Exam (elaborations)
FAC3702 EXAM PACK 2023
- Institution
- University Of South Africa (Unisa)
the document has the latest questions and elaborate answers
[Show more]
Content preview
FAC3702 EXAMPACK 2023
UPDATED REVISION
PACK
,Welcome
If you are reading this message then you are doing(FAC3701) with UNISA. These are being compiled by our
Together We Pass team for our students who are registered for FAC3701 this term, and will be built upon year on
year to create the best set of questions, with suggested solutions, with the possibility of including hints and tips
in the future.
Please note that this is not the exam scope, but this document will work as supplementary study material which
will help you prepare for the coming exams. It’s work in progress and we will make changes and amendments to
the document as we progress.
Good luck this term, and we look forward to working with you!
Our contact details should you need help:
Together We Pass
PHONE 021 591 0673
EMAIL info@togetherwepass.co.za
headtutor@togetherwepass.co.za
WEB www.togetherwepass.co.za
FB
www.facebook.com/togetherwepass
GGLE+ Together We Pass on Google Plus
TWITR @togetherwepass
,QUESTION 1
The following financial information relates to ABC Limited for the year ended 30 April 2014:
1. Machine
Date R
Cost 1 May 2011 500 000
Residual value 1 May 2011 50
Revalued amount on a net replacement value basis 000 30 April 2014 410 000
Depreciation rate - 20% per annum straight-line
The tax base on 1 May 2013 was R200 000 which would be deductible in equal amounts on
30 April 2014 and 30 April 2015 against taxable income.
On 1 May 2013 there was a deferred tax liability of R36 000 due to the temporary difference in respect
of the wear and tear on the machine.
The estimates of the original useful life and residual value remained unchanged after the revaluation.
During 2014 the board of directors decided to disclose the machine in future at the net
replacement value. The revaluation on 30 April 2014 was performed by a sworn appraiser, W Mass,
on the net replacement value basis with reference to prices of similar new assets in an active
market. It is company policy that the revaluation surplus will be realised on disposal of the machine.
2. Investment property
On 31 August 2013 ABC Limited sold its only investment property for R1 600 000. Since ABC
Limited had already decided during the financial year ended 30 April 2013 to sell the investment
property, the 2004 financial statements reflected a deferred tax balance that was correctly
calculated and provided based on the intention to sell. Investment property was previously
accounted for according to the fair value model.
No tax allowances were granted on the property.
Details of the disposed investment property are as follows:
Deferre
Fair Temporar d tax
Date Cost value y liability
R R difference R
R
Land 1 November 2011 250 000 - -
Land 30 April 2013 - 350 000 -100 15 000
Building 1 November 2011 750 000 - 000 -
Building 30 April 2013 - 1 100 000 -350 52 500
000
1 000 000 1 450 000 450 000 67 500
© 2015 Together We Pass. All rights reserved.
, Rental income from the investment property for the current period amounted to R56 000.
Operating expenses incurred in 2014 in connection with the investment property while being
leased out were R22 000.
3. Profit before tax
The profit for the current period after taking into consideration all of the above-mentioned information
is R600 000.
4. Tax rate
The tax rate is 30% for all the applicable periods.
REQUIRED:
Disclose only the given information in the applicable notes to the annual financial statements
of ABC Limited for the year ended 30 April 2014. Your answer must comply with the requirements
of Generally Accepted Accounting Practice.
The following are not required:
- accounting policy notes
- comparative figures
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AlectaGroup. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R60,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now