FAC2601
EXAM PACK
QUESTIONS WITH SOLUTIONS
,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 2021:
Ordinary share capital (shares issued at R2.30 each) R1 265 000
Proceeds of ordinary shares issued on 30 June 2021 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 2021:
The directors decided on a capitalisation share issue of 1 share for every 5 shares held as at
31 October 2021 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 hasa 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 2020 financial
year, Khoza Ltd did not have sufficient funds to pay for the preference shares dividends. During
the following year, 2021, Khoza Ltd decided to declare and pay dividends for both 2020 and 2021.
How much will be accounted for as dividends declared and paid in the 2021 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 2021:
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 2021) ............................................................... 880 000
Motor vehicles at carrying amount (1 January 2021)...................................................... 300 000
Machinery at carrying amount (1 January 2021) ............................................................ 748 000
Accumulated depreciation:
- Motor vehicles (1 January 2021) ............................................................................... 200 000
- Machinery (1 January 2021) ..................................................................................... 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 2021:
1. Koopman Ltd maintained an annual gross profit of 35% on turnover during 2021.
2. On 1 March 2021, 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
EXAM PACK
QUESTIONS WITH SOLUTIONS
,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 2021:
Ordinary share capital (shares issued at R2.30 each) R1 265 000
Proceeds of ordinary shares issued on 30 June 2021 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 2021:
The directors decided on a capitalisation share issue of 1 share for every 5 shares held as at
31 October 2021 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 hasa 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 2020 financial
year, Khoza Ltd did not have sufficient funds to pay for the preference shares dividends. During
the following year, 2021, Khoza Ltd decided to declare and pay dividends for both 2020 and 2021.
How much will be accounted for as dividends declared and paid in the 2021 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 2021:
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 2021) ............................................................... 880 000
Motor vehicles at carrying amount (1 January 2021)...................................................... 300 000
Machinery at carrying amount (1 January 2021) ............................................................ 748 000
Accumulated depreciation:
- Motor vehicles (1 January 2021) ............................................................................... 200 000
- Machinery (1 January 2021) ..................................................................................... 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 2021:
1. Koopman Ltd maintained an annual gross profit of 35% on turnover during 2021.
2. On 1 March 2021, 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
