FAC 3703 ASSIGNMENT 2

FAC3703 ASSIGNMENT 2 – SEMESTER 1 OF 2018 ENZO LTD NOTES FOR THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017 1. Profit before tax Profit before tax is shown after taking the following into account: 2017 R Income Finance Income (calculation 4) 79 966 Expenses Finance cost (300 000 ∗ 2 ∗ 9%) 54 000 2. Net Investment in finance leases 2.1. Reconciliation of net investment in finance leases: 2017 R Opening balance New leases entered into Repayments of Capital (128 048 + 133 166) Effect of lease modification 1 129 727 - (261 214) - Closing Balance 868 513 2.2. Maturity analysis of future finance lease instalments receivable at reporting date R R R Undiscounted lease payments (173 200 ∗ 2) Unearned Finance Income 346 400a (58 244)c 346 400a (34 750) d 346 400b (10 340)e Net Investment in the lease 060 a. 173 200 ∗ 2 = 346 400 b. (173 200 ∗ 2) + 50 000 = c. 17 356 + 29 177 + 11 711 = 58 244 d. 11 711 + 17 434 + 5 605 = 34 750 This study source was downloaded by from CourseH on :41:41 GMT -05:00 This study resource was shared via CourseH e. 5 605 + 4 735 = 10 340 3. Basic and Diluted Earnings per share Reconciliation of numerators used for basic and diluted earnings per share 2017 R Profit attributable to parent Cumulative preference dividends 6 242 250 (65 000) Basic Earnings 6 177 250 Increase in earnings (571 777 ∗ 10.5% ∗ 72%) 43 226 Diluted Earnings 6 220 476 Reconciliation of denominators used for basic and diluted earnings per share 2017 Shares Weighted average number of shares used for basic EPS 5 583 333a Convertible debentures (300 000 ∗ 1 2 ) 150 000 Weighted average number of shares used for diluted EPS 5 733 333 a. Calculation of weighted average number of shares Shares Balance – 1 July 2016 Issued 30 November 2016 (1 000 000 ∗ 7 12 ) 5 000 000 583 333 Weighted Average number of shares 5 583 333 CALCULATIONS 1. Calculation of interest rate implicit rate implicit in the lease N = 4 ∗ 2 = 8 (2 payments per year x 4 years) PV = 1 120 000 +