April_2023_Test_solution_FINANCIAL ACCOUNTING 288

SCHOOL OF ACCOUNTANCY FINANCIAL ACCOUNTING 288 TEST: 19 APRIL 2023 Examiners: Mrs N Daniels MARKS: 100 Mrs W Engelbrecht TIME: 3 HOURS Mrs L Sahd NUMBER OF 4 QUESTIONS : Ms J van Wyk * me – mark with error QUESTION 1 (15 marks) PART A (3 marks) 1) D (1) 2) E (1) 3) E (1) PART B (4 marks) a) Liability is a present obligation(X), arising from past events (X) settlement of which is expected to result in an outflow of economic benefits (X), (X): If two are correct, 1 mark. All three must be correct for 2 marks. b) Financial statements are prepared with the assumption that the entity will continue to be in business in the foreseeable future (12 months) (1) c) It is probable that future economic benefits will flow to the entity; and the item has a cost or value which could be measured reliably (1) (both correct) PART C (8 marks) a) Dates DR CR 31/03/2016 Income tax expense / underprovision 40 000 (1) jnl SARS / Income tax payable 40 000 (1) amnt 01/04/2016 SARS/ Income tax payable 5 000 (1) jnl & amnt Bank 5 000 30/06/2016 SARS/ Income tax payable 250 000 (1) jnl & amnt Bank 250 000 31/12/2016 SARS/ Income tax payable 350 000 (1) jnl & amnt Bank 350 000 31/02/2016 Income tax expense 650 000 (1) jnl & amnt SARS/ Income tax payable 650 000 b) 12. Income tax expense R SA normal income tax - current year 650 000 (1) - previous year/ underprovision 40 000 (1) QUESTION 2 (35 marks) 690 000 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 ASSETS Non-current assets Property, plant and equipment (690 + 530 – 32(1) + 3.2(1) + 6.4(1)) 1 197 600 (3) Goodwill 65 000 (1) Deferred tax (7.952(1) + 8.96(1) – 0.896(1) – 1.792(1)) 14 224 (4) Current liabilities Inventory (170.4 + 78 – 28.4) 220 000 (1) Debtors (96 + 60 - 20(1) - 34(1)) 102 000 (2) Total assets 1 598 824 EQUITY AND LIABILITIES Equity attributable to the owners of the holding company Ordinary share capital 300 000 (1) Retained earnings 1 054 424 (1me) Total equity Non-current liabilities Long term loan (182 + 120 – 90) 1 354 424 212 000 (1) Current liabilities Creditors (63.4 + 23 – 20(1) – 34(1)) 32 400 (2) Total equity and liabilities 1 598 724 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016 Revenue (1 126 + 763.5 – 442.5) 1 447 000 (1) Cost of sales (418 + 234 – 442.5(1) + 28.4(1) – 25(1)) (212 900) (3) Gross profit 1 234 100 Other income (142 + 25.5 – 20) 147 500 (1) Other expenses (398.5 + 292.4 – 6.4) (684 500) (1) Finance costs (30.27 + 22.71 – 10.125) (42 855) (1) Finance income (15.75 + 14.625 – 10.125) *same as costs 20 250 (1me) Profit before tax 674 495 Income tax expense (120.48 + 72.315 – 7.952(1) + 7(1) + 1.792(1)) (193 635) (3) Profit for the year 480 860 EXTRACT FROM THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016 ,...........................................CONTINUED.........................................................