FAC3703 Assignment 1 (COMPLETE ANSWERS) Semester 2 2024 - DUE 7 September 2024
FAC3703 Assignment 1 (ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED Course Specific Financial Reporting (FAC3703) Institution University Of South Africa (Unisa) Book DESCRIPTIVE ACCOUNTING IFRS FO...
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FAC3703 Assignment
1 (COMPLETE
ANSWERS) Semester
1 2024 (551692) -
DUE 8 April
2024 ;100%
TRUSTED
ADMIN
[COMPANY NAME]
, Best Electronics Ltd is a multinational company operating in the
manufacturing and distribution of electronic goods. The company has recently
experienced significant growth and expansion, leading to the acquisition of
several properties and manufacturing equipment. Best Electronics Ltd has a
31 January year-end. Financial instruments As part of its expansion strategy,
Best Electronics Ltd has engaged in various financial transactions to manage
its working capital and investment needs. 1. Convertible Debentures On 1
April 2023, Best Electronics Ltd issued 18 000 debentures at their par value of
R455 per debenture in order to raise funds for expanding its operations.
Interest is payable annually on 31 March at a nominal interest rate of 11% per
annum. At the end of five years, each debenture is convertible, at the option of
the holder, into three ordinary shares or the debentures can be redeemed for
cash at a value of R455 each. On 1 April 2023, the prevailing market interest
rate for similar debt instruments without a conversion option was 13,5% per
annum and 14,5 % per annum for similar debt instruments with a conversion
option. INSTRUCTIONS FOR SUBMISSION OF WRITTEN ASSIGNMENTS
Written assignments can be submitted as follows: • electronically via myUnisa.
PLEASE NOTE: • If you electronically submit the written assignment via
myUnisa the file must be converted to or scanned in PDF-format. The page
orientation MUST be portrait. • The assignment must be scanned and
submitted as only one PDF file. The PDF file must not be a “read only” file. •
Any format other than PDF will not be accepted by myUnisa. • Once you have
submitted your assignment please ensure that you have submitted the correct
assignment. Study: Learning units 1 to 2 of tutorial letter 501 (study guide);
and Relevant chapters in Descriptive Accounting FAC3703/01/2024 2.
Investment in shares On 1 March 2023 Best Electronics acquired 20 000
ordinary shares in Processors Ltd at their fair valued price of R48 per share
and the associated transaction costs amounted to 46 cents per share. On this
date, Best Electronics Ltd made the irrevocable election to measure the
investment in shares of Processors Ltd at fair value through other
comprehensive income. On 31 October 2023, Processors Ltd declared and
paid a dividend of 175 cents per share to all its ordinary shareholders. The fair
value of Processor Ltd’s shares was R61,50 per share on 31 January 2024. 3.
Investment in debentures Best Electronics Ltd purchased debentures in
MicroChip Ltd on 1 February 2023 at face value. The accountant correctly
calculated the amortisation table as follows: These debentures were classified
as being measured at amortised cost. On date of purchase the debentures
have a low credit risk rating and are not credit-impaired. At year-end, 31
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