WOMEN’S UNIVERSITY IN AFRICA

Addressing gender disparity and fostering equity in University Education

FACULTY OF MANAGEMENT AND ENTREPRENEURIAL SCIENCES

BSc HONOURS DEGREE IN MANAGEMENT AND ENTREPRENEURIAL

DEVELOPMENT STUDIES SPECIALISING IN BANKING AND FINANCE
BACHELOR OF COMMERCE HONOURS DEGREE IN ACCOUNTING

ASSIGNMENTS

FINANCIAL ACCOUNTING IB

KBAS 121: SECOND YEAR SECOND SEMESTER

DATE: NOV-DEC 2024 TIME: 3HOURS

INSTRUCTIONS TO CANDIDATES
Answer question ALL three questions.
Question 1 –IAS 1 (Preparation and Presentation of Financial Statements)
The following trial balance relates to Econet Wireless Limited. A company listed on the
Zimbabwe Stock Exchange.
Debit Credit
Sales 700,000
Purchases 346,000
Sales returns 10,000
Purchases returns 5,000
Opening stock 12,000
Salaries and wages 60,000
Electricity and water 15,000
Advertising and promotions 8,000
Rent and rates 12,000
Delivery expenses 7,000
Debtors 100,000
Creditors 120,000
Premises 300,000
Computers 100,000
Furniture and fittings 70,000
Motor vehicles 100,000
5% Debentures 150,000
Insurance 16,000
Ordinary shares of $1 each 150,000
Share Premium 30,000
General reserve 20,000
Bad debts written off 16,000
Bank charges 3,000
--------------- -------------
1,144,000 1,175,000
--------------- -------------
Additional information
Closing stock was valued at $25,000
Provide depreciation as follows: Computers 10%, Furniture 10% and Motor vehicles 20%
Insurance prepaid by $6,000
Rent accrued by $4,000
Transfer $10,000 to the general reserves
Provide for an ordinary dividend of $20,000

Required:
a) Statement of profit or loss for the year ended 31 December 2023 in line with IAS 1
Presentation of Financial Statements (15 marks)
 b) Statement of changes in equity for the year ending 31 December 2023 in line with
IAS 1 (10 marks)
c) Statement of financial position as at 31 December 2023 in line with IAS 1
Presentation of Financial Statements (15 marks)
d) Notes to the financial statements
NB
Consider the statement below for your presentation
i) Classify advertising, delivery expenses and motor vehicle depreciation as selling
and distribution expenses
ii) The rest classify as administration expenses.
iii) Charge the 5% Debenture interest
iv) Provide for tax of 25% on profit before tax.

TOTAL -10 MARKS

Question 2 IAS 16 (Property, Plant and Equipment)

Picot Private Limited register for Property, Plant & Equipment on 01 January 2023 contained
the following information:

US$ -Cost US$ -Accumulated Dep

Land at 13,500,000.00 0.00

Machinery

Machine A 1,350,000.00 630,000.00

Machine B 5,670,000.00 1,134,000.00

Machine C 1,620,000.00 370,000.00

Motor Vehicles 5,400,000.00 2,800,000.00

Furniture & Fittings 1,980,000.00 720,000.00

Additional Information

1. The above PPE items are depreciated as follows: machine A 25% reducing balance,
machine B 20% reducing balance, machine C 25% reducing balance, Furniture 15%
straight line, motor vehicles 20% straight line.
 2. On 30 June 2023, a vehicle which originally cost $1,600,000.00 was sold for
$675,000.00, and this amount was erroneously credited to the motor vehicles account.
The accumulated depreciation on this motor vehicle on 01 January 2023 was
$990,000.00
3. The land is not depreciated and is held for future use.

Required:

Disclose the PPE items and the related depreciation in the financial statements of WUA Ltd
for the year ended 31 December 2023 to comply with IAS 16 and IRFS. Show all your workings
(20 marks)

Income statement extract (1 marks), Balance Sheet extract (1 marks)

Accounting policy note (3 marks), Property, Plant & Equipment note (5 marks)

TOTAL – 10 MARKS

Question 3 IAS 2 (Inventories)

Beta Bricks Ltd manufactures red common bricks for various construction projects. The normal
capacity of the factory is 400,000 bricks per year. During the year ended 31 December 2023,
450,000 bricks were produced to meet high demand.

On 01 January 2023, there were 50,000 bricks on hand, and 430,000 pairs were sold during the
current year. The company does not keep inventories of raw materials.

The following information applies to the year ended 31 December 2023

US$ US$

Opening inventories (finished goods) 2,400,000.00

Raw materials purchased 1,750,000.00

Auditors remuneration 170,000.00

Directors remuneration 250,000.00

Advertising 348,000.00

Telephone 183,000.00
Depreciation:

Plant 228,000.00

Office Equipment 167,000.00

Motor vehicles (admin & delivery) 195,000.00

Furniture 116,000.00 706,000.00

Electricity & water (plant) 210,000.00

Repairs & maintenance:

Plant (75% fixed) 270,000.00

Motor vehicles (admin& delivery) 315,000.00

Consumable inventories used in production 230,000.00

Factory direct wages 3,600,000.00

Factory salaries 495,000.00

Pension fund contributions 180,000.00

Medical aid contributions 200,000.00

It is estimated that 65% of salaries, pension fund and medical aid contributions are attributable
to the management and supervision of the manufacturing activities. On 31 December 2023, the
estimated net realizable value of the finished goods inventory was US$1,120,000.00.

Required:

Calculate the value of the closing inventory on 31 December 2023 to comply with IAS # 2
Inventories (10 marks)

TOTAL -10 MARKS

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