FAC3703

QUESTION 1 (39 Marks)(70.2 Minutes) MotorVee Ltd is a large entity that manufactures cars and is a dealer in the motor vehicle industry. The vehicles manufactured by MotorVee Ltd are sold to the public as well as corporate clients, they produce consumer luxury vehicles as well as commercial vehicles. The company has a 30 June year-end. Due to the COVID-19 pandemic, the sales volume of motor vehicles sold by MotorVee Ltd had declined, however, an increased number of motor vehicles were leas...

a) Calculate employee benefits W1. Salary: (275 000 x 9 months [Apr – Dec]) 2 475 000 (275 000 x 3 months [Jan – Mar] x 100/110) 750 000 Bonus paid: 275 000 Bonus obligation OB: (275 000 x 1/12) (22 917) Bonus obligation CB: (275 000 x 1,1 x 1/12) 25 208 Leave obligation OB: (52 145) Leave obligation CB: (24 – 6 – 8) = 10 days x 60% = 6 days 62 857 .’. 6 days x 275 000 x 12x 80% 252 days Shortterm employee benefits 3 513 003 W2. (2 475 000 + 750 000) (W1) x 7,5% = 241 875 ...

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

PROFIT BEFORE TAX Profit before tax includes the following items: Income Interest Income Expenses [C1 & C2] 85 406 Interest Expenses [C3 & C4] 107 164 Depreciation: Right-of-Use assets [C5 to C10] 290 536 LEASES Right-of-Use Assets Carrying amount at beginning of year (1 924 436 – 380 887) [C9] Equipment 1 543 549 Total 1 543 549 Depreciation for the year [C10] -290 536 -290 536 Adjustments for lease remeasurement [C8] -161 407 -161 407 1 091 606 1 091 606 Maturity analysis ...

1. Profit before tax Profit before tax is stated after taking the following items into account R Incomes Finance Income 85 406 Expenses Finance Cost 107 164 Depreciation: Right of use asset 300 536 2. Leases 2.1. Right of use asset Carrying amount at beginning of year [