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Exam Revision

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32 views

Exam Revision

Uploaded by

mankonyanemaduo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Exam Revision

Section A: Answer all THREE questions in this section_______________

Question 1
On 1 January 2022, Boitumelo Ltd (which prepares accounts to 31 December) enters
into a four-year lease of office machinery. The company is required to make four lease
payments of P30 000 and these falls due on 1 January 2022, 2023, 2024 and 2025.
The rate of interest implicit in the lease is 9% per annum.

Required:

From the above information, calculate for the year ended 31 December 2022:
a) Right-of-use asset (5 marks)
b) Non-current Lease liability (5 marks)
c) Current Lease Liability (2marks)
d) Interest expense (2 marks)
e) Define the term “lease” in accordance with IFRS16 Leases, explain what is
meant by the inception of a lease and the commencement of a lease.
(6 marks)

Total marks: 20 marks


Question 2
The summarized statement of comprehensive income of Botho Ltd for the year to 30
June 2022 is shown below, together with the company’s statement of financial position
at that date (with comparatives for the previous year).

Statement of comprehensive income for the year to 30 June 2022

P
Operating profit 170 200
Investment income 7 100
Interest payable (6 120)

Profit before taxation 171 180


Taxation (37 870)

Profit of the year 133 310

Statement of financial position at 30 June 2022

2022 2021
Assets P P
Non-current assets
Property, plant & equipment at cost 369 300 210 000
Less: Accumulated depreciation (151 650) (107 340)
217 650 102 660

Investments at cost 120 000 120 000


` 337 650 222 660

Current assets

Inventories 86 220 97 430


Trade receivables 82 610 58 100
Prepaid expenses 7 200 176 030 7 000 162 530
513 680 385 190

Equity
Ordinary share capital 120 000 100 000
Retained earnings 195 850 147 540
315 850 247 540
Liabilities
Non-current liabilities
Debenture loans 75 000 50 000

Current liabilities
Trade payable 40 920 44 310

Accrued expenses 9 130 8 250


Taxation 37 870 32 300
Bank overdraft 34 910 122 830 2 790 87 650
513 680 385 190

Notes:
(i)There were no disposals of non-current assets during the year to 30 June 2022.
(ii)A divided of P85 000 was paid during the year.

Required:

Prepare a statement of cashflows for the year ended 30 June 2022 in accordance
with requirements of IAS 7, using the indirect method (the format is provided in the
appendix). (25 marks)

Total marks: 25
Question 3
Katlego Ltd acquired 75% of ordinary shares of Atlega Ltd on 1 April 2022. There are no
preference shares. Both companies prepare accounts to 30 September each year. The
statements of comprehensive income and the movement in retained earnings for Katlego
Ltd and Atlega Ltd for the year ended 30 September 2021 are as follows:

Katlego Ltd Atlega Ltd

Statement of comprehensive income


For the year ended 30 September 2022
Pula Pula
Sales revenue 317,500 96,000
Cost of sales 149,500 31,200
Gross profit 168,000 64,800
Distribution costs 36,300 4,800
Administrative expenses 59,400 20,400
Operating profit 72,300 39,600
Taxation 21,000 8,000
Profit for the year 51,300 31,600

Movement in retained earnings


For the year ended 30 September 2022
Pula Pula
Balance as at 30 September 2021 112,600 77,700
Profit for the year 51,300 31,600
Balance as at 30 September 2022 163,900 109,300

The following information is also available:

a) Two-thirds of the sales, cost of sales and distribution costs of Atlega Ltd occur in the
second half of the accounting period.
b) Administrative expenses are spread evenly over the accounting period.
c) P5,000 of Atlega Ltd.’s tax liability was incurred in the second half of the year.
d) Other comprehensive income was nil.
e) Goodwill arising on consolidation has not suffered any impairment.
Required:
a) Prepare a consolidated statement of comprehensive income for the year ended
30 September 2022. (15 marks)
b) Restate the group’s retained earnings as at that date. (5 marks)
c) Explain how goods purchased by Atlega Ltd from Katlego Ltd between 1 April 2022
and 30 September 2022 should be treated in the group’s consolidated financial
statement. (5 marks)
Total marks: 25

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