Exam (elaborations)
FAC3701 Assignment 1 (COMPLETE ANSWERS) Semester 2 2024 - DUE 23 August 2024
- Course
- General Financial Reporting
- Institution
- University Of South Africa
100% TRUSTED WORKINGS, EXPLANATIONS & SOLUTIONS
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FAC3701 Assignment 1(COMPLETE ANSWERS)
Semester 2 2024 - DUE 23 August
2024
CONTACT: biwottcornelius@gmail.com
, FAC3701 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2024 - DUE 23 August 2024
TopStyle Ltd is a manufacturer and retailer of smartphone
accessories. TopStyle Ltd was incorporated on 1 July
2021. The profit before tax for the year ended 30 June
2023 amounted to R2 800 000, after taking into account
the information below: 1. Administration building The
administration building was acquired on 1 October 2021
at a cost of R1 500 000 and on this date, it was available
for use, as intended by management. Depreciation on the
administration building is written off over its estimated
useful life of 15 years according to the straight-line
method. A residual value of Rnil was allocated to the
administration building. The SA Revenue Service does not
allow a tax allowance on the administration building. No
other administration buildings were acquired or sold
during the year. On 20 December 2021 TopStyle Ltd made
a payment of R80 000 to an independent security
company, for security services to be rendered at the
administration building for the period from 1 January
2022 to 31 December 2022. The directors of TopStyle Ltd
decided to employ their own full time security staff from 1
January 2023. TopStyle Ltd paid security fees of R30 000
to their own security staff for the period 1 January 2023
to 30 June 2023.
To analyze the given scenario and calculate the necessary adjustments, let's break down the
information provided:
1. Depreciation on the Administration Building
Cost of Building: R1,500,000
Acquisition Date: 1 October 2021
Useful Life: 15 years
Depreciation Method: Straight-line
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