1
Question1 (24 marks)(29 minutes)
Revenue (536 820 - 2 000)
Cost of Sales
Opening inventory (not given)
Purchases (302 530 - 2 400)
Carriage on purchases (invoice = dated for this year)
Closing inventory
Gross profit
Other income
Credit losses recovered
Profit on traded-in equipment
Distribution, admin & other expenses
Salaries & Wages (123 600 - 36 000 - 38 000)
General expenses
Water and electricity (41 160 - 10 400)
Depreciation (75 + 14 250 + 1 875 + 28 800)
Telephone expenses
Property Rates
Advertising (10 400 - 800)
Finance costs
Interest on loan (4 320 + 2 160)
Total comprehensive income for the year
534 820
(277 330)
0
300 130
5 280
(28 080)
257 490
3 575
3 000
575
(213 850)
49 600
38 720
30 760
45 000
23 160
17 010
9 600
(6 480)
6 480
40 735
Calculations:
1. Must be excluded from Salaries and Wages, & Dr Drawings
2.
6 months
6 months
28/2/2011 = 1/3/2011
1/9/2010
31/8/2011
Veh: R144 000
ADV: R12 000
Eq: R120 000
- R15 000 + R25 000
= R130 000
ADE: R24 000
+ R75 – R14 075
+ Depr at end of year
Depr (eq): Sold: 15 000: Depr = R75 (given) {(15 000 – 14 000) x 15% x 6/12 = 75}
Carrying amount: 15 000 – 14 000 – 75 = 925
Proceeds: 1 500
thus: profit = R575
Old: CP: 120 000 – 15 000 = 105 000
AD: 24 000 – 14 000 = 10 000
Depr: (105 000 – 10 000) x 15% = 14 250
New: (25 000 – 0) x 15% x 6/12 = 1 875
Depr (veh): 144 000 x 20% = 28 800
3. Int on loan: 108 000 x 12% x 6/12 = 6 480
(4 320 = paid, thus R2 160 = accrued)
4. Advertising: 10 400 = 13 months thus 10 400/13 = 800 prepaid
Unisa FAC1601 Oct/Nov 2011 exam suggested solution
2
Question 2 (18 marks)(21 minutes)
Balances
Close ARR
Transfer Loan: Morg
Debtors (80% less10% disc)
Life insurance policy
Sold Furn & equip
Pay Liabilities
Totals
First interim payment
Interim payment schedule
Bank
ARR
15 000 (20 000)
20 000
PPE
Investment
202 000
100 000
Loan:
Morgan
(12 000)
Long-term
Loan
Debtors
(80 000) 105 000
5
3
Cap: Bob
(130 000)
(10 000)
(84 000)
4 200
(12 500)
Cap: Morg
(100 000)
(6 000)
(12 000)
2 520
(7 500)
21 000
21 000
(148 300)
51 800
(96 500)
(122 980)
65 080
(57 900)
12 000
75 600
25 000
130 000
(80 000)
165 600
(165 600)
0
Bank
165 600
Possible loss
165 600
2
Cap:
Arthur
(80 000)
(4 000)
1 680
(5 000)
(130 000)
0
72 000
100 000
0
80 000
0
0
72 000
100 000
0
0
Assets
193 000
(193 000)
0
5
Cap: Bob
(148 300)
96 500
(51 800)
3
Cap: Morg
(122 980)
57 900
(65 080)
Unisa FAC1601 Oct/Nov 2011 exam suggested solution
2
Cap: Arthur
(87 320)
38 600
(48 720)
(87 320)
48 720
(38 600)
3
Question 3 (29 marks)(35 minutes)
Profit for the year:
Profit before tax
Credit losses
Allowance decrease (5 000 - 4 700)
Income tax
Int on loan from member (93 800 x 8%)
Int on loan to member (70 500 x 10% x 2/12)
Dividends earned (50 000 x R0.20)
Gain on fin assets ((R5 - R4) x 50 000)
Adjusted profit for the year
3.1 Retained earnings:
Balance at 1/3/2010
Tot Comprehensive income for the year
Distributions
(42 000 + 44 800)
Balance at 28/2/2011
498 900
(3 000)
300
(126 500)
(7 504)
1 175
10 000
50 000
423 371
472 000
423 371
(86 800)
808 571
3.2 Statement of financial position as at 28 February 2011
Assets
Non-current assets
Property, plant and equipment (747 000 + 120 000 - 24 000)
Investments (295 000 + 50 000)
Current assets
Inventory
Trade and other receivables
(35 600 - 3 000 - 1 500 - 4 700 + 10 000)
Prepayments
Cash and cash equivalents (48 100 + 2 800)
Loan to member (70 500 + 1 175)
Total assets
Equity and liabilities
Member's equity
Member's contribution (120 000 + 95 000)
Retained earnings
Non-current liabilities
Loan from members (50% x R44 800)
Mortgage
Current liabilities
Trade and other payables (25 100 + 14 660 + 7 504)
SARS (Income tax payable) (126 500 - 116 600)
Loan from members
Distributions payable (44 800 / 2)
Total equity and liabilities
Unisa FAC1601 Oct/Nov 2011 exam suggested solution
1 188 000
843 000
345 000
263 335
99 312
36 400
5 048
50 900
71 675
1 451 335
1 023 571
215 000
808 571
254 400
22 400
232 000
173 364
47 264
9 900
93 80
22 400
1 451 335
4
Question 4 (20 marks)(24 minutes)
Calculations:
Profit for the year
Sales
Less COS
GP
Income
Rent income
599 760
(280 500)
319 260
23 800
13 600
Div rec
Exp
Interest exp
Credit losses
Water & electricity
Depreciation
Profit before tax
Tax
Profit for the year
10 200
(109 224)
8 500
5 700
34 334
60 690
233 836
(136 816)
97 020
Retained earnings
Balance 2010
Profit
Distributions
Balance 2011
Distributions:
150 820 - 97 020 - 53 800 =
Calc a: Cash received from customers:
Debtors 2010
Sales for the year
Less actual credit losses (5 700 - 700)
(Allowance adjustment: 3 700 - 3 000 = 700)
Less debtors 2011
Cash from debtors
Accrued rent 2010
Rental income
Accrued rent 2011
Cash received from customers
(63 136)
594 124
0
13 600
(6 800)
600 924
Calc b: Cash paid to suppliers and employees
Creditors 2010
Purchases (280 500 - 20 320 + 34 260)
Less Creditors 2011
Cash paid to creditors
Accrued Water & electricity
Less prepaid Water & electricity
Water & electricity
Less accrued Water & electricity
Plus Prepaid Water & electricity
Cash paid to suppliers and employees
45 520
294 440
(90 080)
249 880
0
(10 400)
34 334
(4 400)
0
269 414
Unisa FAC1601 Oct/Nov 2011 exam suggested solution
62 500
599 760
(5 000)
53 800
97 020
??
150 820
0
5
Statement of cash flows for the year ended 31 August 2011
Cash flows from operating activities
Cash received from customers (calc a)
600 924
Cash paid to suppliers and employees (calc b)
(269 414)
Cash generated from operations
331 510
Dividends received
10 200
Interest paid
(8 500)
Tax paid (27 200 + 136 816 - 40 800)
(123 216)
Distributions paid (73 400 + 0 - 51 000)
(22 400)
Net cash flows from operating activities
187 594
Question 5 (9 marks)(11 minutes)
5.1
n = 4 x 4 = 16 periods
PV = R10 000
i = 8% ÷ 4 = 2%
FV
= PV x FVIF(2%,16)
= 10 000 x 1.373
= 13 730
5.2
35 700 – 13 730 = 21 970
N = 4 x 2 = 8 periods
i = 12% ÷ 2 = 6%
FVA = p x FVIFA(6%,8)
21 970 = p x 9.897
p = 21 970 / 9.897
= R2 219.86 ≈ R2 200 (every 6 months)
Monthly = R2 200 / 6 = R370 monthly
(I think this was an error and they intended to ask what amount must be invested half-yearly not
monthly....)
Unisa FAC1601 Oct/Nov 2011 exam suggested solution