FAC3702 ASSESSMENT 1 SEM 1 OF2025 EXPECTED QUESTIONS AND ANSWERS

Started on Wednesday, 19 March 2025, 10:21 PM
State Finished
Completed on Wednesday, 19 March 2025, 10:45 PM
Time taken 24 mins 28 secs

Question 1
The carrying value of a patent at 31 December 2023 and 31 December 2024
Complete amounted to R80 000 and R150 000 respectively. The tax base of the patent at 31
Marked out of December 2023 and 31 December 2024 amounted to R60 000 and R102 000,
1.00 respectively. The tax rate is 27%. The company provides for deferred tax on all
Flag temporary differences using the statement of financial position approach. What is
question the deferred tax movement in respect of the internally generated intangible asset
for the year ended 31 December 2024?



a. R5 400 (debit P&L)

b. R12 960 (debit P&L)
c. R7 560 (debit P&L)

d. R5 400 (debit OCI)




Question 2
A company purchased land for R2,000,000. It demolished an old building for
Complete
R300,000 and sold the scrap for R50,000. It then spent R150,000 on site
Marked out of preparation. What is the total cost of land?
1.00

Flag
question


a. R2,300,000

b. R2,400,000
c. R2,450,000

d. R2,500,000




Question 3
Which of the following is a required disclosure under IAS 38?
Complete
Marked out of
1.00

Flag a. The market value of all intangible assets.
question
b. The fair value of internally generated goodwill.
c. The carrying amount of each class of intangible asset.
d. The historical cost of all disposed intangible assets.




Question 4

, Complete A company uses the cost model and determines that an asset with a carrying
Marked out of amount of R2,000,000 has a fair value of R2,500,000 due to market fluctuations.
1.00 Under IAS 16, how should this be accounted for?
Flag
question

a. Recognize a gain of R500,000 in profit or loss
b. Recognize a gain of R500,000 in OCI

c. No adjustment is required.
d. Record an impairment reversal in OCI




Question 5
Which of the following is TRUE regarding changes in depreciation method under
Complete
IAS 16?
Marked out of
1.00

Flag
question
a. It is considered a change in accounting estimate and applied
prospectively
b. It is considered a change in accounting policy and applied retrospectively

c. It requires prior period restatement to ensure comparability
d. It is recognized as an error correction in retained earnings




Question 6
A company has their own research and development department and makes use
Complete of local research institutes. The following information is relevant to development
Marked out of costs in respect of a new plant:
1.00
Development costs capitalised amounted to R80 000 and R100 000 for the
Flag
question
financial years ending 31 December 2022 and 31 December 2023 respectively,
after the product met all the criteria for it to be classified as an intangible asset.
Production commenced on 1 June 2023.
The economic benefits that will be enjoyed by the company are expected to far
exceed the development costs.
The marketing division estimates that the product will only be sold for a limited
period and estimates the annual sale, in units, as follows:
1 June 2023 – 31 December 2023 800 000 units
1 January 2024 – 31 December 2024 1 800 000 units
1 January 2025 – 31 December 2025 1 200 000 units
1 January 2026 – 31 December 2026 1 000 000 units


The full production is sold during the relevant financial period and there is no
inventory on hand at year-end.
What is the amortization amount in respect of the internally generated intangible
asset for the year ended 31 December 2024?



a. R37 500