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LUCIANO SCHOOL OF LAW & SOCIAL SCIENCE [LSLSS]
“Inspired to impact with a difference”
Page |1
Contents
OCTOBER/NOVEMBER 2011 ..................................................................................................................... 2
MAY / JUNE 2012 .................................................................................................................................... 18
OCTOBER / NOVEMBER 2012 ................................................................................................................. 33
OCTOBER / NOVEMBER 2013 EXAM PACK ............................................................................................. 45
MAY/JUNE 2014 ...................................................................................................................................... 54
www.lslss.co.za
, LUCIANO SCHOOL OF LAW & SOCIAL SCIENCE [LSLSS]
“Inspired to impact with a difference”
Page |2
OCTOBER/NOVEMBER 2011
SOLUTION 1: PROPERTY, PLANT ND EQUIPMENT, INVESTMENT PROPERTY,
IMPAIRMENT OF ASSETS, NOW CURRENT ASSETS HELD FOR SALE AN DISCOUNUED
OPERATIONS
1. PROP INVEST LTD
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE
YEAR ENDED 30 JUNE 2011
DISCONTINUED OPERATIONS
R
Revenue (98 000 + 87 000) 185 000
Other income (c3) 29 000
Other Expenses (47 000 + 32 000) (79 000)
Finance costs (75 000 + 28 000) (103 000)
Profit before tax 32 000
Income tax expenses (c4) (6248)
Profit for the year – discontinued operation 25752
2. PROP – INVEST LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
2.1. PROPERTY, PLANT AND EQUIPMENT
Land Buildings Vehicles
Carrying amount – 1 July 2010 300 000 687 143 -
Cost 300 000 700 000 -
Accumulated Depreciation (- ) 6(i) -
(12857 )
Additions - - 150 000
Depreciation - 6(v) 7(i)
(18045) (8167)
Impairment loss (7iii) - - (21833)
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, LUCIANO SCHOOL OF LAW & SOCIAL SCIENCE [LSLSS]
“Inspired to impact with a difference”
Page |3
Accumulated depreciation and impairment loss ( -) 6(v) 7iv)
(18045 ) (30 000)
Land and Buildings in Bedfordview, Gauteng were revalued for the first time on 30 June 2011 by
an independent sworn appraiser.
If the assets had been carried at cost less accumulated depreciation, the carrying amount would
have amounted to R970 000 (Land: 300 000 and buildings: 670 000) (c8).
An impairment loss of R21 833 was accounted for on Motor Vehicles due to the negative
publicity received by the manufacturer in the, media. The recoverable amount of the vehicle was
determined to be the fair value less cost to sell.
2.2. Investment Property
Land Building total
R R R
Carrying amount – 1 July 2010 1050 000 1900 000 2950 000
Fair value adjustment 60001(iii) 10 0002(iii) 16 000
Transfer to non- current asset held for sale (1056000) (1910 000) (2966000)
- - -
The fair values we determined on 31 January 2011 by an independent, sworn appraiser. This is
when a detailed formular plan of disposal was at a stage of completion and no realistic
possibility of withdrawal existed.
2.3. Non - current Assets held for sale
A decision to dispose of property due to the fact that the return on the investment properties
located in the Western Cape did not meet management’s expectations was taken by the board
of directors. On 31 January 2011 a detailed formular plan of disposal was approved and publicly
announced. The formular sales plan was at a stage of completion where no realistic possibility
www.lslss.co.za
, LUCIANO SCHOOL OF LAW & SOCIAL SCIENCE [LSLSS]
“Inspired to impact with a difference”
Page |4
of withdrawal existed Management expects that a binding sales agreement for the property will
be concluded by 30 September 2011. The property will be sold for cash.
The non – current assets held for sale consist of the following:
R
Investment Property – Struis baai 2 979 000
CALCULATIONS
1. Property in Struisbaai – Western Cape
(a) Land Carrying Historical Fair Vlue Exempt Temporary Deferred
amount cost Adjustment difference difference tax (asset
Liability)
R R R R R R
Cost-28 February 1000 000 1000 000 - 1000 000 - -
2010
Fair value 50 000 50 000
adjustment-30 June
2010 (i)
Carrying amount - 1050 000 1000 000 50 000 1 000 000 50 000 (ii)
(9324)
30 June 2010
Fair value adjustment 6 000 6 000
– 31 January
2011(iii)
Transfer to Non – 1056000 1000 000 56 000 1 000 000
current Asset Held
for sale
Fair value adjustment 5 000 5000
30 June 2011 (iv)
Carrying amount – 1061000 1000 000 61000 1000 000 61000 (v)
(11375)
30 June 2011
www.lslss.co.za
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