Exam (elaborations)
FAC3701 ASSESSMENT 2 SEMESTER 2 DUE DATE 13 SEPTEMBER 2024
- Institution
- University Of South Africa (Unisa)
100% PASS RATE GAURANTEED
[Show more]
Seller
Follow
Content preview
Question 1The accumulated depreciation of the desktop computers for the nancial years ended 31 May 2023
and 31 May 2024, after the change in the depreciation method and change in the depreciation rate,
according to the requirements of IAS 8, Accounting policies, changes in accounting estimates and
errors, amount to:
1. R249 750 (2023) and R374 625 (2024)
2. R540 000 (2023) and R810 000 (2024)
3. R540 000 (2023) and R664 875 (2024)
4. R517 500 (2023) and R642 375 (2024)
5. R517 500 (2023) and R787 500 (2024)
Question 2
Which one of the following statements relating to accounting policies is correct according to IAS 8,
Accounting policies, changes in accounting estimates and errors?
1. When applying accounting policies, it is important that similar transactions are treated the
same by applying the accounting policy consistently.
2. In the absence of a speci c International Financial Reporting Standard that applies to a
transaction, management is not allowed to use its judgment in applying an accounting policy
that is relevant and reliable.
3. If a change in accounting policy is made to reflect more relevant and reliable information (i.e.,
a voluntary change in accounting policy) the change should be accounted for prospectively as
retrospective application is not allowed.
4. When a change in accounting policy is applied prospectively, the entity shall adjust the
opening balance of each affected component of equity for the earliest period presented and
the other comparative amounts disclosed for each period presented as if the new accounting
policy had always been applied.
5. The application of an accounting policy for a transaction that did not occur previously, is
regarded as a change in accounting policy.
Question 3
The tax base of the desktop computers of Hometech Ltd for the nancial years ended 31 May 2023
and 31 May 2024, according to section 11(e) of the Income Tax Act, amount to:
1. R1 125 000 (2023) and R675 000 (2024)
2. R540 000 (2023) and R810 000 (2024)
3. R900 000 (2023) and R675 000 (2024)
4. R896 250(2023) and R671 250 (2024)
5. R918 750 (2023) and R 693 750 (2024)
, Question 4
The lift in the administration building needed to be capitalised and not expensed. The journal entry to
record the depreciation correctly in the accounting records of Hometech Ltd for only the year
ended 31 May 2024, according to the requirements of IAS 8, Accounting policies, changes in
accounting estimates and errors (ignore any tax implications) is as follows:
Debit Credit
R R
1. Depreciation(P/L) 40 850
Accumulated depreciation – administration building (P/L) 40 850
Correction of depreciation expense of administration building
2. Depreciation – administration building (P/L) 43 000
Accumulated depreciation – administration building (SFP) 43 000
Correction of depreciation expense of administration building
3. Accumulated depreciation – administration building (SFP) 43 000
Depreciation – administration building (P/L) 43 000
Correction of depreciation expense of administration building
4. Accumulated depreciation – administration building (SFP) 137 000
Depreciation – administration building (P/L) 137 000
Correction of depreciation expense of administration building
5. Accumulated depreciation – administration building (SFP) 180 000
Depreciation – administration building (P/L) 180 000
Correction of depreciation expense of administration building
Question 5
The effect of the correction of the lift incorrectly expensed on 1 January 2022, needs to be disclosed
in the notes to the annual nancial statements of Hometech Ltd for the year ended 31 May 2024 to
show the effect on the prior period line items. The line items affected in the comparative period in
the statement of nancial position at 31 May 2023 according to the requirements of IAS 8,
Accounting policies, changes in accounting estimates and errors, are as follows:
1. 2023
R
Increase in property, plant and equipment 860 000
Increase in current tax liability (240 800)
Increase in equity 619 200
2. 2023
R
Increase in property, plant and equipment 838 500
Increase in equity 838 500
3. 2023
R
Increase in property, plant and equipment 4 460 000
Increase in equity 4 460 000
4. 2023
R
Increase in property, plant and equipment 860 000
Increase in equity 860 000
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 Makwaebakhutso. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R50,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53022 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now