Exam (elaborations)
FAC 1601 ASSESSMENT 05 2022
- Course
- FAC 1601 (FAC1601)
- Institution
- University Of South Africa (Unisa)
This document contains your gateway to a distinction for assessment 05 of the second semester of 2022
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FAC1601 ASSIGNMENT 5SEMESTER 2
2022
Question 1
Question text
The information below relates to questions 1 – 16.
The following information pertains to Honey Limited.
Extract from ledger account balances as at 30 September:
2022 2021
R R
Share capital: Ordinary shares 380 500 338
300
Share capital: Preference shares 291 000 264
700
Retained earnings 66 200 48 400
Long-term loan - ABC Bank 88 000 120 000
,Land and buildings at cost 623 000 401
000
Machinery and equipment at carrying amount 262 300 222
700
Inventory 83 500 73 000
Trade receivables control 92 700 83 300
Listed investments 110 000 0
Bank 25 200 46 300
Trade payables control 66 500 52 600
SARS (income tax) 63 400 48 700
Dividends payable 46 200 62 000
Dividends receivable 0 0
Accrued expenses (wages) 0 11 400
Prepaid expenses 11 200 4 200
Revenue 805 800
Cost of sales 392 400
Administrative, distribution and other expenses 160
200
Fair value gain on listed investments 8 600
Dividends income 20 800
Loss on sale of machinery and equipment 10 100
Income tax expense 55 200
Depreciation 15 500
Wages 84 400
Insurance expense 14 100
2. Additional information
2.1 The following pertains to property, plant and equipment:
During the year machinery and equipment with a carrying amount of R95 000 was sold for
cash. This transaction has been correctly recorded.
Land and buildings with a cost price of R110 000 were sold for cash at the same amount.
Land and buildings are not depreciated.
All purchases of property, plant and equipment pertained to replacements and were paid in
full.
2.2 On 29 September 2022 Honey Limited declared ordinary shares dividend of 50 cents per
share whilst the preference shares dividends amounted to R40 800.
,2.3 The interest expense paid on the long-term loan amounted to R16 800 and is not yet
recorded.
2.4 On 31 August 2022, when the total number of ordinary shares issued were 120 000
shares, the shareholders approved the capitalisation issue of one (1) ordinary share for every
four (4) ordinary shares held. The capitalisation issue was done from retained earnings at
R0,50 per share. All other issued shares were paid for in cash.
QUESTION 1
Which of the following alternatives represents the correct amount that must be disclosed as
cash receipts from customers in the cash generated from operations section according to
direct method in the statement cash flows of Honey Limited for the year ended 30 September
2022?
1.
686 000
2.
796 400
3.
606 000
4.
750 000
5.
850 200
Question 2
Assume the correct cash receipts from customers is R920 000. Which of the following
alternatives represents the correct amount that must be disclosed as cash generated from
operations in the cash flows from operating activities section according to direct method in
the statement of cash flows of Honey Limited for the year ended 30 September 2022?
1.
253 900
2.
, 267 900
3.
268 800
4.
270 200
5.
300 000
Question 3
Which of the following alternatives represents the correct amount that must be disclosed as
interest paid in the cash generated from operations section according to direct method in the
statement cash flows of Honey Limited for the year ended 30 September 2022?
1.
(12,000)
2.
(8,500)
3.
8,500
4.
(16 800)
5.
16,800
Question 4
Which of the following alternatives represents the correct amount that must be disclosed as
income tax paid in the cash flows from operating activities section according to direct
method in the statement cash flows of Honey Limited for the year ended 30 September 2022?
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