500 2 000 500
Given 33 750
Arrear preference dividends (31 250) ………… ………..
77 500 62 000 15 500
Purchase difference 13 000 13 000
Consideration and NCI 75 000
Since acquisition
To the beginning of current period
Retained loss (6 250) (5 000) (1 250)
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