FAC1601 EXAM SEM 1 OF 2026 EXPECTED ANSWERS

QUESTION 1: Statement of Profit or Loss and Other
Comprehensive Income


MYSEAL INDUSTRIAL COMPONENTS LTD




STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 31 AUGUST 2025


Description Amount (R)
Revenue (865 900 - 3 400 - 2
860 300
200)
Cost of sales (395 800)
Opening inventory 0
Purchases 421 300
Carriage on purchases
5 900
(transport costs)
Closing inventory (31 400)
Gross profit 464 500
Other income 8 249

Settlement discount received 3 700

Credit losses recovered 4 300
Profit on sale of equipment
249
(W1)
Other expenses (237 042)
Telephone expenses (2 100)
Municipal expenses (25 000)
General expenses (56 800)

Software licence subscriptions
(31 200)
(33 × 12)

Factory water and electricity
(19 800)
(53 600 - 33 800)

Security expenses (82 ) (41 000)

Salaries and wages (6 500 -
75 500
82 000)
Depreciation (W2) (92 742)

Profit before interest and tax 235 707

Finance costs (Interest on
(8 569)
loan: 158 200 × 13% × 5/12)
Profit for the year 227 138

, Workings:



(W1) Profit on sale of
equipment
R
Cost of old equipment 16 800
Less: Accumulated
(15 200)
depreciation

Less: Current depreciation (1
-149
600 × 16% × 7/12)

Carrying amount of old
1 451
equipment


Trade-in allowance 1 700
Less: Carrying amount (1 451)

Profit on sale of equipment 249


(W2) Depreciation
R
Vehicles (232 300 × 18%) 41 814
Old equipment sold (1 600 ×
149
16% × 7/12)
New equipment (28 000 ×
1 867
16% × 5/12)
Remaining equipment:
Equipment cost (355 500 – 28
327 500
000)

Less: Accumulated
(21 800)
depreciation (37 000 – 15 200)

Carrying amount of
305 700
remaining equipment
Depreciation at( ( [(355 500 -
28 000) - (37 000 - 15 200)] ×
48 912
16% = (327 500 - 21 800) ×
16%)


Total depreciation 92 742