FAC1601 ASSIGNMENT 4
SEMESTER 1 2024
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www.stuvia.com
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Question 1
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This information relates to the 24 questions below:
SolaMin CC is a profitable business in the maintenance of solar systems for mines in Ermelo, Mpumalanga. The CC has
presented you with the following information for the preparation of the statement of cash flows for the previous financial year
ended 31 August 2023:
Extract from the statement of financial position as at 31 August 2023:
2023 2022
R R
Long-term loan 323,800 225,200
SARS ⏤ current tax payable 72,200 51,000
Trade payables control 158,900 85,900
Loans from members 137,800 14,200
Accrued water and electricity expenses 7,000 3,400
Distribution to members payable 92,700 128,300
Revaluation reserve 18,600 -
Retained earnings 273,600 94,000
Members’ contributions 1,828,600 1,681,600
Fixed deposit 25,100 12,800
Vehicles at cost 147,000 -
Equipment (at cost) 695,700 617,300
Land and buildings 1,051,700 795,100
Accumulated depreciation: equipment 107,800 38,100
Loans to members 87,200 28,000
Trade receivables control 66,900 52,000
Investment (at fair value) 277,200 -
Inventory 150,300 85,900
Prepaid security expense 53,900 44,500
Dividend receivable 55,100 232,300
Bank 504,000 707,500
Extract from the statement of profit or loss and other comprehensive income for the year ended 31 August 2023:
R
Revenue ⏤ sale of maintenance parts 1,701,600
Revenue ⏤ maintenance services 1,013,800
Cost of sales 935,800
Travel expenses 32,100
Repairs and maintenance expenses 38,900
Other operating expenses 266,000
Water and electricity 108,800
Depreciation on equipment 191,400
Security expenses 64,400
Profit on sale of equipment 19,100
Interest income on loans to members 11,000
Interest expense on loans from members 24,000
Interest expense on long term loans 19,300
Investment income: dividend income 23,200
Income tax expense 168,900
Additional information
1. The company adopts the direct method for presenting cash flows from operating activities.
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2. All inventory necessary for solar system maintenance—ranging from spare parts to entire solar panels—is procured and
sold on credit terms.
3. This year, profit distributions totalling R194,000 were declared to members, reflecting the company's profitability and its
commitment to returning value to its investors.
4. Over the financial year, significant refurbishments were made to the company’s operational facilities, including the storage
building for solar components.
5. Interest on loans given to and obtained from members is capitalised. All loans to members are immediately callable, while
the total amount due to partners is payable on 30 June 2026.
6. During the year, equipment essential for maintaining solar systems—bought originally at R19,000 and with accumulated
depreciation, on the date of sale, of R7,000 — was sold as part of the company’s asset improvement strategy. The proceeds
were reinvested in acquiring new, more efficient and technologically advanced equipment on 30 June 2023. This new
machinery is expected to enhance the efficiency of maintenance operations and support the company’s growth in the solar
maintenance sector.
7. The company maintains a strategic investment in 11,000 ordinary shares of Ermelo Energy Resources Ltd, a move that
aligns with its core business by investing in a company that is also involved in the renewable energy sector. This investment
was acquired at a cost of R24 (per share) and the shares traded at R25.2 on 31 August 2023.
8. Land and buildings were appraised by an independent valuer and all the adjustments have been correctly recorded in the
financial records of the CC.
9. On 31 August 2023, the finance managed discovered that the maintenance team had granted one of the customers a
discount of R2,500 on a maintenance job done on the day. This is yet to be recorded by the finance team.
10. One of the members contributed a second-hand bakkie to the CC for use by the maintenance team to carry spare parts
when travelling to different client sites. No other contributions were made by the members to the CC.
Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers
under cash flows from operating activities section in the statement of cash flows for SolaMin CC for the year ended 31
August 2023?
a. R2,703,000
b. R1,689,200
c. R2,700,500
d. R2,727,800
Clear my choice
Question 2
Not yet answered
Marked out of 2.00
Which of the following alternatives represents the correct amount that must be disclosed as distributions to members paid
under cash flows from financing activities section in the statement of cash flows for SolaMin CC for the year ended 31
August 2023?
a. R0
b. -R29,000
c. -R229,600
d. -R250,000
Clear my choice
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