FINANCIAL REPORTING AND ANALYSIS
JUNE 2021
MEMORANDUM
PREPARED BY: MTHOMBENI
0767297208
, Question 1
1.1 False
The Statement of Changes in Equity reports changes to investments by the partners
and retained earnings
1.2 False
Statement of Comprehensive income reports financial performance of an enterprise
for a particular period
1.3 False
Loan obtained will result in an inflow of cash since money will be received by the
business
1.4 True
Bank overdraft forms part of current liabilities since it satisfies the criterion of
current liabilities
1.5 True
R100000+R7000-R6000=R101000
1.6 A
The business bought inventory and this inventory will increase assets since it’s a
resource that is controlled by the business for future economic. The inventory was
bought on credit and this will increase the debts(liabilities) of the business
1.7 D.
Double entry system states that whatever is made on the debit should also be made
on the credit side, in order words for every debit entry there should be a
corresponding entry so that the equation balances
1.8 R1250
For a fixed sold, depreciation will be calculated from the beginning of the financial
period until the last day a fixed asset existed. The beginning of the financial is 1
March 2020 and this vehicle was last seen in the business premises on the 31 st of
August 2020. Depreciation will be calculated for six months (March to August)
R25000X6/12X10%
1.9 Profit/loss R750
To workout profit/loss, a comparison between the selling price and the carrying value
should be made.
If the selling price is greater than the carrying value, a profit will be generated
If the selling price is less than the carrying value, a loss will be suffered
1
JUNE 2021
MEMORANDUM
PREPARED BY: MTHOMBENI
0767297208
, Question 1
1.1 False
The Statement of Changes in Equity reports changes to investments by the partners
and retained earnings
1.2 False
Statement of Comprehensive income reports financial performance of an enterprise
for a particular period
1.3 False
Loan obtained will result in an inflow of cash since money will be received by the
business
1.4 True
Bank overdraft forms part of current liabilities since it satisfies the criterion of
current liabilities
1.5 True
R100000+R7000-R6000=R101000
1.6 A
The business bought inventory and this inventory will increase assets since it’s a
resource that is controlled by the business for future economic. The inventory was
bought on credit and this will increase the debts(liabilities) of the business
1.7 D.
Double entry system states that whatever is made on the debit should also be made
on the credit side, in order words for every debit entry there should be a
corresponding entry so that the equation balances
1.8 R1250
For a fixed sold, depreciation will be calculated from the beginning of the financial
period until the last day a fixed asset existed. The beginning of the financial is 1
March 2020 and this vehicle was last seen in the business premises on the 31 st of
August 2020. Depreciation will be calculated for six months (March to August)
R25000X6/12X10%
1.9 Profit/loss R750
To workout profit/loss, a comparison between the selling price and the carrying value
should be made.
If the selling price is greater than the carrying value, a profit will be generated
If the selling price is less than the carrying value, a loss will be suffered
1
