FAC1601 Assignment 5 Semester 2 2023 FAC1601 ASSIGNMENT 5 SEMESTER 2 2023 SOLUTIONS, EXPLANATIONS, WORKINGS, AND REFERENCES

FAC1601 Assignment 5 Semester 2 2023 FAC1601 ASSIGNMENT 5 SEMESTER 2 2023 SOLUTIONS, EXPLANATIONS, WORKINGS, AND REFERENCES Extract from ledger account balances as at 30 September: R R Share capital: Ordinary shares Share capital: Preference shares Retained earnings Long-term loan - ABC Bank Land and buildings at cost Machinery and equipment at carrying amount Inventory Trade receivables control Listed investments 110 000 0 Bank Trade payables control SARS (income tax) Dividends payable Dividends receivable 0 0 Accrued expenses (wages) 0 11 400 Prepaid expenses Revenue 805 800 Cost of sales 392 400 Administrative, distribution and other expenses 160 200 Fair value gain on listed investments 8 600 Dividends income 20 800 Loss on sale of machinery and equipment 10 100 Income tax expense 55 200 Depreciation 15 500 Wages 84 400 Insurance expense 14 100 2. Additional information 2.1 The following pertains to property, plant and equipment: During the year machinery and equipment with a carrying amount of R95 000 was sold for cash. This transaction has been correctly recorded. Land and buildings with a cost price of R110 000 were sold for cash at the same amount. Land and buildings are not depreciated. All purchases of property, plant and equipment pertained to replacements and were paid in full. 2.2 On 29 September 2022 Honey Limited declared ordinary shares dividend of 50 cents per share whilst the preference shares dividends amounted to R40 800. 2.3 The interest expense paid on the long-term loan amounted to R16 800 and is not yet recorded. 2.4 On 31 August 2022, when the total number of ordinary shares issued were 120 000 shares, the shareholders approved the capitalisation issue of one (1) ordinary share for every four (4) ordinary shares held. The capitalisation issue was done from retained earnings at R0,50 per share. All other issued shares were paid for in cash. QUESTION 1 Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers in the cash generated from operations section according to direct method in the statement cash flows of Honey Limited for the year ended 30 September 2022? 1. 686 000 2. 796 400 3. 606 000 4. 750 000 5. 850 200