FAC1601 Assignment 3 2026 MEMO | Due 23 April 2026 (23:00pm)

FAC1601 ASSIGNMENT 3 MEM0 2026

DUE 23 APRIL 2026 (11PM)




QUESTION 1.1 – Statement of Profit or Loss and Other Comprehensive Income
for the year ended 28 February 2026

Revenue (Sales – Settlement discount granted)
= R1 852 800 – R4 500 = R1 848 300

Cost of sales
= Opening inventory + Purchases – Settlement discount received + Carriage on
purchases – Closing inventory
= R36 600 + (R245 600 – R1 700) + R1 400 – R50 000
= R36 600 + R243 900 + R1 400 – R50 000
= R231 900

Gross profit (Revenue – Cost of sales)
= R1 848 300 – R231 900 = R1 616 400

Distribution, administrative and other expenses

Salaries and wages (given) R240 500

Carriage on sales R2 200

Telephone R5 200

Stationery (R7 000 – R1 200 closing on hand) R5 800

, Directors’ remuneration (R7 000 + R80 000 bonus) R87 000

Depreciation (vehicles) R43 000

Credit losses (R11 500 write-off + R2 000 increase in allowance) R13 500

Audit fees (full amount – see working) R137 500



Total R534 700



Finance costs – Interest on loan (R103 600 × 15% × 6/12) R7 770

Profit before tax
= Gross profit – Operating expenses – Finance costs
= R1 616 400 – R534 700 – R7 770 = R1 073 930

Income tax expense R135 000

Profit for the year
= R1 073 930 – R135 000 = R938 930

Other comprehensive income
– Revaluation surplus on land (given) R112 000

Total comprehensive income for the year
= R938 930 + R112 000 = R1 050 930




QUESTION 1.2 – Statement of Financial Position (extract: Current assets, Equity
and Liabilities) as at 28 February 2026