FAC2601 EXAM PACK 2021

FAC2601 EXAM PACK 2021 THIS PAPER CONSISTS OF EIGHT (8) PAGES PLEASE NOTE: 1. This paper consists of THREE (3) questions. 2. All questions must be answered. 3. Basic calculations, where applicable, must be shown. 4. Ensure that you are handed the correct examination answer book (blue for accounting) by the invigilator (only applicable for venue based exams). 5. Each question attempted must be commenced on a new (separate) page. 6. PROPOSED TIMETABLE: (Avoid deviating from this as far as possible.) Question No Subject Marks Time in minutes 1 Multiple choice questions 10 12 2 Statement of Financial Position and Statement of Profit or Loss and other Comprehensive Income with relevant notes 50 60 3 Profit calculation and Statement of Changes in Equity 40 48 TOTAL 100 120 QUESTION 1 (10 marks) (12 minutes) This question must be answered in your examination answer book – please only write down the number that you think is correct. Each question has only one correct answer. The marks per question are indicated in brackets at the end of each question. (a) The following list of balances appear, amongst others, in the accounting records of Vusi Ltd on 31 October 2020: Ordinary share capital (shares issued at R2.30 each) R1 265 000 Proceeds of ordinary shares issued on 30 June 2020 R 540 000 (Shares issued at R2.70 each) The following decision was taken and has not yet been recorded in the accounting records of Vusi Ltd as at 31 October 2020: The directors decided on a capitalisation share issue of 1 share for every 5 shares held as at 31 October 2020 at R1,20 per share. Which one of the following options represents the amount of the shares that have to be capitalised?: 1. R48 000 2. R132 000 3. R180 000 4. R1 985 000 (2) (b) Shaka Ltd purchased inventory for R644 000 (including VAT @ 15%) from a supplier. The supplier grants a 6,5% settlement discount for settlement within 30 days. Shaka Ltd arranged with a transport company to deliver the inventory to its premises. The delivery company charged Shaka Ltd R23 000 (including VAT @ 15%) for this delivery. A goods-in-transit insurance was taken out by Shaka Ltd with its insurance brokers to cover any damage of the inventory while in transit. The premium of this goods-in-transit amounted to R1 500 (excluding VAT). Shaka Ltd has a policy of claiming all discounts available to it. What is the purchasing cost of the inventory?: 1. R543 600 2. R545 100 3. R616 904 4. R618 404 (2) (c) Clever Brokers Ltd underwrites an issue of 25 000 ordinary shares at R2.50 each in Smart Ltd. The underwriting commission is 8%. If the public takes up 20 000 shares, how much is the commission?: 1. R1 600 2. R2 000 3. R4 000 4. R5 000 (2) QUESTION 1 (continued) (d) Khoza Ltd issued 20 000 8% cumulative preference shares at R3 each. During the 2019 financial year, Khoza Ltd did not have sufficient funds to pay for the preference shares dividends. During the following year, 2020, Khoza Ltd decided to declare and pay dividends for both 2019 and 2020. How much will be accounted for as dividends declared and paid in the 2020 statement of changes in equity?: 1. R1 600 2. R3 200 3. R4 800 4. R9 600 (2) (e) Which one of the following costs are specifically excluded in the purchasing cost of inventory?: 1. Transport costs 2. Import duties and other appropriate taxes 3. Selling expenses 4. Handling costs (2) QUESTION 2 (50 marks) (60 minutes) Koopman Ltd extracted the following balances from its financial records on 31 December 2020: R Revenue ........................................................................................................................ 9 504 500 Other income ................................................................................................................. 100 000 Administrative expenses ............................................................................................... 1 103 000 Distribution expenses..................................................................................................... 347 000 Other expenses ............................................................................................................. 504 000 Income tax expense....................................................................................................... 164 338 Land at cost ................................................................................................................... 1 000 000 Building at cost .............................................................................................................. 3 800 000 Furniture and fittings at cost (1 January 2020) ............................................................... 880 000 Motor vehicles at carrying amount (1 January 2020)...................................................... 300 000 Machinery at carrying amount (1 January 2020) ............................................................ 748 000 Accumulated depreciation: - Motor vehicles (1 January 2020) ............................................................................... 200 000 - Machinery (1 January 2020) ..................................................................................... 358 000 Bank overdraft .............................................................................................................. 247 525 Inventory at cost ............................................................................................................ 668 050 Investment at cost.......................................................................................................... 90 000 Trade and other receivables ......................................................................................... 232 496 Ordinary share capital.................................................................................................... 1 800 000 8% Non-cumulative preference shares .......................................................................... 1 500 000 7% Cumulative preference shares ................................................................................. 2 000 000 Dividends payable.......................................................................................................... 100 000 Accumulated loss........................................................................................................... 827 049 Additional information: The following transactions have not yet been recorded in the accounting records of Koopman Ltd for the year ended 31 December 2020: 1. Koopman Ltd maintained an annual gross profit of 35% on turnover during 2020. 2. On 1 March 2020, Koopman Ltd leased a machine from Sammy Ltd for a period of 3 years. The lease payments were agreed to be paid at an amount of R1 700 per month for the first 24 months and R2 000 per month for the last 12 months of the lease. These payments will be paid at the end of each month. The lease payments already made were recorded under other expenses. 10% of every lease payment goes toward covering the maintenance costs that will be paid for by Sammy Ltd. These values are in line with costs for similar maintenance services rendered by third parties. The contract is a lease in terms of IFRS 16. Koopman Ltd elected to apply the recognition exemption in respect of low value assets to this lease agreement. Koopman Ltd accounts for the lease and non-leased components separately. 3. Administrative expenses consist of the following: R Auditor’s remuneration – for audit fees .................................................................. 20 500 Auditor’s remuneration – travelling expenses......................................................... 4 000 Salaries and wages ............................................................................................... 1 074 000 Bank charges......................................................................................................... 4 500