FAC2601
EXAM COURSE - EXAM PACK
SEMESTER 1
2019
ACADEMIC HEAD
Charles Forbes
Shop U21, Stoneridge Centre, 1 Stoneridge Drive, Greenstone Park, Edenvale, Johannesburg, 1610
Postnet Suite #448, Private Bag x10010, Edenvale, 1610 • www.ebs.co.za • +27 11 038 5300
, 1
FAC2601 May-Jun 2015
Suggested solution
Question 1
1.1) Jupiter Ltd
Statement of profit or loss and other comprehensive income for the year ended 28
February 2015
2015
Revenue (11 400 000 x 100/114) + (4 000 000) 14 000 000
Cost of sales (5 600 000)
Gross profit 8 400 000
Other income (76 000 + 50 000(W3)) 126 000
Admin expenses (4 340 000) (4 340 000)
Distribution costs (536 000) (536 000)
Other expenses (740 000 – 16 200(W2)) (723 800)
Finance costs (16 200(W2)) (16 200)
Profit before tax 2 910 000
Income tax expense (818 380)
Profit for the year 2 091 620
Other comprehensive income (OCI) 120 000
Gain on financial asset at FVOCI (W4) 20 000
Revaluation gain on land (1 000 000 – 900 000) 100 000
Total comprehensive income for the year 2 211 620
1.2) Jupiter Ltd
Notes to the financial statement for the year ended 28 February 2015
2. Profit before tax
Profit before tax includes:
Income
Revenue 14 000 000
Income from subsidiary: Neptune Ltd 36 000
Dividend income 24 000
Interest received 12 000
Income from financial assets
Listed investment: Mercury Ltd
Dividend income 40 000
Fair value gain on financial asset at FVTPL (W3) 50 000
Expenses
Staff costs 4 000 000
Auditors remuneration 96 000
Audit fees 70 000
Forensic fees 10 000
Travel expenses 16 000
Finance costs (W2) 16 200
Depreciation (W7) 104 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
, 2
3. Directors’ and prescribed officers’ remuneration
Salary Directors’ Fees Other Pension Less: paid Total
benefits by
subsidiary
Executive directors
Mr A (W1) 630 000 10 000 34 000 48 000 (160 000) 562 000
Mr D 400 000 10 000 - - - 410 000
Non-executive directors
Mrs B 240 000 10 000 - 24 000 - 274 000
Prescribed officers
Mr C 360 000 - 12 000 - - 372 000
1 630 000 30 000 46 000 72 000 (160 000) 1 618 000
Other Travelling Entertainment
benefits allowance allowance
Mr A 34 000 12 000
Workings:
Travelling allowance
W1.
Jupiter Ltd
Salary Fees Other Pension
Mr A 480 000 10 000 24 000 48 000
150 000 10 000 (160 000)
630 000 10 000 34 000 48 000
W2. 6m 6m
1 Jan 28 Feb 28 Feb 28 Feb 28 Feb 28 Feb
2007 2011 2012 2013 2014 2015
Received loan
31 Aug 31 Aug Pmt 3 Pmt 4
2011 2012
Pmt 1 Pmt 2
Balance outstanding at 28 February 2015 = 90 000
5 payments, 4 already made
.’. 1 payment remaining = 90 000
.’. OB = 90 000 + 90 000 = 180 000
CB = 90 000
.’. Finance cost: 180 000 x 12% x 6/12 = 10 800
90 000 x 12% x 6/12 = 5 400
16 200
W3. (100 000 shares x R3) – (100 000 shares x R2,50) = 50 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
, 3
W4. (5 000 shares x R12) – R40 000 = 20 000
W5. Motor vehicles
Total Sold Rest
480 000
(120 000)
360 000 160 000 200 000
Depreciation to DoS
(160 000 x 20% x 6/12) (16 000)
Depreciation
(200 000 x 20%) (40 000)
CA at date of sale 144 000 160 000
W6. Equipment
1 Mar 28 Feb 28 Feb 28 Feb
2012 2013 2014 2015
CA at EOY = 96 000
3 years depreciation completed OR 96 000 x 100/40 = 240 000
.’. 96 000/2 remaining years = 48 000 .’. 240 000 x 20% = 48 000
W7. Total depreciation
= 56 000 (W5) + 48 000 (W6)
= 104 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
EXAM COURSE - EXAM PACK
SEMESTER 1
2019
ACADEMIC HEAD
Charles Forbes
Shop U21, Stoneridge Centre, 1 Stoneridge Drive, Greenstone Park, Edenvale, Johannesburg, 1610
Postnet Suite #448, Private Bag x10010, Edenvale, 1610 • www.ebs.co.za • +27 11 038 5300
, 1
FAC2601 May-Jun 2015
Suggested solution
Question 1
1.1) Jupiter Ltd
Statement of profit or loss and other comprehensive income for the year ended 28
February 2015
2015
Revenue (11 400 000 x 100/114) + (4 000 000) 14 000 000
Cost of sales (5 600 000)
Gross profit 8 400 000
Other income (76 000 + 50 000(W3)) 126 000
Admin expenses (4 340 000) (4 340 000)
Distribution costs (536 000) (536 000)
Other expenses (740 000 – 16 200(W2)) (723 800)
Finance costs (16 200(W2)) (16 200)
Profit before tax 2 910 000
Income tax expense (818 380)
Profit for the year 2 091 620
Other comprehensive income (OCI) 120 000
Gain on financial asset at FVOCI (W4) 20 000
Revaluation gain on land (1 000 000 – 900 000) 100 000
Total comprehensive income for the year 2 211 620
1.2) Jupiter Ltd
Notes to the financial statement for the year ended 28 February 2015
2. Profit before tax
Profit before tax includes:
Income
Revenue 14 000 000
Income from subsidiary: Neptune Ltd 36 000
Dividend income 24 000
Interest received 12 000
Income from financial assets
Listed investment: Mercury Ltd
Dividend income 40 000
Fair value gain on financial asset at FVTPL (W3) 50 000
Expenses
Staff costs 4 000 000
Auditors remuneration 96 000
Audit fees 70 000
Forensic fees 10 000
Travel expenses 16 000
Finance costs (W2) 16 200
Depreciation (W7) 104 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
, 2
3. Directors’ and prescribed officers’ remuneration
Salary Directors’ Fees Other Pension Less: paid Total
benefits by
subsidiary
Executive directors
Mr A (W1) 630 000 10 000 34 000 48 000 (160 000) 562 000
Mr D 400 000 10 000 - - - 410 000
Non-executive directors
Mrs B 240 000 10 000 - 24 000 - 274 000
Prescribed officers
Mr C 360 000 - 12 000 - - 372 000
1 630 000 30 000 46 000 72 000 (160 000) 1 618 000
Other Travelling Entertainment
benefits allowance allowance
Mr A 34 000 12 000
Workings:
Travelling allowance
W1.
Jupiter Ltd
Salary Fees Other Pension
Mr A 480 000 10 000 24 000 48 000
150 000 10 000 (160 000)
630 000 10 000 34 000 48 000
W2. 6m 6m
1 Jan 28 Feb 28 Feb 28 Feb 28 Feb 28 Feb
2007 2011 2012 2013 2014 2015
Received loan
31 Aug 31 Aug Pmt 3 Pmt 4
2011 2012
Pmt 1 Pmt 2
Balance outstanding at 28 February 2015 = 90 000
5 payments, 4 already made
.’. 1 payment remaining = 90 000
.’. OB = 90 000 + 90 000 = 180 000
CB = 90 000
.’. Finance cost: 180 000 x 12% x 6/12 = 10 800
90 000 x 12% x 6/12 = 5 400
16 200
W3. (100 000 shares x R3) – (100 000 shares x R2,50) = 50 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
, 3
W4. (5 000 shares x R12) – R40 000 = 20 000
W5. Motor vehicles
Total Sold Rest
480 000
(120 000)
360 000 160 000 200 000
Depreciation to DoS
(160 000 x 20% x 6/12) (16 000)
Depreciation
(200 000 x 20%) (40 000)
CA at date of sale 144 000 160 000
W6. Equipment
1 Mar 28 Feb 28 Feb 28 Feb
2012 2013 2014 2015
CA at EOY = 96 000
3 years depreciation completed OR 96 000 x 100/40 = 240 000
.’. 96 000/2 remaining years = 48 000 .’. 240 000 x 20% = 48 000
W7. Total depreciation
= 56 000 (W5) + 48 000 (W6)
= 104 000
FAC2601 May-Jun 2015 suggested solution.doc
© Edge Business School
